Economic growth is the UK government’s top priority, recognised as fundamental to improving living standards, boosting prosperity and securing long-term national success. A thriving economy leads to better job opportunities, higher wages and increased investment in public services. However, sustainable economic growth relies on a workforce equipped with the right skills to meet the evolving needs of industries. To drive this mission forward, investment in skills and apprenticeships must be at the forefront of government and business strategies.

The upcoming Spending Review is the most important fiscal event of the parliament and is an opportunity for the Chancellor of the Exchequer, Rachel Reeves, to affirm the centrality of skills and apprenticeships in her plan for growth.

Investment in skills: the backbone of economic progress

For the UK to maintain a competitive and innovative economy, a highly skilled workforce is essential. Rapid advancements in technology, digital transformation and the transition to a greener economy require employees to be adaptable and continuously upskill to meet new industry demands.

Investing in skills development ensures that individuals can reskill into high-growth sectors such as digital, engineering and green industries. With labour market shifts accelerating, businesses need access to a talent pipeline equipped with the technical and soft skills required for success. Upskilling and reskilling initiatives not only enhance productivity but also improve job security, social mobility and workforce participation. Without a strategic focus on skills development, the UK risks falling behind international competitors and struggling to meet the demands of a rapidly evolving job market.

The role of apprenticeships in long-term employment

At a time when economic recovery and workforce development are paramount, apprenticeships play a crucial role in reducing skills shortages and enhancing workforce resilience. They provide businesses with a cost-effective way to nurture talent, increasing productivity and retention while also addressing key sector-specific shortages.

However, in our 2024 report ‘Overcoming barriers to opportunity: stimulating growth and unlocking supply in UK apprenticeships’, we found that currently there are not enough apprenticeships available to meet the demand of young people and those looking to reskill in their careers. This is due to barriers that prevent employers, especially small and medium sized enterprises (SMEs) from engaging with apprenticeships, such as complex systems, administrative burdens and financial constraints.

As set out in our report, we recommend that the Government makes is easier for employers by simplifying the system, aligning levy funds more closely with the apprenticeship budget, and introducing greater flexibility in funding rules. One important recommendation is to implement targeted incentives to encourage more SMEs to engage in apprenticeship programmes. SMEs make up a significant part of the economy and can provide valuable training that can help more people into well-paid, meaningful employment.

Securing economic growth

For the UK to achieve its growth ambitions, investment in both skills and apprenticeships must remain a priority. A well-trained workforce ensures that businesses can innovate, compete, and expand, while apprenticeships provide accessible pathways to sustainable careers. By addressing some of the barriers employers face, we can create prosperous job opportunities and secure a strong, resilient economy for the future.