Skills Update: What Government Plans Mean for Employers

Chris Fletcher, Executive Director of Skills Policy at Greater Manchester Chamber, provides an update on recent skills announcements.

In a policy environment defined by continual change, anyone working in the skills system is likely feeling significant pressure. Government announcements arrive almost daily, each linked to the ongoing effort to address long-standing structural challenges. Employers, meanwhile, face a contradictory picture: sustained financial pressure on workforce expansion, discussions about new qualifications such as V Levels, and promises of guaranteed job placements for young people. The result is growing uncertainty about what comes next.

The recent headline commitment from government to fund over 300,000 training opportunities and 55,000 subsidised job placements is intended to respond to the sharp rise in the number of young people not in employment, education or training (NEET). Combined with the Budget decision to scrap the 5% SME apprenticeship contribution, it signals that government is beginning to recognise the scale of the problem from both an employer and provider perspective.

The transfer of Skills England to the Department for Work and Pensions fits this narrative. Moving more young people off benefits and into employment generates clear social and fiscal gains: better long-term prospects for those furthest from the labour market and reduced welfare spending.

However, recent conversations with providers and employers through our GM Local Skills Improvement Plan (LSIP) highlight growing apprehension about implementation. This has been described by some as a “crackdown on NEETs.” The language is unhelpful. Terms such as “NEET” or “economically inactive” already carry negative connotations, and “crackdown” traditionally applies to criminality or misconduct - not to the circumstances that many young people enter through limited opportunity, not choice.

The plan for 300,000 training places spans work placements, apprenticeships and other forms of provision, but operational details remain unclear. The longer-term proposal within the Post-16 Skills White Paper - to auto-enrol school-leavers into FE - raises practical questions. Many colleges are already struggling to meet current demand, let alone absorb an additional cohort of young people who may not have chosen technical education.

The jobs guarantee proposes government-funded 25-hour roles for 18–21-year-olds in six pilot areas, including Greater Manchester, with a target of filling 55,000 posts from April 2026. While details are still being developed, the approach resembles the post-Covid Kickstart scheme.

The ambition is difficult to dispute, but delivery capacity is a critical gap. Scaling this effectively will require additional teaching staff, expanded space, and more employers willing to participate - at a time when many businesses are already dealing with the consequences of wider tax and regulatory pressures and many educational establishments are facing similar cost issues and capacity problems.

Time isn’t exactly on anyone’s side. These plans are bold, and if implemented well, could shift a system that has sat in the “too difficult” box for far too long. That deserves recognition. But sustained focus will be essential. Where jobs and training are created, they must be meaningful, durable, and aligned to the areas where employers are already facing shortages - and, crucially, where demand will continue to grow. That is what we need to aim for here in GM.

Only then does the whole system start to work for everyone in the long term and this doesn’t just default into another numbers game with short-term minimal impact and we end up back where we started!