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2017 Budget: Plans to Improve Britain’s Productivity by Up-Skilling Workers and Developing Technology

Published 23rd November 2017 by Charlotte Smith

Yesterday the Chancellor outlined his second Budget to parliamentary colleagues in the House of Commons. Following a pledge to create “an economy that works for everyone”, Phillip Hammond announced a spate of policies intending to boost productivity across the UK workforce. From re-affirming the government’s commitment to three million apprenticeship starts by 2020, to announcing £100 million for an additional 8,000 computer science teachers, it was very much a budget with industrial strategy at its core.

Training & Development

Interestingly, the Chancellor announced a re-training partnership between government, the Trade Union Congress (TUC) and the Confederation of British Industry (CBI). This proactive step is intended to predict and mitigate the potential impacts that artificial intelligence (AI) could have on several sectors across the UK labour market.

Hammond also announced funding for research and development in the AI field, particularly in the realm of driverless vehicles. With the intention of having driverless cars on the road by 2021, the implications that this policy could have for job sectors such as logistics, haulage and transportation should not be underestimated. The alliance between the TUC, CBI and government will be vital in ensuring that employees within these sectors as well as others, are not left behind as technology advances. AI technologies also promise to deliver up to 36% profit gains from producitivity increases, however this depends on how easy it is to use AI in the workplace, if workers are supported with upskilling plans, and if the technology is deigned with the goal of improving the society. To apply AI effectively, training that goes beyond hard skills is required.

However, it is vital that the government makes this a rigorous scheme, ensuring it develops meaningful qualifications and a framework through which people can both re-skill and up-skill and go on to find quality work in new sectors. This ties in to the importance that Investors in People have placed on ensuring that, beyond the government’s ambitious target of three million apprenticeship starts by 2020, there are quality measures and assurances in place to guarantee a positive experience for those apprentices.

Skills & Productivity

The Chancellor has already stated that there will be an emphasis on bridging the skills gap in the digital and construction sectors, a decision predicated on the belief that these will be vital in meeting broader government policy objectives over the coming years. In particular, £30 million will be spent developing long-distance learning courses to ensure that those who require development of their digital skills will be able to access quality learning, no matter the geography.

Beyond up-skilling the workforce to improve the economy, the Budget also paid attention to how intermittent broadband and mobile signal are limiting efficiency, particularly for those who are self- employed or run businesses from home. The £160 million pledged to develop and install next generation 5G mobile networks should yield productivity gains in the longer term as it will mean that businesses can work efficiently, regardless of location.

Although the Chancellor’s Budget made steps towards mitigating the potential impacts that AI will have on our labour market and indeed in redressing the skills gaps across our economy, it is important that the government does not rest on its laurels. Indeed, the CIPD has suggested that the Budget doesn't do enough to address the need for skills development. Going forward, their recommendation that 5% of the National Productivity Investment Fund be channelled into skills development with emphasis on life- long learning is certainly convincing.