The former chief executive of the Co-operative Group has been named interim chair of Skills England, the new body that will inform the Department for Education’s policy priorities and provide oversight of the post-16 skills system.
Richard Pennycook, who is currently lead non-executive board member of the Department for Education, will lead Skills England until a permanent board, chair and chief exec are in place, DfE announced today.
Skills England will coordinate central and local government, businesses, training providers and unions to provide “strategic oversight” of the post-16 skills system aligned to the government’s industrial strategy.
It will be responsible for maintaining a list of training that is eligible for the government’s new growth and skills levy – which will replace the existing apprenticeships levy – and ensuring that the mix of government-funded training available to learners and employers matches up to the skills businesses need.
The announcement comes after the King’s Speech set out legislation to transfer some powers from the Institute for Apprenticeships and Technical Education, a DfE-sponsored government agency which helps employers to shape skills training in England, to the new body.
The Skills England bill will fulfil a manifesto commitment to set up the organisation “to bring together business, training providers and unions with national and local government to ensure we have the highly trained workforce needed to deliver Labour’s Industrial Strategy”.
The bill will “simplify and improve the skills system, ensuring the supply of skills needed for the economy and breaking down barriers to opportunity”, according to the briefing document published alongside the King’s Speech.
Skills England will work to develop an overall picture of national and local skills needs, and whether these needs are being met – helping DfE to create a “more coherent system”.
It will be set up in phases over the next nine to 12 months. While in shadow form, it will focus on starting this assessment of future skills needs and building strong relationships with employers, DfE said.
It will later support local areas to develop skilled workforces in key areas such as construction and healthcare, working with the Migration Advisory Committee to reduce businesses’ reliance on overseas workers.
It will also assess training courses for the rebranded growth and skills levy, which employers can use to upskill their staff.
IfATE will continue its work until the relevant functions have been transferred to Skills England, DfE said.
Its work will happen alongside efforts to to simplify and devolve adult education budgets to mayoral combined authorities, as part of the government's ongoing push for more devolution.
In today’s announcement, DfE said skills shortages doubled between 2017 and 2022 to more than half a million, accounting for 36% of job vacancies today.
Skills are critical to achieving economic growth, “with a third of productivity improvement over the last two decades explained by improvements to skills levels”, it added.
Pennycook – who made headlines in 2016 by asking for his base salary to be slashed from £1.25m to £750,000, saying his job had become easier after a period of instability for the Co-op Group – was appointed a CBE in the 2020 Birthday Honours for services to retail.
He has been a DfE non-executive since 2017.
In a statement, prime minister Keir Starmer said: "Our skills system is in a mess, which is why we are transforming our approach to meet skills needs over the coming decades."
"From construction to IT, healthcare to engineering, our success as a country depends on delivering highly skilled workforces for the long-term. Skills England will put in place the framework needed to achieve that goal while reducing our reliance on workers from overseas." he added.
Education Secretary Bridget Phillipson said the new Labour government had inherited a "fragmented and broken" skills system and that employers had "for too long have been held back from accessing the training they need".
"Skills England will jumpstart young people’s careers and galvanise local economies. It will bring businesses together with trade unions, mayors, universities, colleges and training providers to give us a complete picture of skills gaps nationwide, boost growth in all corners of the country and give people the opportunity to get on in life," she said.