NIAO Developing skills for Northern Ireland’s future

List of Abbreviations

ACVED Apprenticeships, Careers and Vocational Education Division

CCEA Council for the Curriculum, Examinations & Assessment

CDP College Development Plan

DE Department of Education

DfC Department for Communities

DfE Department for the Economy

ETI Education and Training Inspectorate

FE Further Education

FHEQ The Framework for Higher Education Qualifications of Degree-Awarding Bodies in England, Wales and Northern Ireland

HE Higher Education

HEI Higher Education Institutions

KPI Key Performance Indicator

LMP Labour Market Partnership

NDPB Non-Departmental Public Body

OECD Organisation for Economic Co-operation and Development

RQF Regulated Qualifications Framework

STEM Science, Technology, Engineering, and Mathematics

UUEPC Ulster University Economic Policy Centre

Key Facts

£2.3 billion - Total spending on skills support by the Department for the Economy between 1 April 2019 and 31 March 2024

7% - Reduction in real terms spending on skills since April 2019

35% - Percentage of job vacancies due to skills shortages in 2022

The participation rate in adult learning has decreased from 18.2% in 2020 to 16.3% in 2022 (2030 target: 25%)

There has been limited progress against a strategic target to increase the proportion of the working population with Level 2 and above qualifications:

• 2020 Baseline: 76.3%
• 2022 Level: 76.4%
• 2030 Target: 85-90%

There has been limited progress against a strategic target to increase the proportion of the working population with Level 3 and above qualifications:

• 2020 Baseline: 56%
• 2022 Level: 57.2%
• 2030 Target: 70-75%

There has been no progress against a strategic target to increase the proportion of higher education graduates with degrees in narrow STEM subjects:

• 2020 Baseline: 24%
• 2022 Level: 24%
• 2030 Target: 27%

(Narrow STEM subject degrees include physical and biological sciences, mathematical and computer science, engineering and technology)

Executive Summary

1. Workforce skills are essential for a healthy and growing economy. Countries in which people develop strong skills, learn throughout their lives, and use their skills fully and effectively at work and in society, are more productive and innovative, and enjoy higher levels of trust, better health outcomes and a higher quality of life. In 2020 the Organisation for Economic Co-operation and Development (OECD) commented that developing relevant skills and using them effectively is crucial for Northern Ireland’s ability to thrive in an increasingly interconnected and rapidly changing world.

Skills needs in Northern Ireland

2. The Skills Barometer, published biennially by the Ulster University Economic Policy Centre, forecasts labour market demand for skills and skills supply, and combines them to identify projected skills imbalances in areas of undersupply and oversupply by qualification level. As well as modelling qualification level supply and demand, the Skills Barometer also considers the field of study and industry sector needs.

3. The latest iteration of the Skills Barometer, based on data up to 2021, was published in March 2022. Based on a high growth scenario, the 2021 iteration identified that during the 2020-2030 period there is a forecast average annual undersupply of new workers with qualifications at Level 3, Levels 4-5, and Level 6 and above; and an average annual oversupply of new workers with qualifications at Levels 2 and below (see Figure 2 for details on qualification levels). The 2021 Skills Barometer also forecast undersupply in 2020-2030 across most subject areas at degree level (Level 6 and above) with undersupply most prominent in the Science, Technology, Engineering and Mathematics (STEM) subjects, and undersupply across all subject areas at Levels 4 and 5.

4. The 2022 Employer Skills Survey found that of an estimated 39,500 job vacancies, 35 per cent were attributable to a lack of skills, experience or qualifications amongst applicants. Nearly all employers (96 per cent) reported that these skills-shortage vacancies were having a detrimental impact on their business performance, and a significant proportion of employers (over 40 per cent) considered that the impacts of skills-shortage vacancies were causing delays in developing new products or services, a loss of business to competitors, or withdrawals from offering certain products or services altogether. A simple analysis using the latest Office for National Statistics Gross Value Added (the increase in the value of the economy due to the production of goods and services) per filled job in Northern Ireland of approximately £52,000 (as of 2021) suggests that filling these skills-shortage vacancies could increase Northern Ireland’s Gross Value Added by over £700 million each year. In 2022, the highest percentage of skills-shortage vacancies was reported amongst the manufacturing sector.

In Northern Ireland the Department for the Economy leads on government skills policy

5. The skills system involves multiple bodies, including central government departments, local councils, further and higher education institutions, employers, various local and sectoral partnerships and bodies, and individuals. In Northern Ireland, the Department for the Economy (DfE) leads on skills policy, and it has a strategic objective to “enhance education, skills and employability”. Support for skills and learning is the largest area of spend for DfE, with approximately £470 million spent in 2023-24. That includes £372 million on funding to further and higher education institutions in Northern Ireland and £84 million on a range of programmes provided by DfE to support skills development. Whilst effective development of skills is dependent on a collaborative and coherent approach across government and industry, given DfE’s responsibility for leading on skills policy this report has focused on its activities in this area.

Transformation of the skills system is necessary to support the vision for economic growth in Northern Ireland

6. In March 2021, DfE developed a new economic strategy for Northern Ireland, A 10x Economy – Northern Ireland’s Decade of Innovation (the 10x Strategy), which set out a vision for economic growth through innovation which benefitted all of society. The delivery of the 10x Strategy requires transformation in our skills system. In March 2022 the Skills Strategy for Northern Ireland: Skills for a 10x Economy (the Skills Strategy) was launched in support of the delivery of the 10x Strategy’s economic vision. The 2019 iteration of the Skills Barometer was a primary evidence base used in the development of the Skills Strategy. The Skills Strategy identified three new strategic goals, which can be summarised as:

• increasing the proportion of Northern Ireland higher education graduates with degrees in narrow STEM subjects to 27 per cent by 2030 (from a baseline of 24 per cent). Narrow STEM subject degrees include physical and biological sciences, mathematical and computer science, engineering and technology;
• increasing the proportion of the working age population with Level 2 and above qualifications to 85-90 per cent by 2030 (from a baseline of 76.3 per cent); and
• increasing the proportion of the working age population with Level 3 and above qualifications to 70-75 per cent by 2030 (from a baseline of 56 per cent).

7. The Skills Strategy aims to drive economic growth, and to establish a skills framework that addresses the key issues which have constrained Northern Ireland’s economic and social development:

• the prevalence of individuals with low, or no qualifications;
• limited opportunities for high paying jobs and pathways for career progression; and
• a ‘skills deficit’ and comparatively poor productivity performance.

8. The Skills Strategy contained 49 recommendations (subsequently increased to 50) for action and activity to support achieving the strategic goals. Key areas of work over the lifetime of the Skills Strategy are to include: the development of a Lifelong Learning Action Plan; a renewed approach to management and leadership; a review of vocational education provision; and the development of a new Careers and Skills Portal. Whilst not a strategic goal, the Skills Strategy targeted an increase in the participation rate in adult learning to 25 per cent by 2030 (from a baseline of 18.2 per cent). The Skills Strategy also committed to developing two, five and ten year implementation plans for the 50 recommendations (the ten year implementation plan was later shortened to eight years due to delays in the publication of the Skills Strategy and the need to maintain 2030 as the target for delivery of the strategic goals).

It is difficult to see how DfE ensures that the funded skills provision aligns with the skills needed in Northern Ireland and the Skills Strategy

9. In addition to funding provided to further and higher education institutions, DfE offers a range of programmes to support skills development, including core initiatives such as support for apprenticeships, along with smaller, targeted initiatives. The 2022 Skills Strategy was informed by identified skills needs and stakeholder engagement and DfE continues to have access to a range of data including the Skills Barometer, the Employer Skills Survey, and intelligence gathered through sectoral partnerships, labour market partnerships and the Skills Council. Whilst DfE advised that it seeks to use this data to ensure that its programmes are aligned to current and future needs, it was not clear to us how those identified needs are integrated across the suite of skills programmes, including provision by further and higher education institutions, on an ongoing basis and how DfE ensures that its provision remains relevant. DfE told us that further work is underway to strengthen engagement with employers to align skills provision with their needs, however it can take time to create new courses, and where necessary, provide facilities, equipment and staff.

10. Whilst many of the programmes funded by DfE have been positively evaluated, the linkage between each of those programmes, the skills needed in Northern Ireland, and the achievement of the goals in the Skills Strategy is not clear. More needs to be done to ensure that individually, and collectively, the skills programmes equip people with the right skills and contribute towards the achievement of the Skills Strategy goals. Money should be invested in those initiatives that make the greatest impact and enable the achievement of the economic vision.

Ongoing limitations affecting performance monitoring for two of the largest skills programmes cannot be allowed to persist

11. Due to ongoing issues following the introduction of a new computer system (Trainee & Apprenticeship Management System) in August 2022, DfE has been unable to produce fully validated performance reports against the KPIs for both ApprenticeshipsNI and Skills for Life and Work. Whilst DfE advised that Contract and Programme Management activity has continued to provide assurances and help identify any issues, it is extremely concerning that full KPI monitoring has not been completed for almost two years. In 2023-24, approximately £61 million was spent on these programmes (2022-23: £57 million) and in the absence of full KPI reporting and informed risk assessments, it is difficult to see how DfE can be confident that the contracts are being effectively managed and value for money is being achieved.

Limited progress has been made towards achieving the strategic goals in the Skills Strategy and urgent action is needed to enable Northern Ireland to achieve its economic vision

12. Annual monitoring reports set out progress against the Skills Strategy goals, based on the latest available data. The latest results are summarised below. This shows that the proportion of the working age population with qualifications at Level 2 (equivalent to five or more GCSE grades A*-C) or above has declined since 2021; the participation rate in adult learning has also declined and there has been no change in the proportion of Northern Ireland higher education graduates with degrees in narrow STEM subjects.

Figure 1: Performance against the Skills Strategy goals        

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Source: NIAO summary of details included within the Skills Strategy annual monitoring reports

Note: see Figure 2 in the main report for details of the qualification levels referred to in the table.

13. Whilst the second annual monitoring report suggests that the 2022 outcomes at Level 2 and Level 3 may be outliers as they are not consistent with the long term growth trends since 2016-17, it recognises that significant improvements are needed to achieve the long term goals included in the Skills Strategy. DfE advised that the majority of skills interventions typically take between two and four years for an individual to complete, therefore the five-year review point in the Skills Strategy will be a key stage in assessing the impact of the Strategy on outcomes.

14. The second annual monitoring report also covers the initial two-year period noted for the 50 implementing actions contained in the Skills Strategy. Whilst the Skills Strategy did not include target dates for all actions, the first annual monitoring report in March 2023 anticipated delivery of 26 actions by the end of March 2024 (with 5 actions considered delivered already by March 2023). The second annual monitoring report presents an update on these 26 actions. Whilst we note that progress has been made in some areas, including the introduction of all age apprenticeships in September 2023, our analysis of the comments included in the report indicate that 15 of the 26 actions have not yet been achieved. The Skills Strategy was intended to be flexible and refreshed as necessary to ensure it delivered an evolving programme of work in response to economic and labour market needs. However, it is not clear if this is happening in practice.

15. DfE told us that its capacity to make substantive progress on some recommendations, including those with cross departmental responsibility, has been limited due to the absence of Ministerial leadership and a functioning Executive and Assembly for the majority of the Skills Strategy’s lifetime. We also note that some actions were paused due to budget uncertainty.

A whole of government approach to support the delivery of the Skills Strategy has not been achieved and issues persist in developing a coherent approach

16. Whilst DfE leads on skills policy and is accountable for much of the spend on government-funded skills initiatives, the successful delivery of the Skills Strategy is dependent on collaboration across government and beyond. In its 2020 report, the OECD noted that co-ordination on skills policy could be improved within and between government departments with a better whole-of-government approach, and between central and local government. It also reported that stakeholders considered there to be too many employer engagement bodies on skills, leading to overlap, confusion and frustration. Similar concerns that the skills system is fractured and fragmented were also identified from stakeholders during the development of the current Skills Strategy in Northern Ireland.

17. The current Skills Strategy was intended as a whole of government strategy. It recognised the need for significant improvement in how the skills system is governed and that addressing the skills challenges facing Northern Ireland requires all stakeholders to work together. However, the skills landscape and the approach to developing skills remains confused and fragmented. The Institute of Directors recently reported that its members continue to be “frustrated by the weak and disjointed skills and education system that hampers plans for business growth”. The majority of stakeholders that engaged with us during our review did not agree that there is clarity on the roles and responsibilities across government for developing skills in Northern Ireland, and most disagreed that there is a coherent approach to the policies, initiatives and interventions for developing skills to address identified skills need. We note that the Northern Ireland Skills Council will undertake a review and rationalisation of existing advisory bodies, however this is only targeted for completion by March 2027. In our opinion this important work should be progressed with greater urgency.

18. Limited progress has been made in the implementation of a more strategic approach to 14-19 education and training. This was intended to be central to the delivery of the vision set out in “A 10x Economy” and in delivering the objectives set out in the Skills Strategy, however significant issues, including ineffective governance and unclear objectives, have been identified.

Conclusion

19. Significant improvements are needed to achieve the goals of the Skills Strategy in Northern Ireland. It is difficult to see how DfE ensures that all the skills programmes it funds, including provision by further and higher education institutions, align with the skills needs in Northern Ireland or how it measures the success and impact of its skills delivery arrangements as a whole. Substantial change is needed to deliver the volume of skills needed now and in future years to support the achievement of the overarching economic vision for Northern Ireland.

Recommendation 1

Following the introduction of a new computer system (Trainee & Apprenticeship Management System) in August 2022, DfE has been unable to produce fully validated performance reports against the KPIs for both ApprenticeshipsNI and Skills for Life and Work. Immediate action must be taken to enable full and accurate performance reporting for these significant contracts.

Recommendation 2

DfE must ensure that resources are being used to best effect. We recommend that DfE reviews each of its skills programmes, including the objectives, design and outcomes, and considers how both individually and collectively the programmes contribute towards achieving the overarching strategic goals. DfE should focus spend on skills programmes that have the greatest impact in achieving the objectives of the Strategy.

Recommendation 3

DfE must use the available data to drive change by ensuring that current programmes and new initiatives are suitably focused on current and emerging areas of need as evidenced by stakeholders.

Recommendation 4

We recommend that DfE reviews the implementation actions which underpin the Skills Strategy to ensure they remain relevant in supporting the ambitions of the Skills Strategy and the economic vision, and that there is clarity on how they will be successfully implemented. DfE should ensure that demonstrable success has been achieved in delivering the Skills Strategy at the five-year review point.

Recommendation 5

DfE must review, streamline and clarify the governance and oversight arrangements for skills in Northern Ireland and ensure that the skills system can be more easily navigated by stakeholders. It should clearly set out the roles and responsibilities of the different bodies in the skills system and eradicate unnecessary overlap. This review should clarify how these bodies will successfully interact with each other to establish a coherent and effective approach to address existing skills shortages and future skills needs in Northern Ireland.

Part One: What is the vision for skills in Northern Ireland and who are the key stakeholders?

1.1 A new economic strategy for Northern Ireland was published in 2021, A 10x Economy – Northern Ireland’s Decade of Innovation (the 10x Strategy), which set out a vision for economic growth through innovation which benefitted all of society. The 10x Strategy also noted the need to tackle structural weaknesses in the Northern Ireland economy, primarily low levels of productivity (compared to the rest of the UK and Ireland), high levels of economic inactivity, too few high paying jobs and relatively low levels of investment in research and development.

1.2 The 10x Strategy sets out key priority clusters considered to be important strategic drivers of economic competitiveness:

• Digital, ICT and Creative Industries;
• Agri-Tech;
• Fintech/Financial Services;
• Advanced Manufacturing and Engineering; and
• Life and Health Sciences.

The current Skills Strategy was launched in 2022 in support of the economic vision for Northern Ireland

1.3 The vision for “a 10x Economy” identifies ‘talent’ as one of five key pillars of delivering success: “Inspiring and preparing a future generation of workers that can respond flexibly to future skills requirements. Ensuring everyone across NI has opportunities to thrive.” The Department for the Economy (DfE) leads on skills policy in Northern Ireland, and it has a strategic objective to “enhance education, skills and employability”. In support of the delivery of the 10x Strategy’s economic vision DfE launched the Skills Strategy for Northern Ireland: Skills for a 10x Economy (the Skills Strategy) in March 2022. The Skills Strategy identified three new strategic goals:

• increasing the proportion of Northern Ireland higher education graduates with degrees in narrow STEM subjects to 27 per cent by 2030 (measured against a 2019-20 baseline of 24 per cent). Narrow STEM subject degrees include physical and biological sciences, mathematical and computer science, engineering and technology;
• increasing the proportion of the working age population with Level 2 and above qualifications to 85-90 per cent by 2030 (measured against a 2019-20 baseline of 77.3 per cent, which was later reweighted to a 76.3 per cent baseline using updated data); and
• increasing the proportion of the working age population with Level 3 and above qualifications to 70-75 per cent by 2030 (measured against a 2019-20 baseline of 57.2 per cent, which was also later reweighted to a 56 per cent baseline).

1.4 The skills levels referred to in the Skills Strategy are a hierarchy of qualification levels in ascending order comprising a band of qualifications with similar levels of attainment. Examples of typical qualification levels are set out in Figure 2.

Figure 2: Examples of typical qualification levels in Northern Ireland

Source: NIAO based on data from the Regulated Qualifications Framework (RQF) and the Framework for Higher Education Qualifications of Degree-Awarding Bodies in England, Wales and Northern Ireland (FHEQ).

Note: The RQF comprises nine levels (Entry Level and Levels 1-8) and the FHEQ comprises five levels (Levels 4-8). Whilst the two frameworks are separate in Northern Ireland they are comparable at the corresponding higher levels. See Qualifications can cross boundaries for further details.

1.5 To achieve the strategic goals, the Skills Strategy focuses on three policy objectives (addressing skills imbalances, driving economic growth; creating a culture of lifelong learning; and enhancing digital skills, developing a digital spine). These policy objectives are supported by three policy enablers (enhancing policy cohesion; building strong relationships; and investment in the skills system).

1.6 The Skills Strategy was informed by a range of data sources which identified current and future skills needs, and also by the findings and recommendations from a number of reports including the evaluation of the previous strategy, Success through Skills – Transforming Futures, the OECD Skills Strategy Northern Ireland report and The Strategic Integration Of Skills & Innovation Policy In Northern Ireland: An International Small Economy Perspective (see Appendix One for summaries of these reports).

1.7 Key areas of work over the lifetime of the Skills Strategy are to include the development of a Lifelong Learning Action Plan, a renewed approach to management and leadership, a review of vocational education provision, and the development of a new Careers and Skills Portal. The Skills Strategy contained 49 recommendations for action and activity to support achieving the strategic goals (subsequently increased to 50 recommendations). The Skills Strategy also committed to developing two, five and ten year implementation plans for the recommendations (the ten year implementation plan was later shortened to eight years due to delays in the publication of the Skills Strategy and the need to maintain 2030 as the target for delivery of the strategic goals). It was intended that the Implementation Plan would be refreshed on an annual basis to deliver an evolving programme of work in response to economic and labour market needs. Part Three of this report considers the progress made two years after the launch of the Skills Strategy.

Who are the main stakeholders in the skills landscape in Northern Ireland?

1.8 In Northern Ireland the skills landscape involves a wide range of bodies, including central government departments, local councils, further and higher education institutions, employers, various local and sectoral partnerships and bodies, and individuals. The system can be complex and to be effective requires all stakeholders to work together. Figure 3 summarises the main bodies involved in skills planning, delivery and development in Northern Ireland.

1.9 DfE is responsible for employment and skills programmes for workers and employers as well as post-compulsory education policy including further education (FE) and higher education (HE). DfE is also responsible for careers guidance and delivery of the Careers Service, which includes delivery of careers advice in schools through partnership agreements with all post-primary schools and in Jobs and Benefits offices. As of March 2024, there were 379 staff in DfE’s Skills and Education Group (with a further 46 vacant posts). This number is staff in the core DfE and does not include staff in other bodies e.g. FE colleges.

Figure 3: Main bodies involved in skills planning, delivery and development in Northern Ireland

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Source: NIAO analysis.

Note: Other bodies and organisations support the development of skills in Northern Ireland, such as schools and sixth form colleges, and the UK Government which funds some initiatives delivered by bodies in Northern Ireland.

1.10 Support for skills and learning is the largest area of spend for DfE, with approximately £470 million spent in 2023-24 (see Figure 4). In real terms, funding has decreased by 7 per cent since 2019-20. Spend in 2023-24 included £372 million on funding to HE and FE institutions in Northern Ireland and £84 million on a range of programmes, and careers advice, provided by DfE to support skills development.

Figure 4: Spend by DfE on support for skills and learning, 2019-20 to 2023-24

Source: NIAO analysis of information provided by DfE adjusted by HM Treasury GDP deflator indices (actual indices to 2022-23 and forecast for 2023-24).

1.11 FE Colleges are non-departmental public bodies of DfE. DfE’s responsibilities in FE are for policy, strategic development, financing of the statutory FE sector and quality assurance over the sector. The provision offered by FE colleges is vocationally and technically focussed, with courses available from entry level to Level 6. FE Colleges also have a dual mandate role to not only support the economy through developing professional and technical skills and boosting business innovation, but also in supporting social inclusion by providing opportunities to those with low or no qualifications through offerings such as Essential Skills training. Courses are provided on both a full-time and a part-time basis, with some of the part-time vocational programmes, such as apprenticeships, using a model of combined academic and work-based learning. No tuition fees are charged for full-time FE by the colleges, with the provision intended to be funded by the core grant each college receives from DfE. FE colleges are also involved in offering courses in adult education and courses tailored to the needs of specific businesses and organisations.

1.12 FE colleges also play a role in the delivery of the Department of Education’s (DE) post-14 curriculum by delivering some courses with a professional and technical focus to pupils who are enrolled in schools.

1.13 Northern Ireland’s higher education institutions (HEIs) are the primary deliverers of higher education at degree level (Level 6) and above in Northern Ireland. With the exception of Stranmillis University College which is a non-departmental public body of DfE, the HEIs are independent autonomous bodies. Therefore, DfE’s role in HE is different compared to its role in FE. DfE is responsible for developing policy and administering grant funding to support HE and research-related activities undertaken by the HEIs, and for quality assurance over the HE sector.

Scope of this Report

1.14 Whilst effective development of skills is dependent on an inclusive and coherent approach, including engagement and support across government and industry, given DfE’s responsibility for leading on skills policy, this report has focused on its activities in this area. The report also considers the joint working between DfE and DE, which is responsible for compulsory education, specifically on the development of a policy and framework for the 14-19 age group, when young people face significant milestones and make important decisions about what, how, and where to study, or whether they will leave education and training. Further details on our scope and methodology are included in Appendix Two. This report is structured as follows:

• Part Two sets out the skills needed in Northern Ireland.
• Part Three considers how DfE seeks to ensure that its provision aligns with skills needs; how it evaluates its skills programmes; and progress to date implementing the Skills Strategy actions and achieving the strategic goals.
• Part Four highlights weaknesses in the governance arrangements and plans to support a coherent approach to developing skills in Northern Ireland.

Part Two: The skills needed in Northern Ireland

2.1 An essential input to the development of skills policy is a robust understanding of skills requirements and supply, not only currently but also forecast in the future. This is important due to the multi-year nature of many academic and vocational qualifications, and the need to ensure provision of education and training is suitably aligned in both supply and curriculum. DfE has access to a range of data to identify and understand skills needs.

Since 2015 the Ulster University Economic Policy Centre (UUEPC) has prepared the Skills Barometer, under the direction of DfE

2.2 The Skills Barometer, published biennially, forecasts labour market demand for skills and skills supply, and combines them to identify projected skills imbalances in areas of undersupply and oversupply by qualification level. As well as modelling qualification-level supply and demand, the Skills Barometer also considers the field of study and industry sector needs. The 2019 iteration of the Skills Barometer was a primary evidence base used in the development of the Skills Strategy.

2.3 The latest iteration of the Skills Barometer, based on data up to 2021, was published in March 2022. Based on a high growth scenario, the 2021 iteration identified that during the 2020-2030 period there is a forecast average annual undersupply of new workers with qualifications at Level 3, Levels 4-5, and Level 6 and above; and average annual oversupply of new workers with qualifications at Levels 2 and below (see Figure 5). Compared to the 2019 iteration of the Skills Barometer, the forecast undersupply has increased at Levels 3 and above and Level 2 has changed from a balanced supply to an oversupply position.

Figure 5: Average annual labour market supply gap by qualification, 2020-2030

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Source: UUEPC 2021 Skills Barometer

2.4 The 2021 Skills Barometer also forecast undersupply in 2020-2030 across most subject areas at degree level (Level 6 and above) with undersupply most prominent in the STEM subjects (see Figure 6), and undersupply across all subject areas at Levels 4-5 (see Figure 7).

Figure 6: Annual average effective supply gap by Level 6 + subject, 2020-2030

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Source: UUEPC 2021 Skills Barometer

Note: where the scale of under or over-supply is marginal, the Skills Barometer suggests these areas should be considered as being broadly in balance.

Figure 7: Annual average effective supply gap by Levels 4-5 subject, 2020-2030

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Source: UUEPC 2021 Skills Barometer

Note: where the scale of under or over-supply is marginal, the Skills Barometer suggests these areas should be considered as being broadly in balance.

2.5 The 2021 Skills Barometer also forecast that almost two-fifths (37 per cent) of new workers will require degree level and above qualifications (Level 6 and above) up to 2030, see Figure 8. This has risen sharply from the 29 per cent forecast in the first iteration of the Skills Barometer covering 2015-2025.

Figure 8: Annual average labour demand by qualification level, 2020-2030

Source: UUEPC 2021 Skills Barometer

2.6 Both the 2019 and 2021 iterations of the Skills Barometer forecast significant annual undersupply of new workers with qualifications at Levels 4 and 5 across all subjects. However, the Skills Strategy does not have a strategic goal either in part or wholly targeted at Levels 4 and 5. DfE told us that the Skills Barometer model only examines the need for new workers (i.e. from education or migration). Most of the skills provision for new entrants to the labour market from Levels 4 and 5 comes from FE but the Skills Barometer model assumes that a large proportion studying in FE continue in education to Level 6 and beyond. Therefore, any target specifically aligned to Level 4 and 5 entrants to the labour market would need to be much higher than the Skills Barometer indicated, to account for those that continue to further study. DfE concluded that the Labour Force Survey data available was not sufficiently robust to set a reliable target.

2.7 DfE also advised that the primary need and policy intent is not for individuals who are leaving education for the first time to join the labour force at Levels 4 or 5 rather than stay on in education, but to encourage more individuals to increase their qualification level beyond Level 2, whether that is by continuing in education before joining the labour force or through engagement in adult learning. Therefore, a population level indicator at Level 3 and above was judged by DfE to be the most viable way of recognising the anticipated demand set out in the Skills Barometer.

2.8 DfE acknowledges that this is imperfect and the need for growth in mid-level skills outcomes is emphasised throughout the Strategy, including in the context of increasing adult/lifelong learning.

The Employer Skills Survey is a biennial UK-wide large-scale survey of employers which provides labour market information on employers’ skills challenges

2.9 The latest iteration of the Employer Skills Survey is based on 2022 data. The survey shows that of an estimated 39,500 vacancies, approximately 13,700 (35 per cent) of vacancies were considered by employers to be attributable to a lack of skills, experience or qualifications amongst applicants (defined in the survey as skills-shortage vacancies). A simple analysis using the latest Office for National Statistics Gross Value Added (the increase in the value of the economy due to the production of goods and services) per filled job in Northern Ireland of approximately £52,000 (as of 2021) suggests that filling these skills-shortage vacancies could increase Northern Ireland’s Gross Value Added by over £700 million each year. Figure 9 shows both the number of skills-shortage vacancies and the proportion of vacancies that are due to skills shortages. The number of skills-shortage vacancies was almost five times greater in 2022 than 2015 (increasing from 2,800 to 13,700 vacancies) and 35 per cent of all vacancies in 2022 were categorised as skills-shortage vacancies.

Figure 9: Skills-shortage vacancies in NI, 2011 to 2022        

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Source: Employer Skills Survey

Note: The survey was not completed in 2021 due to COVID-19.

2.10 A lack of technical and practical skills was the cause, at least in part, of most of those skills-shortage vacancies (84 per cent). Whilst a lack of specialist skills or knowledge was the most significant factor in the overall lack of technical and practical skills, employers also considered deficiencies in basic numerical skills and basic information technology skills as important factors. A lack of ‘softer’ personal and people skills, such as the ability to manage one’s own time and task prioritisation, or team-working abilities, were also identified by employers as a major cause, at least in part, of skills-shortage vacancies.

2.11 Nearly all employers (96 per cent) reported that these skills-shortage vacancies were having a detrimental impact on their business performance. Most employers considered the skills-shortage vacancies caused an increase in workload for other staff, difficulties in meeting customer service objectives, and an increase in operating costs. Furthermore, a significant proportion of employers (over 40 per cent) also considered that the impacts of skills-shortage vacancies were causing delays in developing new products or services, a loss of business to competitors, or even withdrawals from offering certain products or services altogether.

2.12 Skills-shortage vacancies have also significantly increased in all sectors of the economy, as categorised by the Employer Skills Survey since the previous iteration of the survey was conducted in 2019 (see Figure 10). The greatest percentage increases in skills-shortage vacancies were suffered by the Information & Communications sector (13 per cent), Manufacturing sector (11 per cent), and Financial Services and Public Administration sectors (9 per cent).

Figure 10: Employers with skills-shortage vacancies - 2019 vs 2022

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Source: Employer Skills Survey

2.13 The Employer Skills Survey also showed that employers are continuing to invest in training for their workforces, with total training costs increasing from £1.2 billion in 2019 (approximately £1,600 per employee) to £1.3 billion in 2022 (approximately £1,700 per employee).

Conclusion

2.14 DfE, and the Northern Ireland Executive, has access to regularly updated data to identify the current skills challenges facing employers in Northern Ireland and forecast skills needs. Skills shortages can have a detrimental impact on business and constrain the economic growth in Northern Ireland. Part Three of this report considers how this data is used to inform skills planning and delivery and progress in implementing the Skills Strategy.

Part Three: DfE’s skills provision and progress towards the goals in the Skills Strategy

3.1 As shown in Figure 4, the largest area of spend on skills by DfE is funding to HE and FE institutions in Northern Ireland. Over the past five years, funding to HE and FE has totalled £751 million and £1.1 billion respectively.

3.2 Each FE college prepares an annual College Development Plan (CDP) in line with DfE’s requirements. Each CDP is subject to approval by DfE and sets out planned activity and key performance indicators for the upcoming academic year, including projected numbers of learners to be enrolled in the relevant academic year, as well key areas of curriculum provision, business support and skill initiatives. Progress against the planned activity targets and key performance indicators is reported throughout the year to DfE by each FE college. DfE holds annual accountability and partnership performance meetings with each college to review their activity against that expected under the CDP. DfE told us that FE colleges have to respond to departmental-led strategies which identify priority economic areas and provide details as to how they are contributing to those areas.

3.3 With the exception of Stranmillis University College, a non-departmental public body of DfE, HEIs are independent autonomous bodies therefore DfE’s role and oversight is different compared to that in the FE colleges. DfE is aiming to better align higher education outcomes with Northern Ireland’s economic need whilst continuing to recognise the wider social and cultural role that these institutions play and the importance of student choice. One example of this is the attempt to establish Outcome Agreements with each of Northern Ireland’s three universities, with the intention that the Outcome Agreements will demonstrate how each institution can contribute to achieving the Minister for the Economy’s strategic priorities (whilst showing regard for the universities’ independent status and own mission and values). The aim is to have Outcome Agreements in place with each university for the start of the 2024-25 academic year. In our opinion, such initiatives should have been in place earlier in the implementation of the economic and skills strategies. DfE also told us that, subject to Ministerial approval, it will shortly launch a consultation on possible changes to the postgraduate award scheme it funds which pays the course fees and stipend (or bursary) to postgraduate students, and how this support can be better aligned with economic priorities.

3.4 DfE advised that adjustments to skills provision can require long lead in times and capital investment. For example, increasing the percentage of graduates in STEM subjects requires enough students studying these subjects at level 3 and at level 2 to provide a pipeline of potential students and for school, colleges and higher education institutions have the facilities and teaching staff to teach these subjects effectively. DfE highlighted that another important factor in seeking greater alignment between higher education outcomes and Northern Ireland’s economic need is recognition of the role of individual choice. Choice should be based on good information, advice and guidance, recognising that individuals will consider a range of factors including, but not limited to, their future career opportunities.

3.5 In addition to the funding provided to FE and HE institutions, DfE offers a range of programmes to support skills development, including core initiatives such as support for apprenticeships (£35 million in 2023-24) along with smaller targeted initiatives. Figure 11 is an extract from Figure 4 in Part One of this report and shows some of the main programmes funded by DfE in recent years.

3.6 DfE advised that it seeks to ensure that its programmes are aligned to current and future needs by engaging with stakeholders through sectoral and labour market partnerships, the Skills Council and by using the findings and evidence presented in the Skills Barometer and the Employer Skills Survey (see paragraphs 2.2-2.10). For example, Skill Up is in part aligned to respond to training and skills gaps particularly prevalent in sectors with reskilling requirements or high growth potential as noted in the Skills Barometer and Employer Skills Survey.

Figure 11: The main skills programmes funded by DfE in recent years

Source: NIAO analysis of information provided by DfE

Sectoral partnerships are intended to be an important channel for ensuring work-based learning routes, such as apprenticeships, meet the needs of employers

3.7 The business community has an important role in providing employment for apprentices, meaningful work placement opportunities and up-skilling of existing employees. DfE continues to engage with employers to align skills pathways with economic needs through channels such as sectoral partnerships. Sectoral partnerships have been established across 15 economic sectors, with a further three due to be rolled out. They bring together relevant stakeholders including, employers and/or employer body organisations, the Council for the Curriculum, Examinations & Assessment (CCEA), representatives from FE and HE as well as DfE officials, along with trade unions, industry experts or policy advisers as required. The main focus of Sectoral Partnerships is to ensure that the content and curriculums of initiatives with an element of work-based learning, such as traineeships, apprenticeships and higher-level apprenticeships, meet the current and future needs of employers and industry. Sectoral partnerships are supported by the appointment of development partners who possess the specialist skills and experience to develop and refine course content.

3.8 An evaluation of the sectoral partnerships in June 2023 was broadly positive, however we note that membership in some has been difficult, specifically in relation to employers. We also note the call for improved clarity on responsibilities once the need for new qualifications has been identified by the sectoral partnerships. It is important that DfE continues to evaluate the impact of these partnerships and uses the intelligence gained to develop and enhance the skills provision in Northern Ireland.

DfE supports the Labour Market Partnerships established in each local council area which have a focus on employability outcomes

3.9 Labour market partnerships (LMPs) have been established in each of Northern Ireland’s eleven local council areas as part of the Department for Communities’ (DfC) Employability NI programme. The LMPs were noted in March 2024 by the Institute for Employment Studies as a ‘valuable example’ of effective engagement with employers.

3.10 DfE and DfC contribute funding to each LMP (approximately £50k and £400k respectively annually to each LMP) however local councils lead on the initiative. The purpose of each LMP is to support people, particularly the unemployed and economically inactive, to find employment and training opportunities in their local area. LMPs are intended as multi-agency partnerships, bringing together DfC, DfE and the DfE Careers Service, InvestNI, the local council, the relevant FE college, health and social care trusts as well as local employers, entrepreneurship bodies and members of the community and voluntary sector.

3.11 To inform their work, LMPs are required to conduct strategic assessments of their respective local labour markets and engage with local communities and key stakeholders to determine priority issues and concerns. Whilst the actions of each LMP are co-designed to reflect local need, actions across the LMPs typically include promotional activities to improve awareness of employment and training opportunities through advertising or jobs fairs, delivery of employability academies for specific industries, entrepreneurship support programmes and essential skills courses.

The Northern Ireland Skills Council is intended to be a key method of engaging with stakeholders

3.12 A Skills Strategy Advisory Group, including representatives from business, trade unions and education institutions, was established to support the development of the current Skills Strategy. To ensure continued collaboration it was agreed that a Northern Ireland Skills Council (the Skills Council) should be established to support the implementation of the Skills Strategy, with the Chair and additional members to be appointed by open competition. While the appointment process was ongoing, members from the Skills Strategy Advisory Group acted as an interim Skills Council from December 2021 to support the upcoming implementation of the Skills Strategy.

3.13 The Chair and seven members were appointed to the Skills Council via public competition in June 2023 for a four-year term. The first meeting of the reconstituted Skills Council was in September 2023. DfE told us that the primary means for stakeholder engagement is through the Skills Council which aims to present the views, not only of its members, but also of wider industry and society. In addition to the Chair and publicly appointed members, ex-officio members of the Skills Council are drawn from officials in local government, HE, FE, trade unions, and the community/voluntary sector, as well as senior officials from DfE, DE and DfC. Secretariat support is provided by DfE.

3.14 Several sub-groups of the Skills Council have been established to date to focus on the following specific areas of interest or sectors, each chaired by a member of the Skills Council and comprising a wide range of relevant stakeholders to inform the sub-group’s work:

• Skills Equality, Diversity and Inclusion Sub-Group;
• Digital Skills Industry Reference Group;
• Green Energy Skills Industry Reference Group; and,
• Skills Supply Task and Finish Group.

3.15 The relevant sub-groups of the Skills Council are also crucial for supporting two of DfE’s existing priorities. The Skills Strategy included a policy objective of ‘enhancing digital skills, developing our digital spine’. The Digital Skills Industry Reference Group is developing a Digital Skills Action Plan, which sets out multiple actions that fall to DfE, DE and wider industry to support that policy objective. Similarly, linked to DfE’s Path to Net Zero Energy Strategy published in December 2021, the Green Energy Skills Industry Reference Group oversaw research by Energy & Utility Skills which was published in June 2023, setting out the anticipated skills needed to transition to a net zero emission economy. DfE told us the Green Energy Skills Industry Reference Group is now facilitating collaborative skills planning between DfE and industry.

Skills initiatives are regularly monitored by DfE in terms of performance; however we are concerned by ongoing limitations affecting performance monitoring of the largest programmes

3.16 The performance measures used vary across initiatives and include: review meetings with FE colleges or relevant training providers; success rates of programme participants and qualifications, including published statistical bulletins for traineeships, apprenticeships and higher-level apprenticeships; and inspections or evaluations by independent bodies including the Education and Training Inspectorate (ETI), CCEA and the Strategic Investment Board. We sought details on some programmes to understand how they are monitored. We noted that evaluations of many of the initiatives have been broadly positive and concluded that the programmes have met their objectives, whilst other programmes have had mixed success – for example, the evaluation of the second year of the Skill Up initiative noted that nearly 9,800 learners enrolled on courses, with approximately 6,500 learners eventually certified. However, we also noted that of the 2,713 learners enrolled at one HEI, a staggering 1,728 learners (approximately 64 per cent) withdrew from the course.

3.17 Below we have summarised the arrangements in place for the programmes with the largest spend (ApprenticeshipsNI and Skills for Life and Work) and have highlighted weaknesses in these arrangements.

Figure 12: Monitoring and evaluation arrangements for ApprenticeshipsNI and Skills for Life and Work        

ApprenticeshipsNI – statistical bulletins are published on DfE’s website detailing         key information on the programme, including the number of starters and leavers,         occupancy and qualifications achieved. The statistical bulletins are to be         published bi-annually however the most recent publication was February 2023,         which covered the period up to July 2022. Further bulletins have been delayed         due to ongoing issues following the introduction of a new computer system         (Trainee and Apprenticeship Management System) in August 2022. DfE told us that         a statistical bulletin, covering the period up to January 2024, will be published         shortly and the statistical bulletins will return to their usual schedule in 2025.

Each year, DfE commissions the Education and Training Inspectorate (ETI) to         carry out a range of inspection activities and evaluations. Key Performance         Indicators (KPI) set around Retention, Achievement and Compliance are measured         quarterly and combine to give overall risk ratings ranging from low to high, which         then inform the extent of monitoring and support going forward. DfE Contract         Managers carry out Contract Review meetings with each provider at least twice         a year but this may be increased if there are concerns over the provision. All         programme providers produce quarterly General Service Delivery Reports, by which key achievements, developments, issues and challenges are reported to DfE.

Skills for Life and Work – The KPIs for ApprenticeshipsNI are replicated for Skills for Life and Work, as are the Contract Management arrangements. Whilst the KPI targets differ, due to the nature of the programme, its cohort and the levels of qualification, many of the ApprenticeshipNI providers also deliver Skills for Life and Work, and the Contract Managers within DfE cover both programmes. General Service Delivery Reports are also produced for this programme.

Performance against KPIs for the provision of ApprenticeshipsNI and Skills for Life and Work cannot be fully validated due to ongoing system issues

DfE has been unable to produce fully validated performance reports against the KPIs for both ApprenticeshipsNI and Skills for Life and Work due to ongoing issues following the introduction of the Trainee & Apprenticeship Management System in August 2022. Whilst DfE advised that Contract and Programme Management activity has continued to provide assurances and help identify any issues, it is extremely concerning that full KPI monitoring has not been completed for almost two years. In 2023-24, approximately £61 million was spent on these programmes (2022-23: £57 million) and in the absence of full KPI reporting and informed risk assessments, it is difficult to see how DfE can be confident that the contracts are being effectively managed and value for money is being achieved.    

Recommendation 1

Following the introduction of a new computer system (Trainee & Apprenticeship Management System) in August 2022, DfE has been unable to produce fully validated performance reports against the KPIs for both ApprenticeshipsNI and Skills for Life and Work. Immediate action must be taken to enable full and accurate performance reporting for these significant contracts.

Progress towards achieving the strategic goals in the Skills Strategy has been disappointing and more needs to be done to ensure a clearer linkage between the skills needed, the ongoing activities designed to develop skills, and the overarching strategic goals

3.18 Despite the range of skills support provided by DfE, limited progress has been made towards the strategic goals in the Skills Strategy. An annual monitoring report is published each year on the Skills Strategy. The first annual monitoring report was published in March 2023. The update showed that progress had been made towards achieving the strategic goals to increase the proportion of the working age population with qualifications at Level 2 and above (from the 76.3 per cent 2020 baseline up to 78.5 per cent) and Level 3 (from the 56 per cent 2020 baseline up to 59.9 per cent). No progress had been made on the strategic goal to increase the proportion of individuals graduating with degrees in narrow STEM subjects.

3.19 Whilst not a strategic goal, one of the recommendations in the Skills Strategy also targeted an increase in the participation rate in adult learning from a 2020 baseline of 18.2 per cent to 25 per cent by 2030. Disappointingly, the first annual monitoring report showed that there had been a decrease below the original 2020 baseline, with the adult learning participation rate down to 17.3 per cent.

3.20 A second annual monitoring report is currently in draft. It concerningly shows that there have been decreases since the previous annual monitoring report against the two strategic goals to increase the proportion of the working age population with qualifications of at least Level 2 or Level 3. There has again been no progress against the third strategic goal to increase the proportion of individuals graduating with degrees in narrow STEM subjects. The second annual monitoring report also noted that the adult participation rate in education or training, targeted to increase to 25 per cent, had decreased further to 16.3 per cent compared to the 2020 baseline (18.2 per cent) and first annual monitoring report (17.3 per cent). See Figure 13 for a summary of these results.

Figure 13: Performance against the strategic goals and additional target in the Skills Strategy        

Insert placeholder Figure 13

Source: NIAO summary of details included within the Skills Strategy annual monitoring reports

3.21 Whilst the second annual monitoring report suggests that the 2022 outcomes at Level 2 and Level 3 may be outliers as they are not consistent with the long term growth trends since 2016-17, it recognises that significant improvements are needed to achieve the long term goals included in the Skills Strategy. DfE advised that the majority of skills interventions typically take between two and four years for an individual to complete, therefore the five-year review point in the Skills Strategy will be a key stage in assessing the impact of the Strategy on outcomes.

3.22 The second annual monitoring report also covers the initial two-year period noted for the 50 implementing actions contained in the Skills Strategy (see paragraph 1.7). Whilst the Skills Strategy did not include target dates for all actions, the first annual monitoring report in March 2023 anticipated delivery of 26 actions by the end of March 2024 (with 5 actions considered delivered already by March 2023). The second annual monitoring report presents an update on these 26 actions. Whilst we note that progress has been made in some areas, including the introduction of all age apprenticeships in September 2023, our analysis of the comments included in the report indicate that 15 of these actions have not yet been achieved. DfE told us that its capacity to make substantive progress on some recommendations, including those with cross departmental responsibility, has been limited due to the absence of Ministerial leadership and a functioning Executive and Assembly for the majority of the Skills Strategy’s lifetime. We also note that some actions were paused due to budget uncertainty.

3.23 The Skills Strategy was intended to be flexible and refreshed as necessary to ensure it delivered an evolving programme of work in response to economic and labour market needs. It is not clear if this is happening in practice. For example, the 2019 Skills Barometer was a primary evidence base informing the development of the Skills Strategy. Part Two of this report draws on the 2021 iteration of the Skills Barometer and changes in the forecast position and the Employer Skills Survey results from 2022, to set out the skills needed in Northern Ireland based on the most recent data available. We remain unsure as to how the Skills Strategy has evolved to reflect these changes in need or how DfE adapts its provision in response to need.

Conclusion

3.24 Limited progress has been made towards achieving the strategic goals set out in the Skills Strategy, and it is concerning that three of the key indicators have gone in the wrong direction in 2022, with one remaining static. DfE funds a range of initiatives and programmes to develop skills, many of which have individually positive outcomes and evaluations. However, there is a lack of clarity on how DfE brings the various measures and evaluations for each of its skills initiatives together to assess how successfully the portfolio as a whole is contributing towards achieving the goals set out in the Skills Strategy.

3.25 DfE has access to a range of data, including the Skills Barometer, the Employer Skills Survey and ongoing engagement with stakeholders, to enable it to identify and understand what the skills needs are in Northern Ireland. However, it was not clear to us how identified need is integrated into the planning and delivery of skills provision across Northern Ireland on an ongoing basis. For example, Part Two of this report notes that the 2021 iteration of the Skills Barometer shows an increase in the forecast undersupply at Levels 3 and above and Level 2 has changed from a balanced supply to an oversupply position. It also sets out how sectors affected by skills shortages have changed since 2019. We remain unsure as to how DfE adapts its provision at the scale needed to address these needs or how DfE ensures its portfolio, including the provision at HE and FE, is relevant and suitably focused on areas of need. More needs to be done to ensure that identified need is integrated into the planning and delivery of skills provision across Northern Ireland.

3.26 Performance to date indicates that the arrangements and actions are not working, and based on the current trajectory, DfE is unlikely to achieve the goals of the Skills Strategy in Northern Ireland. Significant change is needed to deliver the skills Northern Ireland needs now and in future years to support the achievement of the overarching economic vision for Northern Ireland.

Recommendation 2

DfE must ensure that resources are being used to best effect. We recommend that DfE reviews each of its skills programmes, including the objectives, design and outcomes, and considers how both individually and collectively the programmes contribute towards achieving the overarching strategic goals. DfE should focus spend on skills programmes that have the greatest impact in achieving the objectives of the Strategy.

Recommendation 3

DfE must use the available data to drive change by ensuring that current programmes and new initiatives are suitably focused on current and emerging areas of need as evidenced by stakeholders.

Recommendation 4

We recommend that DfE reviews the implementation actions which underpin the Skills Strategy to ensure they remain relevant in supporting the ambitions of the Skills Strategy and the economic vision, and that there is clarity on how they will be successfully implemented. DfE should ensure that demonstrable success has been achieved in delivering the Skills Strategy at the five-year review point.

Part Four: There are weaknesses in the governance arrangements and plans to support a coherent approach to developing skills in Northern Ireland

4.1 Effective governance and oversight arrangements are crucial in developing workforce skills. As noted at paragraph 1.8 there are a wide range stakeholders involved in the development of skills in Northern Ireland and it is essential they work together to deliver a coordinated approach to skills planning and development.

4.2 One of the issues identified in DfE’s 2020 evaluation of the previous skills strategy ‘Success through Skills – Transforming Futures’, was the need for wider buy-in from across government and the Northern Ireland Executive. In the same year, the OECD report identified the need to strengthen the governance of skills policies in Northern Ireland as a key area. It highlighted the importance of a whole of government approach, effective stakeholder engagement, integrated information systems and co-ordinated financing arrangements as being essential to improve skills development and use. It concluded that co-ordination on skills policy could be improved in Northern Ireland, within and between government departments with a better whole-of-government approach, and between central and local government. It also noted concerns that the number of employer engagement bodies on skills policies in Northern Ireland was too high, leading to confusing overlap and frustration which challenges meaningful engagement, as stakeholders struggle to understand and engage effectively with the complex landscape.

A much needed review and rationalisation exercise of bodies in the skills landscape will not complete until 2027

4.3 The Skills Council (see paragraphs 3.12 -3.15) was established to support a strategic approach to skills policy and to develop a more cohesive skills system. It is intended to be a long-term body which will drive strategic co-ordination and greater cohesion across the skills system. It has been established as an advisory body, meeting quarterly, to provide strategic advice to Northern Ireland Executive ministers and government departments on issues pertaining to the development of skills policy. In order to drive collaboration and complementarity, additional stakeholder groups advising on skills issues are only to be formed in agreement with the Skills Council.

4.4 In response to concerns that the existing advisory skills landscape was crowded and confused, the Skills Strategy included a recommendation that the Skills Council should undertake a review and rationalisation exercise of advisory bodies to minimise duplication and ensure clarity of purpose among existing advisory bodies. However, we were alarmed to note that this important work is only targeted for completion by March 2027 – five years in to an eight-year strategy. We recognise that whilst the Skills Council is anticipated to be a key advisory body, it is a part time role for its members and there are limitations to what it can achieve and how quickly. In our opinion, DfE should consider how this important work can be progressed with greater urgency.

There is a lack of clarity in the governance and oversight arrangements for the Skills Strategy

4.5 The Skills Strategy recommended the creation of a cross-departmental NI Civil Service management board to sit under the Skills Council and ensure cohesive delivery of actions, with representation from all government departments. DfE told us that this management board is in effect the Skills Strategy Programme Board, which met for the first time in September 2022. Despite the intentions of the Skills Strategy, the Programme Board only included representatives of three departments: DfE, DE and DfC. These three departments are particularly relevant given their responsibilities on skills, education, and employability policy. However, given the previous concerns raised around government buy-in for skills development, and the recommendations from the OECD to strengthen the governance structures, it is disappointing that wider cross-departmental arrangements in support of the Skills Strategy were not put in place.

4.6 In addition to the difficulties with achieving whole of government involvement, the Skills Strategy Programme Board has struggled to put in place effective programme management arrangements. In 2023, work had been undertaken to develop a reporting system to monitor progress against the recommendations identified in the Skills Strategy. Highlight reports were developed, containing all the recommendations assigned to the relevant project owners and including sections for project owners to record their risks and issues specific to their recommendations. This then fed into a Summary Programme Update report which included a Red/Amber/Green progress status for each recommendation and was considered at the Skills Strategy Programme Board.

4.7 These reporting and monitoring arrangements were short-lived as concerns were raised over duplication with processes and structures already in place, leading to nugatory work. Concerns were also recently raised within DfE that across both DfE’s Skills and Education group and the wider Department, there was a lack of buy-in for both the revised strategic vision articulated in the economic strategy launched in 2021 (A 10x Economy Northern: Ireland’s Decade of Innovation) and the Skills Strategy.

4.8 A new head of the DfE Skills and Education Group was appointed in August 2023 and the merit of the ongoing classification of this body of work as a programme was questioned. A proposal was then raised in October 2023 by DfE to replace the Skills Strategy Programme Board with a cross-departmental steering group, with a refreshed aim of achieving the whole of government approached envisaged in the Skills Strategy. No further progress has been made on this to date.

Significant issues have been identified in the governance and implementation of the 14-19 Framework

4.9 In 2017, the Minister of Education and the Minister for the Economy agreed that officials in DE and DfE should work together, as a priority for both departments, to develop a coherent education policy for the 14-19 age group. This age group is where young people face significant milestones and make important decisions about what, how, and where to study, or whether they will leave education and training. The latest available figures from 2021-22 showed that at least 71 per cent of school leavers remained in education via HE or FE, a decrease compared to the 77 per cent of school leavers in 2016-17. Over the last five years, whilst the proportion entering HE has been stable at 42-44 per cent (except for an increase during the COVID-19 pandemic), the proportion of school leavers entering FE has decreased from 34 per cent in 2016-17 to 27 per cent in 2021-22. We also note that there has been an increase in those intending to enter employment from 19 per cent in 2016-17 to 25 per cent in 2021-22. DfE told us that some of that increase relates to school leavers entering apprenticeships, and availing of the associated training delivered in FE Colleges however that data is not specifically identifiable in the DE School Leavers Survey.

4.10 The Transition of Young People into Careers (14-19) Project was established in January 2019 and jointly funded and supported by DE and DfE. The project aimed to transform the education and training system to deliver better outcomes for children and young people. As part of its work, the project sought to assess provision across schools, colleges and other providers, and identify actions for developing a more strategic approach to 14-19 education.

4.11 An overarching framework, Developing A More Strategic Approach To 14-19 Education And Training: A Framework To Transform 14-19 Education And Training Provision (the 14-19 Framework) was published in June 2022. This is a joint Framework between DfE and DE. The implementation of this Framework was intended to be central to the delivery of the vision set out in “A 10x Economy”, in delivering the objectives set out in the Skills Strategy, and in addressing some of the actions in DE’s “A Fair Start”.

4.12 The 14-19 Framework identified challenges to be addressed, including:

• inconsistencies in the delivery and quality of careers guidance across providers;
• a lack of parity of esteem between general/academic qualifications and technical/vocational qualifications; and
• competition between schools and FE colleges for pupils, alongside breakdowns of collaborative practices between schools and FE colleges (including instances of schools duplicating provisions already delivered by FE colleges).

4.13 The 14-19 Framework was underpinned by a range of strategic and supporting actions, however there is a lack of clarity as to how these actions were to be implemented and monitored. The action plan, which was included within the published 14-19 Framework, did not include targeted timeframes for implementation. We were provided with a ‘roadmap’ for implementation that suggested most actions were expected to be completed by the end of 2023, with others ongoing into future years but nearly all due to have commenced by the end of 2023. We were subsequently told that in June 2022, the then Ministers of both DfE and DE agreed an underpinning draft Action Plan. This version of the action plan did not set specific dates but instead categorised actions to be delivered over the short (1-2 years), medium (3-5 years) or long-term (5-10 years) alongside estimated costings. We found the progress on many of the actions to be limited (including on short-term actions imminently due for completion) and, in our opinion, the detail on actions taken to be lacking. As noted at paragraph 4.11, the implementation of this Framework was intended to be central to the delivery of the vision set out in “A 10x Economy” and in delivering the objectives set out in the Skills Strategy, therefore it is disappointing that limited progress has been made. We were told that despite the importance of this Framework, it was published without resource, and it has not been possible to allocate the resource needed to progress all actions simultaneously.

4.14 In January 2024, officials from DfE and DE commissioned a Gateway review to help identify the main challenges in implementing the 14-19 Framework and how these could be addressed. Figure 14 summarises the recent findings and conclusions from that Gateway review.

Figure 14: Gateway review of the 14-19 Framework Implementation Programme

Significant programmes and projects valued at £5 million and above delivered by theNorthern Ireland Civil Service are required to undergo the Gateway review process, which is a series of independent peer reviews conducted at key stages during a programme or project’s lifecycle. The 14-19 Framework Implementation Programme underwent the initial Gateway review point (Gate 0 – Strategic Assessment) in early 2024 and received a Red rating. A Red assessment under the Gateway review is defined as suggesting that successful delivery of a programme appears unachievable, that there are major issues which do not appear to be manageable or resolvable, and that the programme may need re-baselining or its viability reassessing and should not proceed onto its next phase until these issues are managed.

Whilst the Gateway review team noted that officials involved in the programme were supportive of the 14-19 vision, it concluded that the programme has struggled to make an effective transition from framework development to implementation. Significant issues were identified including:

• ineffective governance;
• unclear objectives;
• misalignment between the programme and stakeholders’ objectives;
• duplication of effort including a number of the actions in the 14 – 19 implementation
          plan also being covered in one or more other strategies such as the Skills Strategy;
• limited delivery management; and
• no benefits management.

Source: NIAO summary of Gateway Review Report

4.15 Work is progressing within DfE and DE to address the issues identified by the Gateway Review, including considering appropriate governance structures to best support implementation of the 14-19 Framework, and to agree priorities and key deliverables. In August 2024, the Red rating had improved to an Amber rating and work remains ongoing.

Stakeholders continue to express concerns on the clarity and coherency of arrangements to develop skills in Northern Ireland

4.16 As part of our engagement throughout this report, we issued a survey to selected stakeholders, who were primarily industry bodies, employer representative bodies, or FE and HE education providers, to inform our understanding of current perspectives of the skills system in Northern Ireland. Our survey also offered bodies the opportunity to set out what improvements they would like to see in the skills system.

4.17 Whilst half of respondents (50 per cent) to our survey felt that arrangements to develop skills have improved since the launch of the Skills Strategy, they continued to express concerns as to the clarity and coherency of those arrangements. The majority of respondents (63 per cent) did not agree that there is clarity on the roles and responsibilities across government for developing skills in Northern Ireland, with remaining responses mostly neutral and only a small proportion agreeing that there is clarity. Most respondents (75 per cent) disagreed that there is a coherent approach to the policies, initiatives, and interventions for developing skills to address identified skills need.

4.18 Common issues reported by stakeholders in response to our survey included:

• Difficulties persist in the supply of skills and experience.
• There is underfunding of skills provision and also challenges caused by single year budgets.
• Businesses find the skills landscape confusing to navigate.
• Delivery of skills provision is fragmented.
• There is a lack of a coherent approach to skills interventions both across government departments and within individual departments.

4.19 Stakeholders also included suggestions for improvements to the skills landscape in response to our survey, with recurring suggestions including:

• more effective co-ordination in both strategy and delivery across the whole of government;
• greater involvement of, and co-ordination with, industry in skills policy and on the content of initiatives;
• multi-year dedicated funding for skills; and
• establishing a user-friendly portal which could act as one central information point for employers and individuals to access details on skills needs, job vacancies, training opportunities and other skills related matters.

4.20 Similar concerns were also raised following widespread consultation by the Institute of Directors which highlighted that businesses in Northern Ireland continue to face significant recruitment and skills challenges and its members were frustrated by “the weak and disjointed skills and education system that hampers plans for business growth”.

Conclusion

4.21 The need to strengthen the governance of skills policies in Northern Ireland and the importance of a whole of government approach has been repeatedly highlighted and whilst there appears to have been good intentions in this regard in the development of the current Skills Strategy, that intention has not been realised, and there remains a perception amongst stakeholders that the approach to developing skills in Northern Ireland lacks clarity and coherency. Addressing the skills challenges facing Northern Ireland requires all stakeholders to work together. Weaknesses in the arrangements to support a coherent approach to developing skills must be addressed.

Recommendation 5

DfE must review, streamline and clarify the governance and oversight arrangements for skills in Northern Ireland and ensure that the skills system can be more easily navigated by stakeholders. It should clearly set out the roles and responsibilities of the different bodies in the skills system and eradicate unnecessary overlap. This review should clarify how these bodies will successfully interact with each other to establish a coherent and effective approach to address existing skills shortages and future skills needs in Northern Ireland.        

Appendix One: Summary of the findings and recommendations from key evaluations and reports which were used to inform the Skills Strategy (paragraph 1.6)

In addition to the data included in the Skills Barometer and the Employer Skills Survey (see Part Two of this report), the Skills Strategy, and in particular the strategic goals, policy objectives and themes of lifelong learning and governance, were informed by the outcomes and evaluation of Success through Skills – Transforming Futures (the previous skills strategy in Northern Ireland), The OECD Skills Strategy Northern Ireland, and a July 2019 report The Strategic Integration Of Skills & Innovation Policy In Northern Ireland: An International Small Economy Perspective prepared by the Landfall Group on behalf of DfE.

Success through Skills – Transforming Futures

Success through Skills – Transforming Futures, was the previous skills strategy in Northern Ireland. It was launched in May 2011 and included four strategic goals to be achieved by the end of 2020. Three of the strategic goals aimed to upskill the working population at Level 2, Level 3, and Levels 4-8 (see Figure 2) from baselines set in 2008. The fourth strategic goal aimed to increase the proportion of graduates qualifying from courses at Northern Ireland’s higher education institutions in science, technology, engineering, and mathematics (STEM) subjects, with an emphasis on physical and biological sciences, mathematical and computer science, engineering and technology (narrow STEM).

In February 2020, DfE published an evaluation of Success through Skills – Transforming Futures. The evaluation showed that by mid-2019, using the latest available data at that time, two strategic goals were achieved: the upskilling of Levels 4-8 qualifications and the proportion of narrow STEM graduates. Whilst significant progress had been made on the other two strategic goals (upskilling the workforce with Level 2 and Level 3 qualifications) they were not achieved. The evaluation concluded that overall, there was clear evidence that the strategy had a lasting impact with the introduction of qualifications such as Higher Level Apprenticeships, along with other actions resulting in a skills landscape that was profoundly different to when the strategy was launched.

The evaluation of the strategy highlighted a number of issues including:

• There was not wider buy-in from across government and the Executive for the strategy.
• There was a lack of clarity as to how the individual actions included in the strategy would lead to the scale of upskilling that would be required to achieve the strategic goals.
• Government expectations sometimes contradicted business needs.
• Small businesses were not sufficiently consulted during the development of the strategy.
• There needed to be a refocus towards vocational education and training (particularly at Levels 3 and 4) and also leadership and management skills provision.
• The insufficient supply of STEM graduates at Levels 6 and above was a critical challenge.

The evaluation included thirteen recommendations for consideration in the development and implementation of the next skills strategy for Northern Ireland. These recommendations covered a wide range of areas; including: recommendations that: the next skills strategy should take a whole of government approach and be endorsed by the Executive; the strategy should be launched alongside a flexible implementation with periodic reporting of performance; and creating a culture of lifelong learning will be essential in a future skills strategy.

The OECD Skills Strategy Northern Ireland

In 2020, the OECD Skills Strategy Northern Ireland provided Northern Ireland with tailored findings and recommendations on its skills performance. It commented that significant progress had been made in Northern Ireland to strengthen its skills and economic performance, but the COVID-19 pandemic had the potential to reverse much of that positive performance.

It also highlighted persistent challenges which remained including:

• high rates of economic inactivity;
• productivity rate below the UK average;
• skill levels of adults below those in many other OECD countries;
• employees not using skills to full potential; and
• poor governance arrangements across policy areas and levels of government.

The report made 65 recommendations across four areas:

• reducing skills imbalances;
• creating a culture of lifelong learning in Northern Ireland;
• transforming workplaces to make better use of skills in Northern Ireland; and
• strengthening the governance of skills policies in Northern Ireland.

The Strategic Integration of Skills & Innovation Policy in Northern Ireland: An International Small Economy Perspective

This report provided an assessment of the current skills and innovation policy approach, specific priorities for improvements in skills policy and in innovation policy, and options for strengthening the strategic integration of skills policy and of innovation policy.

It noted that “high quality institutions are central to effective strategic integration of skills and innovation policy (and also across other policy domains). Without high quality decision-making and accountability structures, it is difficult to make sustained progress…” It highlighted that “leadership and governance is required to deliver on an integrated, whole of government agenda, because of the number of relevant organisations and initiatives.” One department (DfE) taking on the lead role was noted as a positive move in terms of supporting greater policy coordination, but the report concluded more could be done.

Appendix 2: Study Scope and Methodology (paragraph 1.14)

The scope of our report

Given DfE’s responsibility for leading on skills policy in Northern Ireland, this report has focused on its activities in this area. However, there are aspects in the development of skills that overlap with the Department of Education (DE) and its responsibility for compulsory education. DE is responsible for setting policy, strategy and for the central administration of education and related services in Northern Ireland. The wider DE group, including the Department and its arm’s length bodies, are responsible for early childhood, primary and secondary level education, special education and the youth service, and are also responsible for careers education in school settings (whilst DfE remains responsible for the Careers Service in the school setting).

As such, the report considers the joint working between DfE and DE specifically on the development of a policy and framework for the 14-19 age group, when young people face significant milestones and make important decisions about what, how, and where to study, or whether they will leave education and training.

The main elements of our review methodology were as follows:

• We interviewed staff from DfE and DE.
• We attended and observed a meeting of the Skills Council and met with the Chair of the Skills Council.
• We reviewed published and unpublished documents from a range of bodies.
• We invited stakeholders, primarily industry bodies, employer representative bodies, FE and HE education providers to respond to a consultation exercise through a survey. Most questions in the survey were multiple choice questions with a standard five option range of responses available: Strongly Disagree; Disagree; Neither Agree nor Disagree; Agree; and Strongly Agree. Our survey also included two free-form questions giving respondents the opportunity to identify issues with current skills arrangements affecting their organisation or member bodies and suggestions for improvements they would like to see in the skills system. Whilst the survey only issued to a small number of bodies, responses that were received provided useful insight into stakeholder perspectives.

We did not undertake a detailed review of the performance measures and evaluations for each of the skills programmes provided by DfE.