Get the Nation Learning: Why skills investment must be at the heart of growth

The Government’s ambition to drive economic growth and strengthen UK manufacturing depends on one critical factor: a workforce equipped with the skills needed for an increasingly digital, technology-driven economy.

While much of the skills debate focuses on attracting new talent, manufacturers know that meeting future demand will rely just as heavily on helping existing workers develop new skills throughout their careers. Adult learning, upskilling and retraining are therefore not just social priorities but business necessities.

New research from Learning and Work Institute (L&W), commissioned by Enginuity, underlines the scale of both the challenge and the opportunity. The research estimates that a Skills Tax Credit could generate £2.2 billion of additional employer investment in workforce training, including up to £138 million in engineering and manufacturing. At a time when businesses are under pressure to increase productivity and adopt new technologies, this represents a significant opportunity to strengthen the UK’s skills base.

The need for action is clear. Demand for higher-level technical skills continues to grow across manufacturing as businesses embrace automation, digitalisation and artificial intelligence. Yet investment in workforce training remains below where it needs to be. Across the economy, employer spending on training per employee has fallen significantly over the last two decades, while the manufacturing sector continues to face persistent skills shortages.

The consequences are substantial. Enginuity estimates that skills shortages cost engineering and manufacturing businesses £5.2 billion every year. These shortages affect productivity, slow the adoption of new technologies and limit growth opportunities for firms across the sector.

Manufacturers recognise the importance of addressing this challenge. Many employers already invest heavily in developing their workforce and expect spending on upskilling to increase over the next five years. However, businesses, particularly SMEs, often face difficult decisions when balancing investment in people against other commercial pressures.

This is where a Skills Tax Credit could make a meaningful difference. By providing a tax incentive linked directly to training expenditure, the proposal would encourage more employers to invest in skills development, qualifications and apprenticeships. Just as the tax system supports investment in capital assets and research and development, it could also support investment in people.

Importantly, the benefits would extend beyond individual employers. L&W’s research found strong support among engineering and manufacturing businesses for greater investment in skills, with employers highlighting benefits including improved productivity, increased use of new technologies, higher employee satisfaction and stronger business performance.

The case for supporting adult learning has never been stronger. Future workforce needs cannot be met through new entrants alone. As technology transforms manufacturing roles, many existing workers will need opportunities to acquire new qualifications, develop technical expertise and adapt to changing job requirements.

There are already positive developments. Apprenticeships, Skills Bootcamps, Higher Technical Qualifications and the forthcoming Lifelong Learning Entitlement all have important roles to play in creating more flexible learning pathways. However, employers consistently tell us that the wider skills system can still be difficult to navigate and that greater support is needed to encourage investment at scale.

That is why Make UK supports the Get the Nation Learning campaign. Creating a culture in which learning continues throughout working life is essential if the UK is to build a workforce capable of supporting long-term economic growth.

The latest research provides fresh evidence that practical policy interventions can help unlock greater investment in skills. For manufacturers facing rapid technological change, workforce development is not an optional extra. It is fundamental to productivity, competitiveness and growth.

If the Government is serious about creating a high-growth, high-skill economy, then investment in people must be treated with the same importance as investment in infrastructure, technology and innovation. A stronger commitment to adult learning and workforce development will be essential to delivering the skilled workforce that UK manufacturing needs for the future.