This is an update on the recent Cabinet reshuffle and its implications for skills policy and NSAR.
Potential Major Shift in Skills Policy
Last week’s reshuffle has triggered a potentially substantial change in the administration and direction of skills policy. Large areas of the skills remit have been transferred from the Department for Education (DfE) to an expanded Department for Work and Pensions (DWP), which will now focus on delivering growth under a new Secretary of State, Pat McFadden.
The Rationale Behind the Change
This shift appears to be driven by a combination of the following factors:
1. Reflects the government’s aim to reduce economic inactivity and pressure on the welfare budget by linking benefits more closely to work.
2. DfE’s perceived limitations in linking skills policy to the government’s broader growth and employment agenda.
3. Power dynamics with the Treasury, with this move potentially designed to shift control over growth policy away from No. 11.
4. Following Darren Jones’s appointment as Chief Secretary to the Prime Minister and his absorption of many of McFadden’s former responsibilities, there was a need to give McFadden a new role commensurate with his standing. The expansion of DWP’s remit may therefore, to some extent, reflect political necessity as much as policy logic.
What We Know So Far
When it comes to the specifics, very little has been clarified. The DWP will be the main skills department, with much of the portfolio being transferred to it. However, the DfE will retain control over Further Education (FE), maintaining a meaningful stake in the skills space.
Beyond this, the remaining responsibilities are distinctly unclear, particularly the future role of Skills England within the new structure.
The Secretary of State has announced that his major departmental priority will be combating economic inactivity.
The Implications for the Industry and NSAR
This change could benefit both the rail sector and NSAR. The new focus on linking welfare to work will likely place a stronger emphasis on vocational training. The rail industry is well-positioned to support this, and NSAR is well-placed to lead the initiatives needed to seize the opportunity.
As mentioned, one thing the government has been clear on is that addressing economic inactivity will also be central to the new department’s mission. Rail again has a strong role to play, given its ability to create high-quality jobs in areas of high inactivity. The work NSAR and the wider industry have undertaken on social value is likely to find a more receptive audience.
However, the change also carries risks. The decision may be driven as much by politics as policy, and the lack of clarity around the new department’s powers suggests it could have been made hastily. Implementing a well-thought-out reform will still require laying new foundations and significant policy change, with an attendant likelihood of delays and instability. If the reform hasn’t been well considered, the challenges could be considerably greater.
There is also a risk in terms of strategic focus and priorities. The DWP’s core institutional focus on pensions and welfare means there is clear potential for the skills remit to be overshadowed. Moreover, there is a further risk that the DWP, driven by political pressure to demonstrate short-term success, may prioritise immediate job creation over more comprehensive, longer-term training and workforce development.
Finally, it is worth noting that this is not a new idea. There have been previous attempts to combine employment, welfare, and skills policies within one department, which were subsequently seen to have been ineffective.
Overall Analysis
Too much remains uncertain to form a clear view. We will need to wait for a more definitive plan from Whitehall. Regardless, there are clear opportunities for NSAR and the industry to position themselves advantageously within the new system.
If you would like any further information, please do not hesitate to get in touch.