£275 million skills package unveiled as Business Secretary vows to “invest in British people to power industrial strategy”

Thousands of Brits are set to benefit from over £275 million in skills investment as part of one the most transformative skills overhauls the UK has seen in a generation.

It comes as the Business Secretary vows to “power the Industrial Strategy by investing in working people” as the government puts people at the heart of its plan to rebuild British industry with a bold new Industrial Strategy that backs British talent, not foreign labour.

The new funding includes over £100 million to boost engineering skills, with capital investment provided by our £200 million Skills Mission Fund.

The new Fund will support further education providers to deliver new facilities, equipment, technical qualifications, and collaboration with other training providers and employers across the country.

This includes creating new Technical Excellence Colleges to specialise in training the skilled workforces that local economies need.

The total funding is expected to train thousands more skilled workers by 2029, including mechanical, production, electrical and civil engineers, plus programmers and IT technicians and systems designers.

The investment responds directly to the UK's growing domestic skills gaps. Despite having world-class universities and a highly educated workforce, too many people are locked out of opportunity, and too many businesses are struggling to find the talent they need.

Currently one in seven young people are not in education or employment and the number of people taking part in apprenticeships have fallen by almost one fifth between 2016/17 and 2023/24. 

The Strategy will also set out a bold vision to reverse the overreliance on foreign labour and build a future-ready workforce that can drive innovation and inclusive growth across the UK.

Where previous governments have failed to plug the UK's skills shortage and ensure its apprenticeship and education offers are fit for the industries of the future, this government understands that the competitiveness of our high-growth sectors depend on their access to skills and talent.

The UK's modern Industrial Strategy will help give young people the skills and experience they need to secure well-paid jobs and upskill people in existing work. If they stay on their current trajectory, the Industrial Strategy's growth driving sectors will create 1.1 million new jobs by 2035 and deliver growth as part of the plan for change.

Business Secretary Jonathan Reynolds said:

“To make Britain the best place in the world to do business, we also need the best workforce in the world with the right skills and expertise to thrive.

“Our modern Industrial Strategy will be powered by investing in British people. It will help transform our skills system to end the overreliance on foreign labour, and ensure British workers can secure good, well-paid jobs in the industries of tomorrow and drive growth and investment right across the country, making our Plan for Change a reality.

“Where past governments have watched from the sidelines as British industry has faced under-investment and opportunities have been shipped overseas, this government is leading the way, and our modern Industrial Strategy is a downpayment on a decade of renewal.”

Education Secretary Bridget Phillipson said: 

“Skills rightly run right through the heart of this Industrial Strategy because they are key to breaking the link between background and success for young people and delivering prosperity for our country.

“Our commitment to growing the economy and delivering for people across the country is backed up with real investment, getting thousands of our young people on to courses and into jobs through our Plan for Change.

“This package builds on the reforms we have already made, slashing red tape and boosting funding to get businesses to invest in homegrown talent, with more people in skilled work and driving Britain forward again.” 

The modern Industrial Strategy will be bold and target interventions where they are needed the most to ensure the economy has the skills it needs for the future, including specific funding for skills in defence, digital and engineering and construction which the Government has launched, rather than leaving industry to fend for itself and let the markets decide.

The Strategy will create a culture of skills first so that every individual can access courses that are aligned to the needs of employers in their area. While the Government continues to roll out new shorter duration and foundation apprenticeships, the Industrial Strategy will go further by introducing new short courses in areas like digital, AI and engineering to help people train and upskill for the jobs of the future.

Alongside this, the Strategy will also boost skills and opportunities in the defence sector, including by providing funding for courses for defence-focused skills, and investment in cutting-edge university facilities to increase places for defence skills provision.

The funding package revealed today forms part of the Government's decisive action to overhaul the UK's skills system, following a £3 billion apprenticeship budget which will unlock 120,000 training opportunities in careers like construction, carpentry and healthcare support announced just last month.

Stephen Phipson CBE, CEO at Make UK said:

“We know that the foundation of any successful Industrial Strategy is people. Make UK strongly welcomes the Government's investment into engineering, and its commitment to reducing the skills gap in our sector. In supporting provision for both recruitment and upskilling, this is a promising start to filling the nearly 50,000 existing vacancies in manufacturing.

“Looking ahead, it is critical that Government continues to work with industry and develops a  long-term vision for skills in the sector. This starts with ensuring that all contributions made by employers can be used by employers from both the Growth and Skills Levy and the Immigration Skills Charge, and delivering the crucial funding reforms to ensure the training market is equipped and funded to train the next generation of manufacturers.

“We look forward to working with the Government to fix the skills gap in manufacturing, which has been the sector's Achille's heel for decades.” 

This package builds on the Prime Minister's commitment earlier this month during London Tech Week to a £187 million package to bring digital skills and learning into classrooms and communities and a new industry partnership to upskill 7.5 million workers with essential AI skills by 2030.

The Prime Minister is expected to launch the UK's modern Industrial Strategy – government's 10-year plan for national renewal – tomorrow. The modern Industrial Strategy will make it quicker, easier and cheaper to do business in the UK, giving businesses the confidence to invest and create good, well-paid jobs in thriving industries – delivering on this government's Plan for Change.

Later this week the Government will also launch its new Trade Strategy, which will set out how it will break down trade barriers, turbocharge exports and transform supply chains to make the UK the best-connected country in the world to do business.

ENDS

Notes to editors:

Kevin Craven, CEO of ADS, representing 1500 businesses in aerospace, defence, security and space said:

“Without the right people, in the right jobs and with the right skills, business cannot thrive. A modern industrial strategy should be people-first, providing the appropriate foundations for prosperity and growth. 

“Aerospace, defence, security and space are future leaning sectors, rich in engineering excellence and innovation in advanced manufacturing. Found in every corner of the country, they directly employ more than 440,000 people each year.

“Productivity in our sectors - which already outpaces the UK average - will continue to thrive with the appropriate government backing, found in the upcoming Industrial Strategy. We look forward to working with government and our members to ensure we maximise the opportunities within it and increase the UK's economic prosperity.”

Becki Robertson, Vice President of Human Resources, Agratas, said:

“Agratas will be creating up to 4,000 new green jobs at our battery manufacturing facility in Somerset, including a range of essential engineering roles, and we are building a skilled workforce of the future.

“In a high-growth innovative sector like ours, specialist training is fundamental to developing cutting edge skills, and the investment Government is making through a transformed skills offer in the Industrial Strategy will strongly support our critical workforce activities.

“Skills and growth go hand in hand, and we welcome the long-term approach of the new Industry Strategy, which can help to develop a world leading battery sector and create new rewarding employment opportunities.”