05 December 2005
Leitch Review of Skills
Interim report
In 2004, the Government commissioned Sandy Leitch to lead an independent review of skills. The Leitch Review of Skills was asked to identify the optimal skills mix for the UK in 2020 in order to maximise economic growth, productivity and social justice, and to consider the policy implications of achieving the level of change required.
The context for the Review was set out in the 2004 Pre-Budget Report in the document Skills in the global economy.
The Leitch Review of Skills published its interim report, Skills in the UK: The long-term challenge, on 5th December 2005.
The Leitch Review is available below in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
Press Notice: 05/12/05 Leitch Review Skills in the UK: The long term challenge
The Leitch Review will report its conclusions and recommendations to the Government in 2006.
A brief overview of Skills in the UK: The long-term challenge:
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The UK has a strong economy and world-leading employment levels, but its productivity trails many key comparator nations; poor skills are a key contributor to this problem as well as having wider impacts on social welfare.
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Over the last decade, the skills profile of the working age population in the UK has improved. For example, the proportion of adults with a degree has increased from a fifth to over a quarter of the population.
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Despite these improvements, the UK still does not have a world-class skills base:
- over a third of adults in the UK do not have a basic school-leaving qualification – double the proportion of Canada and Germany;
- five million people have no qualifications at all;
- one in six adults do not have the literacy skills expected of an 11 year old and half do not have these levels of functional numeracy.
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Looking ahead to 2020, global, demographic and technological change will place an even greater premium on the UK’s skills profile.
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New analysis conducted by the Review shows that, if the Government meets its current ambitious targets for improving the UK’s skills, by 2020:
- the proportion of working age people without any qualifications will fall to 4 per cent; and the proportion of adults holding a degree will increase from 27 per cent to 38 per cent; and
- this will have significant benefits for the economy – increasing annual productivity growth by 0.2 per cent with a net benefit to the economy of £3 billion a year, equivalent to 0.3 per cent of GDP.
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However, even if the UK can meet the current challenging targets, the nation’s human capital will still fail to be world-class. Considerable problems will remain; at least 4 million adults will still not have the literacy skills expected of an 11 year old and 12 million would not have numeracy skills at this level.
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The Review has analysed more ambitious scenarios for 2020:
- tackling the stock of low skilled adults without qualifications, basic literacy and numeracy;
- investing more in intermediate skills; and
- further increasing the proportion of adults holding a degree.
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In all of the scenarios, the analysis shows the significant economic and social benefits that would result from higher productivity and employment gained through improving skills. The Leitch Review believes that the UK must urgently raise its game and set itself a greater ambition to have a world-class skills base by 2020.
Terms of reference
The terms of reference published alongside the 2004 Pre-Budget Report are:
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to examine the UK’s optimum skills mix in order to maximise economic growth and productivity by 2020; and
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in particular, to consider the different trajectories of skill levels the UK might pursue.
Key questions for the Review to address are:
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What is the current trajectory for the development of skills in the UK and therefore the likely profile of skills in 2020?
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What will be the optimal skills mix in 2020? For example, in relation to economic and social objectives; the feasibility and cost of implementing policy; and international comparisons.
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What trajectories can the UK pursue in order to achieve this skills profile by 2020?
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What are the implications for policy?
Sandy Leitch
Sandy Leitch is Chairman of the National Employment Panel and formerly a Chief Executive of Zurich Financial Services.
Review Team contact details
If you would like to comment on the Leitch Review’s interim report please contact the Review project team.
The contact details for the Leitch Review of Skills project team are:
Leitch Review of Skills
Zone 4/E1
HM Treasury
1 Horse Guards Road
London SW1A 2HQ
Email: leitch.review@hm-treasury.gov.uk
Fax: 020 7270 4414
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