Episode summaryThe UK Government estimates that around 70% of roles are highly exposed to AI, business investment in training has fallen by roughly 30% per employee since 2011, and over a million young people are not in education, employment or training. In this episode, host Joe is joined by three guests to ask whether the UK's skills system can keep pace with AI and net zero, and what a faster, more accountable, more locally responsive system would look like. Francesca Fraser (Head of Policy and Public Affairs at Multiverse) sets out the national picture, covering the speed of AI-driven change, the funding imbalance between universities and apprenticeships, and the case for making it commercially attractive for employers to hire young people. Mark Hilton (Director of Policy Delivery and Membership at Business LDN) brings a London lens, covering devolution, the new single integrated settlement, and London's Local Skills Improvement Plan (LSIP). Ciara Walker (Principal Consultant at WPI Economics) then goes behind the scenes of the LSIP research, covering employer and provider evidence, AI skills demand, green skills and post-pandemic gaps in basic and social skills. The episode closes with host reflections on Andy Burnham's early weeks as Prime Minister, including his focus on parity of esteem between degree and vocational routes, and a practical policy step to prevent parents losing child benefit when their child takes up an apprenticeship. GuestsFrancesca Fraser, Head of Policy and Public Affairs, Multiverse - The national picture: speed of AI-driven change, apprenticeship vs. university funding, and employer incentives to hire young people Mark Hilton, Business LDN - The London lens: devolution, the single integrated settlement, and London's Local Skills Improvement Plan (LSIP) Ciara Walker - WPI Economics: Behind the scenes of the LSIP research: employer and provider evidence, AI skills demand, green skills, and post-pandemic basic/social skills gaps Key themes and discussion points1. The national picture — Francesca Fraser, Multiverse• The UK's skills system has real strengths — strong universities, FE colleges and anchor employers — but struggles on speed and accountability. • AI-driven job change is moving far faster than previous structural shifts (e.g. the Industrial Revolution): it took roughly four years to get an apprenticeship standard broad enough to reflect AI tools already in daily use. • Around 80% of today's workforce will still be working in 2035, so reskilling the existing workforce matters as much as training new entrants. • No one actor — government, employer or individual — has clear ownership of the workforce transition, which undermines agility. • Nearly 1 million young people are NEET; inconsistent age definitions for "young person" (18, 21 or 25 depending on the scheme) are one thing that makes it harder for employers to hire them. • University returns are falling (IFS research points to a roughly one-third fall in the financial return to a degree) while apprenticeships remain oversubscribed — about 4.4 applicants miss out for every place filled. • University demand is student-led and uncapped; apprenticeship funding is employer-led and effectively capped, which structurally skews the balance toward degrees. • Immigration has a role in filling acute, time-critical skills gaps (e.g. major infrastructure) that domestic training pipelines cannot meet quickly enough, alongside continued investment in homegrown training for core industries such as nuclear. "We ultimately don't know [the full impact], and it depends on employee demand and how the economy behaves, but the government cites a figure that 70% of UK roles are deemed high exposure." — Francesca Fraser, Multiverse 2. The London lens — Mark Hilton, Business London• 46% of London jobs are exposed to generative AI, alongside stretching net zero targets (the Mayor’s 2030 net zero goal) driving demand for retrofitters and EV charging installers. • London relies more heavily on migrant labour than the UK average: 40% of payrolled jobs are held by non-UK nationals, versus around 19% nationally. • Migration is framed as a short-to-medium-term stabiliser for acute gaps (e.g. health, construction, specialist finance), while long-term resilience depends on local training. • Devolution is progressing; London's new single integrated settlement gives the Mayor and GLA a single funding pot rather than multiple ring-fenced streams, increasing local flexibility. • London's Local Skills Improvement Plan (LSIP), led by Business London, channels employer voice into training design, but stronger alignment with national policy (funding frameworks, qualifications, the growth and skills levy) is still needed. • Reversing the long-term decline in employer training investment requires simplifying navigation of the system; speeding up apprenticeship levy reform into the growth and skills levy; incentives such as the £2,000-per-apprenticeship SME grant and youth guarantee scheme funding; stronger employer-provided collaboration (e.g. sector talent boards, college clusters); and a mindset shift toward seeing training as investment rather than cost. "For me, [migration and domestic skills] are two sides of the same coin. This isn't an either/or — we need both." — Mark Hilton, Business London 3. Behind the LSIP research —Ciara Walker, WPI Economics• The LSIP research drew on a wide range of stakeholders — employers, training providers and government — plus existing evidence such as the GLA's sector talent boards, to avoid duplicating work. • Employers and providers rarely disagree on goals but face conflicting resource constraints: providers report that flexible, employer-designed courses are sometimes under-subscribed once built, while employers report that funding changes and economic conditions reduce their ability to release staff for training already commissioned. • The clearest shift versus the previous LSIP round is broad-based demand for AI skills across sectors, though employers often cannot yet specify exactly which AI skills they need. • Demand framed explicitly as "green skills" has softened, but the underlying content appears to be migrating into other courses rather than disappearing. • A new and significant finding: employers report gaps in basic and social skills among new entrants, particularly in sectors like hospitality, linked to pandemic-era disruption to education and a shift toward online learning and work. Providers are responding by building these skills into more courses, and employers are adding supplementary training for new graduates and entrants. "It's less disagreement and more different routes to achieving the same goals, and at times conflicting resource constraints." — Ciara Walker, WPI Economics 4. Host reflections: a new political context• Since recording, Andy Burnham has become Prime Minister and has made parity of esteem between degree and vocational routes an early priority. • One concrete step already announced: a bursary to prevent parents losing child benefit when their child takes up an apprenticeship — directly addressing a barrier Francesca Fraser raised in her interview. • The host notes that broader systemic change still depends on employers offering more apprenticeships, and on wider economic conditions giving employers the confidence to invest in staff. • Localism is a strong theme of the new administration, but the employer voice must remain central to local decision-making — the core rationale behind LSIPs. Key statistics referencedFigure Source/context · ~70% of UK roles are highly exposed to AI - Government figures, cited by host and Francesca Fraser · 46% of London jobs are exposed to generative AI - Cited by Mark Hilton, Business London · Business investment in training down ~30% per employee since 2011 - Cited by host and Mark Hilton (~£10bn real-terms fall over the decade) · Over 1 million young people not in education, employment or training (NEET) - Cited by host and Francesca Fraser · For every apprenticeship place filled, roughly 4.4 applicants miss out - Research cited by Francesca Fraser · 40% of payrolled jobs in London held by non-UK nationals, vs. ~19% UK-wide GLA data, cited by Mark Hilton · UK job skills requirements changed by around a third - Lightcast data, cited by Mark Hilton · £2,000 per-apprenticeship incentive for SMEs - Government incentive, cited by Mark Hilton Three takeaways• Speed and accountability are the system's core weaknesses: AI is reshaping jobs on a six-to-twelve-month cycle, while formal skills responses (e.g. new apprenticeship standards) can take years, and no single actor owns the transition. • The funding architecture — uncapped, student-led university funding versus capped, employer-led apprenticeship funding — structurally favours degrees over technical routes, regardless of relative returns or demand. • Local delivery (LSIPs, devolved settlements, sector talent boards) is gaining real traction but only works if paired with a stable...
