This chapter examines the supply of skills: the skills that are currently available in the UK. First, we will consider the overall level of skills in the workforce as well as the situation of both young people and adults; and we shall examine how these skills have been changing over recent years. Second, we will go on to assess the nature and extent of the inequalities that exist in workforce qualifications between different social groups as well as the problem of basic skills. Third, we review the participation of both young people and adults in learning (including training) and consider some of the barriers which prevent higher levels of participation from occuring. Next, we outline the skills of both the unemployed and the economically inactive before moving on to consider the problems of the existence of skills shortages and skills gaps. Finally, the chapter seeks to place UK skill levels in international context by benchmarking our skills position and recent performance against that of other OECD countries.

Workforce qualifications

Overall, around one quarter of the workforce (27%) are qualified to NVQ level 4 and above; a quarter (25%) to NVQ level 3 and above; and a fifth (23%) to NVQ level 2 or above. Around 14% are qualified to NVQ level 1 while about 11% have no recognised qualifications at all (see Figure 2.1). These figures represent a considerable improvement from the situation that existed 20 years ago. In 1979 more than 40% of the economically active did not hold any qualifications (compared to 15% today) and only just over 20% were qualified to NVQ level 3 or above (compared to 48% today).

More recent change demonstrates the continuing shift towards a more highly qualified workforce. Since 1995 there has been a reduction in the proportion of the economically active whose highest qualification is below level 2 and an increase in the proportion qualified to NVQ or equivalent levels 2, 3 and 4+ (see Figure 2.1). Between 1995 and 2001, the number of economically active people increased by approximately 700,000 but the increase in the numbers of those qualified to NVQ level 3 and above amounted to around one-and-a-half million. More than one million of these were qualified to NVQ level 4.