The 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.

Guests

Francesca 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 points

1. 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 referenced

Figure 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...]]>Episode summary

The 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.

Guests

Francesca 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 points

1. 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 referenced

Figure 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 national framework for funding, qualifications and immigration policy, and if the employer voice is genuinely built into design, not just consulted after the fact.

Find out more

Read more on WPI Economics' work with Business London on London's Local Skills Improvement Plans, and on the themes raised in this episode, at wpieconomics.com.

If you enjoyed this episode, please subscribe, leave a review, and share it with a colleague who cares about where Britain's skills system goes next.

Sources

Figure / 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

Chapters

00:00 UK Skills Under Pressure

01:55 AI Speed and Accountability

05:10 Youth Jobs and Reskilling

07:35 National vs Local Skills Policy

09:33 Immigration and Training Gaps

11:34 Degrees vs Apprenticeships

15:39 Fixing Employer Training

17:42 London Skills Reality Check

22:38 Devolution and LSIP Impact

31:44 Rebuilding Employer Investment

39:30 New Government Skills Shift

42:20 Inside the London LSIP

47:40 What Employers Need Now

50:35 Key Takeaways and Next Steps

John Godfrey (TheCityUK) argues financial services underpin jobs and everyday life, and calls for better education, accessible guidance, tackling digital exclusion, and forward-looking policy on digital currencies, crypto and digital ID; he also discusses permitting product bundling to widen insurance cover, using “sharpened carrots” such as auto-enrolment and Flood Re, and how to unlock the benefits of new growth and competitiveness objectives for regulators.

Rebecca Deegan (Fair By Design) stresses the impact of the poverty premium, says low income drives exclusion, and wants markets reshaped through rules and intervention (notably in motor insurance), alongside inclusion-focused regulation, greater workforce diversity, and transparent, equitable AI.

WPI Economics’ Matt Oakley and Joe Ahern reflect on market–state partnership examples, including access to cash and CDFI support, and link financial inclusion with economic growth.

00:00 Welcome and Topic Setup

01:05 Why the City Matters

01:55 Expanding Financial Inclusion

03:08 Future Proofing Inclusion

05:56 Bundling and Protection

06:58 Carrots, Sticks and Examples

10:11 Avoiding Unintended Effects

13:52 Competitiveness Objective

16:02 AI and Digital Change

18:34 Rebecca on Poverty Premium

20:24 Designing for Inclusion

23:57 Strategy Gaps and Motor Cover

26:44 Sticks and System Reform

28:51 Credit Caps and Tradeoffs

30:56 Regulation Competition Outcomes

33:04 Workforce Diversity Matters

37:10 Rebecca on AI Risks

39:43 WPI Reflections with Matt

42:06 State Market Partnerships

45:02 Growth Case for Inclusion

46:38 Wrap Up and Next Steps

We speak to two guests - Harriet McCann, the Director of Policy, Insights and External Affairs at the National Youth Agency, and Richard Rigby, the Head of UK Government Affairs at the King's Trust, who give their perspectives on the multifaceted causes of this challenge, which include - but are not limited to - economic instability, the lingering effects of the COVID-19 pandemic, and increased mental health concerns among the young. We explore the systemic barriers that exacerbate this crisis and the potential strategies for fostering a more supportive environment for young people.

The episode touches on the recently published National Youth Strategy and the need for cohesive, cross-departmental collaboration to address these issues. The WPI Economics team then reflects on the need for a holistic approach that emphasises the importance of early intervention and support mechanisms to mitigate the risks faced by the current generation.

Takeaways:

1. The podcast discusses the alarming statistic that nearly a million young individuals in the UK are currently classified as neither in education, employment, nor training, a situation that necessitates urgent action.
2. The conversation highlights the significant impact of the COVID-19 pandemic on the mental health of young people, exacerbating existing challenges and creating new barriers to employment and education.
3. Expert guests emphasise the fundamental role of youth work in fostering resilience and the importance of providing young people with trusted adults to guide them during critical transitions into adulthood.
4. It is posited that systemic issues such as child poverty and cuts to youth services have worsened the current situation for young people, necessitating a comprehensive reassessment of funding priorities and support mechanisms.
5. The episode underscores the need for a multifaceted approach, addressing both immediate employment challenges and the long-term societal issues impacting youth engagement and well-being

Links:

National Youth Strategy:

https://www.gov.uk/government/publications/youth-matters-your-national-youth-strategy/youth-matters-your-national-youth-strategy

National Youth Agency response:

https://nya.org.uk/nya-response-to-the-national-youth-strategy/

King’s Trust’s 50th Anniversary social impact report: https://www.kingstrust.org.uk/about-us/news-views/50-years-of-working-for-young-people-report

NEET data, February 2026, ONS:

https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment/bulletins/youngpeoplenotineducationemploymentortrainingneet/february2026

00:00 Welcome and Youth Strategy

01:22 Why NEET Is Rising

02:48 Youth Work and Prevention

05:54 Funding and Joined Up Government

08:54 Trusted Adults by 2035

10:33 Proving Impact and Value

12:14 What We Over and Underthink

14:01 Richard on Disrupted Generation

17:22 Kings Trust Solutions and Partnerships

21:23 Impact Report and ROI Evidence

22:46 Stop Blaming Young People

24:52 WPI Debrief UK Specific Problem

28:41 How the SROI Was Built

32:11 Ed on Poverty and Pensions

35:41 Wrap Up and Next Steps

Thinking Policy = Policy Unboxed.

This episode discusses the legacy and influence of the first Pensions Commission, lauded for setting a standard in evidence-based, long-term policymaking, and the challenges facing its successor. The episode examines the first Commission's impact, the continuity of its policy approaches and the importance of long-term decision making. It explores what has changed in the employment landscape since, including the rise of self-employment, and the need for the future system to tackle remaining gaps in coverage while also addressing issues around pension adequacy. The discussion looks ahead to how the second Pensions Commission can respond effectively to this more complex picture.

Joining the WPI Economics team for this first episode are our experts:

Jo Phillips - Director of Research and Innovation at Nest Insight https://www.nestinsight.org.uk/ https://www.linkedin.com/in/jo-phillips-3930323/

Matt Burrell - Head of Public Affairs for Long-Term Savings at Phoenix Group https://www.thephoenixgroup.com/

linkedin.com/in/matthewcburrell

For more information:

https://www.gov.uk/government/collections/the-pensions-commission

www.nestinsight.org.uk

Workplace emergency savings, including sidecar saving

Supporting self-employed people to save for retirement

Housing and Pensions

Pensions adequacy and the household balance sheet

UK pension reforms (1997-2015)

NEW: Nest Insight research suggests caution needed over the idea of ‘pension access schemes’ for first-time home buyers

Join the conversation, find us at https://www.linkedin.com/company/wpi-economics/posts/?feedView=all

https://wpieconomics.com/podcasts/episode-1/

Keep up to date with our work, upcoming events and policy insights by signing up to our newsletter -

https://wpieconomics.us4.list-manage.com/subscribe?u=59aedfe7c4344116a3955fe95&id=8fa8a934e5

00:00 Introduction to the Pensions Commission

00:18 Evaluating the Commission's Reputation

00:47 Impact of Government Changes on Policy

00:58 The Role of Political Consensus

01:29 Fundamental Shifts in Pension Saving

02:10 Changes in Work and Retirement Since 2006

02:21 Challenges of a Pillar Two-Based Pension System

03:16 The Rise of Precarious Employment

03:41 Automatic Enrollment and Employer Roles

04:01 Pension Freedoms and Retirement Income

04:41 Balancing Complexity and Simplicity in Pension Systems

09:04 Increasing Private Pension Savings

09:46 Addressing Self-Employment in Pension Policy

10:49 The Commission's Remit and Recommendations

12:24 Conclusion: Ensuring Adequate Retirement

The WPI Economics team then reflects, fact-checks, and challenges assumptions to uncover what really works. Topics include inequality, welfare, housing policy, green growth, and the future of work. Subscribe on your favourite podcast app and follow WPI Economics on LinkedIn.

Join the conversation, find us at https://www.linkedin.com/company/wpi-economics/posts/?feedView=all

Keep up to date with our work, upcoming events and policy insights by signing up to our newsletter -

https://wpieconomics.us4.list-manage.com/subscribe?u=59aedfe7c4344116a3955fe95&id=8fa8a934e5

https://wpieconomics.com/

00:00 Introduction to Thinking Policy Podcast

00:13 Expert Guests and Their Perspectives

00:25 WPI Economics Team's Role

00:41 Topics We Cover

01:03 Join the Conversation