‘Skills chasm’ widens as UK faces regional education divide, warns study

The UK faces one of the largest regional skills gaps compared to most other European countries, with London significantly outpacing other areas in educational attainment, according to new research from the Learning and Work Institute.

The institute’s Worlds apart report reveals that two thirds of adults in London hold higher education qualifications, compared to just one third in Greater Lincolnshire. 

The disparity extends further, with people in the West Midlands three times more likely to be qualified below GCSE level (27 per cent) than those in west London (9 per cent).

We need to get more targeted if we want to solve the skills gap

Two thirds of organisations report ‘worrying’ skills shortages, research finds

Skills England can transform workforce development

Stephen Evans, chief executive of the Learning and Work Institute, warned that the skills divide was “a tale of two countries”. 

He said: “This has created a skills chasm between areas and has become a self-reinforcing cycle, with employers more likely to create high-skilled jobs in the south of England.

“To break out of this cycle, we must combine investment in jobs and infrastructure with more efforts to improve skills by the government and employers. Otherwise, the government’s ambitions for broad-based growth will fall flat.”

Stark regional disparities in education levels

The report estimated that closing the skills gap between London and the rest of the UK would require 4.1 million more people outside the capital to gain higher education qualifications. Without action, the problem is set to worsen.

By 2035, the percentage of Londoners with higher education qualifications is expected to rise to 71 per cent, while only 29 per cent of adults in Hull and East Yorkshire are predicted to reach the same level.

The pull of London and southern cities such as Bristol and Brighton continues to exacerbate the divide. Graduates are significantly more mobile than non-graduates and are drawn to areas offering better-paid jobs and opportunities, creating a persistent ‘brain drain’ from low-skill regions.

Gemma Ryall, senior manager at LACE Partners, said a shift towards skills-based development could help address these disparities. “Focusing on specific skills rather than traditional qualifications could provide a more equitable path forward,” she explained. 

By breaking learning into modular, accessible units, regions currently lagging in formal qualifications could build targeted workforce capabilities without the barriers of A-levels or degree programmes.

“An additional consideration is reviewing GCSE minimum requirements for further education entry, as rigid qualification barriers may prevent capable students from accessing higher learning opportunities,” Ryall added.

International comparisons highlight UK inequality

The UK’s skills gap is far more pronounced than in neighbouring countries such as Denmark, France and Sweden.

The Learning and Work Institute calculates that an additional 290,000 people in the West Midlands alone would need to achieve GCSE-equivalent qualifications to match the skills equality seen in these nations. 

While parts of the south of England are projected to match skills levels seen in global leaders such as Japan, South Korea and Canada by 2035, other regions risk being overtaken by countries such as Estonia, Latvia and New Zealand.

Solutions require joined-up action

The Learning and Work Institute said improving local skills alone was insufficient to tackle the problem. It warned that without addressing the lack of high-quality jobs in low-skill regions, newly qualified individuals would continue to migrate to cities offering better opportunities, perpetuating the cycle of inequality.

Darren Hayman, managing director of Macmillan Davies, agreed, saying: “Improving access to education and training is essential, but it must go hand in hand with investment in local economies to create high-quality jobs and infrastructure.

“Without this, skilled individuals will continue to migrate to cities such as London and Bristol, exacerbating the regional divide.”

Ryall added: “A skills-based approach must be integrated with broader economic development. Simply improving skills won’t solve the problem when areas lose skilled workers to economic hubs like London.”

The institute argued that efforts to close the skills gap needed to align with broader job creation and infrastructure investments. It pointed to a £1bn reduction in government investment in skills since 2010 and a 26 per cent drop in employer training investment since 2005.

“Coordinating the government’s skills strategy, growth and skills levy and local growth initiatives is essential to both develop talent and retain it through meaningful employment options across all regions,” Ryall added.

The government has promised to address these challenges with a post-16 skills strategy and a revamped growth and skills levy, expected in early 2025. 

Local governments and mayors across England have been tasked with developing growth strategies, and a spending review is set for spring 2025.

Lizzie Crowley, senior skills policy adviser at the CIPD, said: “This research highlights the need for joined-up policy on industrial strategy, skills and local growth to ensure that opportunities are more equally spread across the country.

“Yet, we also know that increasing the supply of skills is only one part of the solution and that currently far too many graduates end up in roles that do not require graduate-level qualifications.

“To tackle this, we need much greater focus on boosting the leadership and managerial quality of UK businesses, in particular smaller firms, to increase overall productivity and drive up the demand for skills across the economy.”

Hayman also reflected on the role of employers in this process: “Employers have a key role to play. HR and L&D teams are pivotal in fostering a culture of continuous learning and development within organisations. However, the 26 per cent decline in employer investment in training since 2005 shows that many businesses need to reprioritise learning and development as a strategic imperative.”

Addressing the skills divide, as Hayman pointed out, is not just about regional fairness – it is essential for the “long-term prosperity of the UK economy”.

To learn more about upskilling, read the CIPD’s Skills development in the UK workplace factsheet