Kate Nicholl MLA: ‘Skills are the engine room of our economy’

Writing in agendaNi, chair of the All-Party Group for Skills, Kate Nicholl MLA, discusses how to close the skills gap which she believes is holding back Northern Ireland’s economy.

The opportunities for Northern Ireland are enormous. We have talented people, excellent universities, brilliant further education colleges, and innovative businesses. We have the potential to lead in areas ranging from advanced manufacturing and cyber security to green technologies and artificial intelligence.

Opportunities do not become outcomes by accident. Skills are not a nice-to-have. They are the engine room of our economy. If we want higher productivity, better jobs, and rising living standards, we must stop treating skills as an afterthought and start treating them as a national priority.

Yet despite a mass of evidence over many years, the issue still is not getting the attention it deserves.

The OECD’s review of Northern Ireland’s skills system highlighted longstanding weaknesses around adult learning, skills imbalances, and the need for better coordination across government.

The Department for the Economy’s own Skills Strategy later identified what it described as a “low skills equilibrium” whereby low qualifications, low productivity, low wages, and limited progression reinforce one another. More recently, the Northern Ireland Audit Office warned that skills shortages continue to constrain economic growth and that progress against key skills objectives has been limited. A staggering one in four local job vacancies are down to our skills shortage.

None of this should come as a surprise. We have known for years that our skills profile is not where it needs to be.

Too many people still have low or no qualifications. Our skill levels remain lower than neighbouring jurisdictions and many of our international competitors. Too many young people complete education without the security of a good job or find themselves in work that does not fully utilise their skills and potential. Workers here receive less training during employment than many of our neighbours. At the same time, employers across multiple sectors tell us they cannot find the skills they need to grow.

The result is an economy that is not reaching its potential. We continue to grapple with low productivity, relatively low wages, and high levels of economic inactivity. Skills are not the only reason for that, but they are undoubtedly one of the most important factors.

I think we need to move beyond a narrow debate about qualifications and think more about balancing the entire skills ladder. Yes, we need more higher-level skills; more people equipped for careers in digital, engineering, advanced manufacturing, life sciences, artificial intelligence, and the green economy, but we also need stronger foundations. We need greater investment in essential skills, vocational pathways, apprenticeships, community learning, further education, and lifelong learning. The skills system is only as strong as its weakest rung. Alan Milburn’s conclusion – that so many young people find themselves Not in Education, Employment or Training (NEET) because of a lack of apprenticeship opportunities and other entries into work – is very relevant to this conversation and should concern us all.

Unfortunately, at a moment when reskilling and upskilling have never been more important, recent funding decisions have sent the opposite message. Two months ago, announcements relating to reductions in skills, reskilling, and upskilling funding caused genuine shock across the sector. Training providers, colleges, employers, and community organisations rightly expressed concern about what it would mean for learners and businesses.

Yet the reaction was not simply about the cuts themselves, it was about a pattern that many have witnessed for years.

Whenever difficult savings need to be found, skills budgets seem to find themselves in the firing line. Time and again, skills funding is treated as a convenient source of short-term savings even though the long-term costs are significant.

The reality is that many parts of the sector are now operating on fumes. Organisations that help people gain qualifications, return to work, switch careers or adapt to technological change are being asked to deliver more with fewer resources. That is not a sustainable model for growth.

The irony is that politicians across all parties agree that we need a larger economy, higher productivity, and better jobs. Yet we are often reluctant to invest in one of the most effective tools available to achieve exactly that.

Over recent years Alliance have consistently raised an issue that many in Northern Ireland agree on: that we need to be funded according to need. If we are serious about transforming our economy and addressing structural challenges which are unique to Northern Ireland, we require the resources to do so. At the same time, there is an increasingly important debate taking place around institutional reform. We should welcome that debate, because we also need to ask whether our current systems genuinely encourage economic growth and long-term investment.

As things stand, if a department succeeds in generating savings or revenue, those resources would find their way back to the Treasury. I made this point to the Prime Minister and Secretary of State in a meeting last month: there is no incentive for growth, creating a culture focused on annual budget management rather than long-term economic transformation.

Imagine instead a system where savings could be reinvested into skills, innovation, research, or economic development. Departments would have a much stronger incentive to think strategically. More importantly, the value of investing in skills would become impossible to ignore.

Funding alone is not the answer. We need a much more joined-up approach across government. Skills policy cannot be viewed just through one lens. It sits at the intersection of education, communities, employability, justice, productivity, and economic development.

If we are serious about tackling economic inactivity, supporting inclusion, and growing our economy, we need alignment between education policy, community programmes, and a clear economic strategy.

Equally importantly, we also need to listen more carefully to those delivering skills programmes on the ground. The people working in the sector understand the challenges better than anyone, yet too often they are brought into conversations after decisions have already been made.

As political parties begin developing their manifestos for the years ahead, my message is simple: ask what we are proposing on skills. Challenge us on it. Lobby us. Hold us to account.

If we are serious about economic growth, there is no meaningful conversation to be had without a serious conversation about skills. And right now, that is a conversation Northern Ireland can no longer afford to avoid.

Kate Nicholl has been an Alliance Party Assembly member for South Belfast since 2022. She is also the chair of the APG for Skills and, among others, the APG for AI.