Leadership Briefing: 12 October 2026
What this week’s policy thinking means for leaders
This week’s reports point to a shared challenge for leaders. It means turning ambition into capability. Skills England warns that persistent shortages, declining investment in training and rapid technological change are making reskilling an urgent business priority. Re:State’s analysis of Whitehall reaches a parallel conclusion on AI. New technology will not deliver transformation unless the systems around it, including funding, procurement, accountability, talent and culture, are also redesigned.
Reports and publications worth exploring
Skills England warns that reskilling must become a priority
Skills England’s 2026 Annual Skills Report identifies five major challenges for the skills system, including persistent skills shortages, declining employer investment in training, the impact of AI, youth employability, and the need to make skills provision more responsive to economic demand. More than a quarter of job vacancies remain difficult to fill because of skills shortages. Across ten priority sectors, employment in key occupations is projected to grow by around 1.8 million jobs by 2035, an increase of almost 24%. The report warns that education and training pipelines alone will not meet this demand, making investment in reskilling the existing workforce essential.
The report also highlights a long-term decline in employer investment in skills. Training expenditure in England fell from £49.4 billion in 2019 to £44.8 billion in 2024, in 2024 prices. Skills England is calling for stronger employer involvement, more flexible and modular training, and clearer pathways into skilled work. It also emphasises transferable capabilities such as communication, problem-solving, digital literacy and adaptability, alongside technical skills. For leaders, the message is that workforce development needs to be closely linked to business strategy and organisations will need to recruit, develop and retrain people continuously if they are to keep pace with technological change and secure the skills needed for growth.
Read more here.
Government needs to change how it works to realise AI’s potential
In The Scaling State: Rewiring Whitehall for the AI Age, Re:State argues that the Government’s challenge is no longer a lack of digital strategies, but an inability to turn ambition into results at scale. Existing systems for funding, procurement, accountability and ownership were not designed for an era in which software can be developed and deployed rapidly and AI can fundamentally change how work is organised. The 2025 State of Digital Government Review found that only one in five respondents felt the current funding model enabled effective investment in and running of digital services.
The report sets out 20 proposals, including changes to technology oversight, funding, procurement, AI testing and talent, to help government move beyond isolated pilots towards sustained, system-wide improvement. Although focused on Whitehall, the lessons apply more widely to organisations seeking to realise the benefits of AI. Technology alone will not deliver transformation because leaders also need to examine the systems, decision-making, skills and culture that determine whether new approaches can be embedded and scaled.
Read more here.
Leadership takeaways
The priority for leaders is to make reskilling an integral part of business strategy, connecting workforce development to growth ambitions, technology adoption, and the capabilities organisations will need in the future. This also means looking beyond the technology itself to the systems that enable change, reviewing funding, governance, procurement, decision-making, and accountability so that promising AI initiatives can move beyond isolated pilots. Ultimately, success depends on building adaptable organisations where people, processes, culture, and technology work together, enabling new skills and approaches to be embedded, sustained, and scaled.
