Defunding management skills is the Achilles heel of the UK’s productivity and AI ambitions

Responding to the keynote speech by CBI Chair Cressida Hogg at the Cumbria Business Dinner, the Chartered Management Institute (CMI) has warned that the government’s current trajectory on the Growth and Skills Levy risks further disengagement from employers by stripping away support for vital management and leadership training.

Petra Wilton, Director of Policy at the CMI, said:

Cressida Hogg is right to warn that the system is failing both businesses and young people. But there is a missing piece of the puzzle - you cannot fix a broken skills system by defunding the very people responsible for fixing it - our managers.

“We are seeing a worrying trend of employers disengaging from the Levy because it has become too restrictive. By defunding management skills, the government is removing the 'engine room' of business growth. Without skilled managers, we cannot effectively mentor NEETs into the workforce, nor can we hope to navigate the AI revolution.

The AI Leadership Gap

While the CBI highlights the fall in entry-level professional roles due to AI, CMI research underscores that the barrier to AI adoption isn't just technical, it's managerial. CMI’s new Leadership for AI qualifications were launched specifically to address the reality that productivity gains from AI are only realised when leaders know how to integrate these tools into human workflows.

“AI won’t manage itself,” said Petra Wilton. “Our research shows that a lack of management capability is the primary reason why UK firms lag in tech adoption. If we want to move the needle on productivity, the Levy must support the transition to AI-enabled leadership.”

Supporting NEETs Requires Management

Addressing the "stark paradox" of nearly one million NEETs alongside rising skills gaps, CMI argues that the solution requires more than just entry-level funding.

“Investing in young people and investing in the existing workforce is not a zero-sum game,” said Wilton. “To give a young person their ‘first chance,’ you need a skilled manager capable of coaching and developing them. If the Levy doesn't support the manager, the door of opportunity for the NEET remains locked.”

CMI is calling on the government to:

• Review funding priorities for management apprenticeship units to ensure businesses have the leadership required to drive growth and to support team leaders who can in turn support young people into the workforce.
• Recognise management and leadership skills as key drivers of productivity and growth and develop new incentives to encourage employer investment.
• Embed management and leadership skills essential for the safe and productive rollout of AI across the UK economy in the national skills strategy.