Britain’s education system is testing the wrong skills
Janet Garcia joins Michael Gove on the Future of Education and Skills panel at Labour Party Conference 2026
Janet Garcia, CEO
| PSI Services
With youth unemployment rising and employers struggling to find the skills they need, Janet Garcia argues that assessment must evolve beyond academic attainment and start measuring the capabilities people need to thrive in a changing labour market
As we await publication of the Milburn Review, the debate around youth employment, skills shortages and the changing nature of work is intensifying. For those of us involved in qualifications and assessment, this should prompt a difficult question: are we still testing the things that matter most to a modern economy?
At Labour Party Conference, I joined Michael Gove, one of the architects of the modern English education system, for a panel discussion on the future of education and skills. The discussion brought home a problem that is increasingly difficult to ignore. Young people are accumulating impressive qualifications, often with debt to match, while employers continue to report skills shortages.
I see that tension professionally, but also personally. My son has a first-class degree in chemistry, three A*s at A-level and industry work experience, yet he and so many of his high achieving friends are currently not in education, employment or training. I am incredibly proud of how hard he has worked and his attitude and commitment towards starting his career, but it is a brutal environment. Like many parents across the country, I am seeing first hand that academic achievement does not always lead directly to opportunity.
His experience is a reminder that the path from education into employment has become less predictable. We need to ask whether our approach to education and assessment is keeping pace with what the labour market actually requires.
The evidence points to a wider disconnect. One reported estimate suggests that graduate job vacancies have fallen by almost half in the past year, even as university applications remain high. A DWP-commissioned survey also found that 76 per cent of employers believe the current curriculum does not adequately prepare young people for work.
We are measuring knowledge when employers increasingly need capability
As the CEO of global assessment provider PSI, I see how much weight our education system places on academic results: grades, exam scores, and league tables. Knowledge remains essential, but being able to apply what was learnt is critical. Employers increasingly value judgement and the confidence to use new technologies responsibly.
That distinction matters even more as AI reshapes the workplace, and the implication for assessment is direct. If judgement is the skill that matters, then testing what people can recall is no longer enough on its own. Assessments need to test how people reason with what they know, through scenario-based tasks, simulations and situational judgement, under conditions that resemble real work.
Adapting testing to an AI world
Education and assessment therefore need to reflect the skills young people will use at work. This means continued investment in vocational pathways, alongside a more realistic approach to the role of AI in learning and employment.
Using AI effectively and responsibly is becoming an important workplace capability. Yet only 48 per cent of higher education students say they are being helped to develop the AI skills they will need for their future careers. Many schools and universities have yet to work out how to assess appropriate AI use consistently, and some approaches still treat any use of AI as misconduct rather than distinguishing between responsible application and misuse.
At PSI, we are working to help assessment evolve with these demands, including exploring how AI-enabled tasks can assess applied capabilities. The way competencies are defined should reflect what is required to perform the work people actually do, while giving employers confidence that qualifications signal the knowledge, skills, and abilities candidates need.
Assessment providers can be part of the solution. Working with educators and employers, we can assess the combination of knowledge, practical skills and judgement required across different industries, while designing fair and accessible ways for candidates to demonstrate what they can do. That includes evaluating how someone works with AI and exercises critical thinking, rather than assuming that using a tool undermines the assessment.
The challenge does not end when someone enters the workforce. Only around one in ten UK businesses has given AI training to even half its staff. Working with government and industry, we can also support assessments that identify emerging skills gaps and help people access the training they need as technologies change. Otherwise, we risk leaving experienced workers behind as the demands of their jobs evolve.
Assessment providers cannot resolve the skills gap alone. But we can help policymakers, educators and employers agree which capabilities matter, build them into learning and assessment, and make opportunities for reskilling more accessible throughout working life. If education is to support growth and opportunity, success must mean more than what someone knows on the day of an exam. It must also mean what they are equipped to do next.
