Employers are not investing less in training because they have stopped caring, they are investing less because too much of it never changed anything. On 1 June 2026, Skills England published its first Annual Skills Report, produced with the Department for Education. One figure in it should stop every head of learning in the country. Drawing on the 2024 Employer Skills Survey, the report records that employer investment in training has fallen by £10.6 billion since 2011, from £55.4 billion to £44.8 billion. That decline is nearly as large as the government’s entire skills budget. It did not happen by accident.
The standard reading is that this is a funding problem, that employers are squeezed and training is the first line to be cut. That is part of it. But sit in enough budget meetings and a second reason becomes obvious. Finance directors are not cutting training they can see working. They are cutting training they cannot. When the only evidence a programme produces is an attendance list and a sheet of happy-sheet scores, the line is indefensible the moment margins tighten. The cut is not irrational. It is a verdict.
Why Most Training Does Not Survive Contact With A CFO
The reason so much training is easy to cut is that almost none of it is measured at the level that matters. The Kirkpatrick model, the standard framework for evaluating training since the 1950s and reaffirmed by Kirkpatrick and Kirkpatrick in 2016, sets out four levels. Level 1 is reaction, did people enjoy it. Level 2 is learning, did they know more on the way out. Level 3 is behaviour, are they doing the job differently a month later. Level 4 is results, did the business outcome move.
The trouble is that the overwhelming majority of corporate learning stops at Level 1. A score out of ten, collected in the room while the biscuits are still out. It tells you whether the session was pleasant. It tells you nothing about whether a single manager held a conversation differently the following Tuesday. So when the finance director asks the only question that counts, "what changed because we spent this", the honest answer is that nobody measured it. And spend that cannot be defended is spend that gets withdrawn. The £10.6 billion did not vanish from the categories that proved themselves. It vanished from the categories that never did.
The Behaviour Problem Underneath The Budget Problem
There is a deeper issue than measurement, and it is the reason satisfaction scores stay high while behaviour stays flat. People are poor judges of their own competence. In Sidestream’s own academic behaviour-change work, building on research from UCL, Cambridge and Bocconi, participants consistently rated their own communication skill well above what trained observers later measured. The confidence was real. The skill was not yet there. A happy sheet captures the confidence and misses the gap entirely, which is precisely how a programme can score nine out of ten and change nothing.
This is not a failure of effort, it is a failure of method. Roediger and Karpicke showed in Psychological Science in 2006 that being tested on material lifts long-term retention by roughly 50% compared with re-reading it. A keynote and a slide deck are the re-reading kind of learning. They feel productive in the room and fade within weeks. The behaviours an organisation actually needs, a manager naming a difficult issue early, a leader staying in an uncomfortable silence rather than filling it, do not arrive through being told about them. They arrive through rehearsal, with feedback, against a standard.
What We Measure Instead
Because real behaviour change happens through lived experience that makes the memory stick, we build for Level 3 from the first conversation. In a Sidestream programme the central method is not a presentation, it is a rehearsal. A small group, one or two professional actors playing the people the work is actually hard with, a sceptical finance director, a defensive team lead, a colleague raising something awkward. The conversation is run, replayed, and run again against named behavioural anchors, so the change is observed rather than self-reported. We replace the happy sheet with a record of what people did, before and after.
That is the difference between our immersive approach and conventional e-learning. An e-learning module can prove that someone clicked to the end. It cannot prove they behave differently under pressure. A simulation that puts a manager in the actual conversation, watched and coached, produces exactly the evidence the £10.6 billion was cut for lacking. When the next budget round comes and the finance director asks what changed, the answer is a behavioural baseline and a follow-up measure, not a satisfaction average.
This is also why the cut, painful as it is, is a kind of opportunity. The training that disappears in a downturn is the training that was never going to move behaviour anyway. What survives, and deserves to, is the training that can show its work at Level 3. Skills England’s report is a national-scale signal of a verdict that individual CFOs have been reaching quietly for years. The organisations that respond by measuring observed behaviour rather than reported satisfaction will keep their budgets. The ones that respond by defending the happy sheet will keep losing them.
What We Do About It
Our immersive simulations and leadership workshops are built for the programmes that have to justify themselves, because every programme now has to. If your learning budget is under the same pressure Skills England has just put a number on, the question to start with is not how to spend less, it is how to prove what the spend changes.
£10.6 billion of training spend has gone since 2011. Almost none of it was measured at the level that proves behaviour changed. Measure Kirkpatrick Level 3, or watch the budget follow the rest.
The heads of learning who hold their budgets through the next squeeze will not be the ones with the slickest content library. They will be the ones who can show, in observed behaviour, that the spend did something. Book a call to look at what measuring at that level would mean for your programmes.
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Source: Skills England, Annual Skills Report 2026, published 1 June 2026 with the Department for Education. Training-spend figures drawn from the 2024 Employer Skills Survey. Get in touch today. We are Sidestream.