Skills England’s digital jobs forecast comes with an AI warning

Skills England published its first Annual Skills Report on 1 June 2026, alongside 10 sector skills needs assessments. The one for digital and technologies carries the biggest number for tech employers: the sector’s 30 priority occupations are projected to grow by 239,000 jobs, or 27%, between 2025 and 2035. Add an estimated 249,000 workers who will leave those roles and need replacing, and total demand reaches around 488,000.

The same document then hedges that number. Skills England says it did not adjust the projections for AI adoption because the evidence is “not currently strong”, and it warns of a “heightened risk that projections of AI-exposed occupations including digital occupations are too high”. An alternative scenario supplied by the Department for Science, Innovation and Technology (DSIT) puts growth at about 93,000 to 94,000 jobs, or 11%.

For people leaders at smaller UK tech employers, the question is less whether the shortage is real than which roles it will hit, and whether a training system that smaller firms say is too complex to use can supply them.

The forecast comes with a caveat

Demand is already tight. According to the digital and technologies assessment, 68% of the sector’s priority occupations are in critical or elevated demand across the economy, and a quarter (25%) are in critical demand. Most of the growth sits high on the qualifications ladder: 89% of the projected additional employment requires qualifications at level 4 and above, against 62% across all priority occupations in the 10 sectors.

Competition for those people comes from well outside the sector. Of the 30 priority occupations, 25 are shared with at least one other sector. Programmers and software development professionals were picked as a priority by seven sectors, and IT business analysts, architects and systems designers by six. The sectors with the most overlap are life sciences, advanced manufacturing, defense and financial services. A mid-sized software house is, in other words, bidding for the same developers as banks and defense contractors.

Programmers are the single largest line in the forecast, with 69,000 additional workers needed in digital and technologies by 2035. They are also where the report is least sure of itself. Skills England notes that growth in the occupation “may be distinctly affected by the increasing use of AI”, but that “evidence for changes in employment level is currently weak”. It plans further work over the next year to understand the risk.

The junior role is changing shape

The assessment describes a sector that is already moving work around. Code generation is now mainstream, it says, and agentic systems increasingly review, merge and deploy code, which makes human checking and verification a core responsibility. Demand is shifting away from routine coding and testing toward oversight, assurance, judgment and communication, with AI literacy needed well beyond engineering teams as low-code automation spreads into HR, finance and operations.

Employer surveys point the same way. The 2025 Digital Leadership Report, talent and technology firm Nash Squared’s own survey with Harvey Nash of 924 UK technology leaders carried out between December 2024 and March 2025, found 52% reporting an AI skills shortage, up from 20% in the previous edition. And 61% of UK tech leaders said they would choose an AI-enabled software developer with two years’ experience over one with five years’ experience but no AI skills.

That is research from a firm that sells talent services, and it predates the Skills England analysis. But the direction it describes matches the government’s: less weight on writing routine code, more on checking what the tools produce. For a hiring manager, that changes what a junior developer is hired to do, and what an apprenticeship standard needs to teach.

Small employers are outside the system

The annual report is blunt about who is missing from training. Business investment in training has been declining over the long term, it says, and small and medium-sized enterprises report that the system is “overly complex and time-consuming to navigate”. They cite limited capacity and cost, and they struggle to commit to longer programs.

The report names a specific problem for employers with 10 to 50 staff: “limited promotion routes can make the link between investing in workforce skills, staff progression, and business performance less visible”. Combined with the fear that trained employees will move on, it says, that leaves smaller business owners less willing to invest in their people.

On AI skills in particular, the digital assessment finds “substantial disparities in access to training particularly among SMEs”. Phil Smith, chair of Skills England, put part of the onus back on employers in the launch release: “Employers – especially small and medium-sized businesses – also have a critical role to play in investing in apprenticeships, training and reskilling staff.”

Skills England says it will run a dedicated program of work to help SMEs invest in their own workforces, convene smaller firms to find where the system jams, and share and trial models in which several employers commission training together. Strategic authorities, growth hubs and chambers of commerce already work closely with smaller firms, it notes. It is also producing shorter courses, such as apprenticeship units, that employers will be able to access through the Growth and Skills Levy where it applies.

There is better news on supply. Achievements in digital technology apprenticeships at levels 4 and 5 rose 82% to 4,190 between 2021–22 and 2023–24, the fastest growth among the key routes Skills England tracks into the sector’s priority occupations. Higher education computing grew 40%, from a far larger base, to 50,280.

The apprenticeship numbers remain small. In the 2022–23 tax year, 1,040 leavers from level 4 and 5 digital apprenticeships entered priority occupations, against 7,230 from degree-level computing. But 59% of employed leavers from those apprenticeships went into priority roles, slightly ahead of computing graduates at 58%. For an employer that cannot outbid a bank for a graduate, an apprentice trained in-house on the work it actually does is a route the data supports.

Employers should hire for the new job

The forecast is a range, not a promise, and Skills England says so. Even the lower scenario has priority digital roles growing by more than 90,000 jobs over the decade, before replacing anyone who leaves. People leaders should plan for continued demand at level 4 and above, while expecting the content of junior roles to move toward reviewing, testing and taking responsibility for AI output.

That points to three practical steps. Write AI use and verification into job descriptions and apprenticeship plans now, rather than hiring for routine work the tools already do. Use the level 4 and 5 apprenticeship route, where completions are growing fastest and progression into priority roles matches the degree route. And for small firms, take Skills England at its word on shared commissioning: employers that group together through a chamber or growth hub are likely to be better placed than those that wait for the system to simplify itself.

The shortage in the forecast is real enough. The bigger risk for tech employers is hiring for the job as it was, not the one the forecast describes.