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This report examines the skills shortage in the UK and the role of the further education (FE) sector in helping to improve the skills of adults and young people, thus helping to improve the productivity of the UK workforce and organisations. The authors explain why the 'crisis-ridden, low profile sector on the periphery of our political and economic thinking' is so important to the UK's productivity and social inclusion. They look at the reasons why it is underperforming and what needs to be done so that FE is able to realise its potential. They argue that FE has the ability to link up learning, the workplace, individuals and communities, in ways that schools and universities cannot. It is suggested that FE does everything that schools and universities do not do or have failed to do and quite a lot else besides. However, FE is treated as the 'dustbin of educational policy' because of the attitude that academic is best and vocational education is for those who 'can’t cut it'. The authors describe what 'a respected and successful FE system' would look like, and conclude that the government has little choice but to improve FE as a matter of 'social and economic urgency'.