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In June 2008 Prime Minister Gordon Brown said that ‘In future it will no longer be the shortage of jobs but the shortage of skills that will be the biggest barrier to full employment’. His words echoed a government strategy based on the belief that the quality of the UK’s skills base would be the crucial determinant of the nation’s economic future. But the Leitch agenda [see report indexed at TD/IRD 88.157] and its assumption of growing employer demand for training looks less appropriate in the current climate which raises questions as to its appropriateness in the long term. This report by [the Learning and Skills Network’s] LSN’s think tank, the Centre for Innovation in Learning, examines the impact of the recession on training and skills needs and considered the likely future implications for skills policy. It analyses how the skills system has coped with the changing needs and pressures brought about by the recession, what lessons can be learned and whether the system can be more flexible and effective in driving the economic upturn.