Business

Skills emergency could ‘starve growth' major survey finds

There are fears the UK could be suffer from a major skills shortage

MORE than half of firms fear they will be held back due to skills shortages, according to a new survey.

The demand for higher-level skills in industry is set to grow in the years ahead, with sectors central to future growth, including manufacturing and construction, particularly hard-pressed.

That's according to this year's CBI/Pearson Education and Skills survey published today.

The survey of 310 companies, which together employ over one million people across the UK underlines the skills challenge facing the economy.

It found two in three companies (68 per cent) expect their need for staff with higher level skills to grow in the years ahead, but more than half of those surveyed (55 per cent) fear that they will not be able to access enough workers with the required skills

Demand for highly skilled workers is particularly strong in sectors critical to the rebalancing of the economy – engineering, science and hi-tech (74 per cent), construction (73 per cent) and manufacturing (69 per cent).

Katja Hall, CBI deputy director-general, said: “The government has set out its stall to create a high-skilled economy, but firms are facing a skills emergency now, threatening to starve economic growth. Worryingly, it's those high-growth, high-value sectors with the most potential which are the ones under most pressure. That includes construction, manufacturing, science, engineering and technology.

“The new (apprenticeship) levy announced in the budget may guarantee funding for more apprenticeships, but it's unlikely to equate to higher quality or deliver the skills that industry needs. Levies on training already exist in the construction sector where two-thirds of employers are already reporting skills shortages.

“Employers have a critical role in upskilling the workforce, but part of the deal must be for real business control of apprenticeships to meet their needs on the ground.

“The best way to plug the skills gaps and provide quality training is to speed up existing apprenticeships reforms already underway and encourage smaller firms to get involved.”

Around two-thirds (66 per cent) of respondents are involved in apprenticeship programmes, with provision spreading well beyond traditional sectors like manufacturing (76 per cent) to new sectors such as professional services (42 per cent), such as accounting and legal services .

Recent government reforms have been welcomed by business (81 per cent) but concerns include bureaucracy and red tape (29 per cent) and delays in funding reform (25 per cent) .

Rod Bristow, President of Pearson's UK business added: “Better skills are not only the lifeblood of the UK economy – as fundamental to British business as improving our infrastructure, technology and transport links – they are also critical to improving young people's life chances, of enabling them to be a success in life and work.

“The government is right to be ambitious about apprenticeships. We need more higher-level apprenticeships in high growth sectors like biotech, engineering, and technology, as well as traditional ones.

“But our further education sector, which provides the Higher National Diploma courses that deliver these technical skills, sits on the edge of a funding precipice and may suffer damage for years to come. Proper funding of further education would provide a huge boost to British businesses and productivity. Without improving the supply of skills, the UK will find it hard to remain competitive in the global economy.”

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