so often that businesses can’t get used to
them,’ says Marshall. His rule of thumb
is that it takes a year for companies to learn
what a new initiative means, ve years to
engage with it and 10 years to feel con dent
about implementing it.Yet consistency has
been an issue: City & Guilds points out that
responsibility for skills and employment has
switched between government departments
10 times since the 1980s and there have been
13 major Acts of Parliament and more than
60 secretaries of state in this period.
It is not just apprentice numbers that
have been rising; general levels of education
have also gone up.Around 43% of the
population now goes into higher education,
compared with just 10% in the mid-1970s
2
.
Yet, while many businesses are complaining
of skills shortages, new graduates are nding
it di cult to nd appropriate jobs.
The Chartered Institute of Personnel and
Development estimates that more than 58%
of graduates were employed in jobs that did
not actually require a degree in 2010 – one of
the highest levels in Europe and a signi cant
increase since 2004.While it says that may
re ect earlier skills shortages, which is now
being recti ed by the greater availability
of graduates, it adds:‘There may be cost-
e ective ways (by both government and
individuals) of preparing many of our young
people for entry into the labour market.
Policymakers need to scrutinise the range of
courses o ered by the higher education sector
and seriously consider the social and private
returns to them.We believe that they will
conclude that, in many cases, public funds
could more usefully be deployed elsewhere
in the education and training system.’
However, despite an increase in
the number of both graduates and
10
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THE INVESTOR
C
onstruction workers,
engineers, healthcare sta ,
maths teachers – the list
of areas in which Britain is
su ering skills shortages is
long – and growing.The‘skills gap’, as it has
been dubbed, can be measured in a variety of
ways: the Confederation of British Industry
(CBI) says that more than half of businesses
are concerned they will not be able to recruit
enough people to ll their high-skilled jobs;
EngineeringUK says Britain is short of 55,000
engineers a year; and o cial statistics show
that the number of vacancies has risen 70%
since the 2009 low and stands at 735,000
across all sectors in the UK
1
.What everyone
agrees on, however, is that a lack of suitably
quali ed employees is already damaging
British business.
Adam Marshall, Executive Director of
Policy and External A airs at the British
Chambers of Commerce, calls it the‘number
one challenge’ facing the country and says
that, without urgent action,‘the challenge
of delivering future jobs, prosperity and
success could falter’. EngineeringUK says
that bridging the skills gap could generate an
additional £27 billion a year for the economy
from 2022, enough to build 1,800 schools or
110 hospitals. Katja Hall, Deputy Director-
General of the CBI, says:‘If we want jobs
and prosperity to keep on growing, we
cannot a ord to let the shortcomings of our
education and skills systems drag us down.’
The government is taking action. It plans
to create three million new apprenticeships
by 2020 and is consulting on the
implementation of an apprenticeship levy
on larger companies to pay for this, which
is planned to take e ect in 2017.That
would mark a 30% increase in the number
of apprenticeships created by the coalition
government.The government’s skills strategy,
announced at the start of the previous
parliament in 2010, made improving the
quality of apprenticeships a priority, as well as
boosting the standard of education in schools.
But there is still concern over whether
these initiatives will be enough to make
a signi cant di erence to skills levels.
‘Successive governments have announced
initiative after initiative and things change
Stocksy
apprenticeships, businesses still complain
about the calibre of sta available.The CBI’s
2014 education and skills survey found that
up to half of all businesses had concerns
about the literacy, numeracy or IT skills of
recruits, and that 40% of those surveyed had
provided remedial training in these areas for
some of their employees.‘Equipping young
people with the skills and attitudes to make
a smooth transition into the workplace, and
to continue learning in the years ahead, is an
essential response to the changing pattern
of demand for skills,’ the CBI’s report says.
‘Almost half of all employment is set to
be in managerial, professional or associate
professional roles by 2022.And the growth
in caring and personal service jobs calls for
di erent and better levels of skills – such as
communications skills – from those required
by many traditional jobs.’
Marshall identi es three key areas of
skills mismatch: in good basic skills of
employment – sta who show up on time
and with the right tools for the job; technical
skills, such as in construction and building;
and engineers and scientists. He believes that
solving the problem requires a four-pronged
approach: schools‘need to be measured
more on whether they are delivering
candidates who are employable’; colleges
need to focus on providing courses in areas
where skills are in short supply; universities
should concentrate on the areas where skills
are needed, particularly in the STEM –
science, technology, engineering and maths
– subjects, which he says is increasingly
happening; and the aim should be to boost
the quality of apprenticeships available.
‘There is a huge focus by the government
on the quantity of apprenticeships – that
is the wrong way round.We should be
concentrating on quality rst and, if we
get that right, the quantity will come
later,’ he says.
1 ONS,The UK Labour Market,Aug 2015
2 CIPD,Over Qualification and Skills,Aug 2015
The government
plans to create three
million new
apprenticeships
by 2020
Balance sheet
Although general levels of education
have gone up, businesses still complain of skills
shortages. Are we not equipping our young people with
the skills and attitudes necessary for employment?
ANALYSIS
SKILLS
