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CBI/Pearson survey warns skills shortage will ‘starve growth’

The employers’ organisation, CBI, is warning that more than half of employers fear growth in the British economy will be held back by skills shortages. Construction and manufacturing are said to be most hard-pressed, but the problem is across all sectors.

The 2015 CBI/Pearson Education and Skills survey questioned more than 310 companies, which together employ over one million people. Among the key findings of the survey:

* Two in three businesses (68%) expect their need for staff with higher level skills to grow in the years ahead, but more than half of those surveyed (55%) 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%), construction (73%) and manufacturing (69%).

Katja Hall, CBI Deputy Director-General, says: “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.”

Furthermore, with an apprenticeship levy for larger employers set to be introduced following the Budget, the CBI is concerned that while it may fund more apprenticeships to meet the Government’s target of three million, it will not deliver the high-quality, business-relevant training needed.

“The new 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,” Hall continues.

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

The survey did reveal a growth in apprenticeship opportunities as provision spreads beyond traditional sectors such as manufacturing into professional services with more respondents either starting new apprenticeships or expanding their existing programmes. However, bureaucracy, red tape and delays in funding reforms are all concerns.

Rod Bristow, President of Pearson’s UK business, says: “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.”

A pdf of the full CBI/Pearson report may be downloaded from the CBI website: