Apprenticeship levy will fail to close skills gap, CBI says

Two thirds of firms employing more than a million workers were worried that they will need staff with higher level skills in the coming years

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The Independent Online

Business leaders have warned that a government plan for an apprenticeship levy could lead to a major skills shortage in the UK because it would not create enough high-skilled workers in the key manufacturing and construction sectors.

The Confederation of British Industry (CBI) also said the levy would not improve the small businesses it is aimed at helping, to create three million apprenticeship positions across the country.

A survey conducted with the learning company Pearson of 310 firms employing more than a million workers found that two thirds were worried that they will need staff with higher level skills in the coming years. More than half said they were concerned they would struggle to recruit suitably skilled workers.

Katja Hall, the CBI’s deputy director general, said 74 per cent of engineering, science and hi-tech firms needed more highly skilled workers, followed by construction at 73 per cent and manufacturing at 69 per cent.

She added: “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 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.”

On the new apprenticeship levy, the Chancellor, George Osborne, said in the Budget: “While many firms do a brilliant job training their workforces; there are too many large companies who leave the training to others and take a free ride on the system.”

However, Ms Hall said: “Levies on training already exist in the construction sector, where two-thirds of employers are already reporting skills shortages.

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

Meanwhile, the number of senior City executives willing to up sticks and work abroad has dropped sharply in the last year after the threat of higher personal tax rates under a Labour government disappeared. The proportion who would now consider moving abroad for work has dropped from 83 per cent to 64 per cent, according to research by recruiters Astbury Marsden.