Survey casts doubt over effectiveness of apprenticeship levies
More than half of employers fear that skills shortages will undermine the UK’s economic growth, a survey from the CBI and Pearson has revealed.
Research with 310 firms, which employ more than one million people in total, found that 55 per cent of respondents fear that they will not be able to access enough workers with the skills they need.
On top of this, two thirds (68 per cent) of said that their need for people with a higher level skills is expected to grow in the years ahead. The survey showed that 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).
In addition to the increase in demand for higher level skills, the CBI has raised concerns that the government’s recently announced apprenticeship levy for larger employers will not deliver the high-quality, business-relevant training needed or do much to help small or medium sized businesses.
Although the CBI agreed that it may fund more apprenticeships which will help meet the government’s target of creating three million new apprenticeships. However, the CBI explained that of apprenticeships starts in 2013/14, just 2 per cent were higher apprenticeships, which lead to qualifications at a level equivalent to higher education.
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 most under pressure. “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. Levies on training already exist in the construction sector where two-thirds of employers are already reporting skills shortages.”
She added that while employers have a critical role in upskilling the workforce, they need “real business control of apprenticeships” to make sure the training meets 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.”
More than a third of respondents (38 per cent) said that better matching of qualifications to business needs would get more companies involved in apprenticeships, as would putting more purchasing power in the hands of firms (34 per cent).
Rod Bristow, president of Pearson’s UK business, said: “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.”