‘Urgent action’ needed to tackle three major barriers to growth
Businesses need to act now to tackle “deep-rooted” employment challenges in the UK economy, the UK Commission for Employment and Skills (UKCES) has warned.
Despite improving conditions – the International Monetary Fund (IMF) expects the UK economy to grow 2.9 per cent in 2014 – persistent barriers to growth remain and are likely to restrain future development.
In its report, Climbing the ladder: skills for sustainable recovery, UKCES has identified three major barriers to growth.
A lack of opportunity for young people to gain the vital experience they need to move into the world of work is noted as a major cause for increasing youth unemployment figures.
“The UK stands out among European economies for its combination of relatively low unemployment with relatively high youth unemployment,” the report states, highlighting a disconnect between education and business.
It calls for employers to offer more “quality work experience” that is integrated into study programmes, and to provide clearly defined career pathways for new entrants.
The number of apprenticeships has increased under the coalition government, however, more needs to be done to create additional vocational routes into employment, the UKCES said.
“The UK has created a greater supply of higher skills through graduates, and the expansion of higher education, and alternative vocational routes combining study and work are under-utilised,” the report said.
For those employees already in work, the opportunities to progress are limited, and “our current skills system develops high skills only to see them increasingly underemployed in the wrong places,” it said.
Earlier this week, David Sparks, incoming chair of the Local Government Association echoed this sentiment, describing the current employment and skills system as “not fit for purpose”.
Experts suggest that up-skilling and developing the UK workforce could be the key to competing on a global scale.
“The UK’s economy is growing well, but even so we still have a way to go before we can demonstrate this growth is robust and sustainable,” Michael Davis, chief executive of UKCES said.
“There’s a welcome recognition that this includes developing and using the skills of the workforce to power innovation, creativity and competitiveness.”
The commission warned that if businesses and the government don’t join together now to tackle these problems the future UK labour market is likely to be plagued by an acute skills shortage, stumbling productivity and declining opportunities.
A follow-up report is expected in the autumn, outlining ways in which these challenges could be tackled.
“The UK has made very significant progress in tackling skills challenges, particularly around apprenticeships. But we must go further,” said Douglas McCormick, UKCES commissioner.
“By acting now to tackle these problems in a collaborative way we can ensure workers and employees alike reap the benefits of economic upturn swiftly - making certain that today’s underlying issues do not become tomorrow’s insurmountable challenges,” he added.