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Apprenticeship levy won’t deliver high level skilled people in demand says industry

The demand for higher-level skills in British industry is set to grow in the years ahead, with sectors central to future growth, including construction and manufacturing, particularly hard-pressed. But levies in the Budget are unlikely to fill the gap.

That’s according to this year’s CBI/Pearson Education and Skills survey Inspiring Growth.

More than half of firms fear growth will be held back by skills shortages and say that levies announced in the Budget are unlikely to deliver more high quality apprenticeships.

“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" - Katja Hall, CBI

The survey of 310 companies, which together employ over one million people, underlines the skills challenge facing the UK. It revealed:

  • 2 in 3 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%).

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 3M, it will not deliver the high-quality, business-relevant training needed, and do little to help small or medium sized businesses.

Of apprenticeships starts in 2013/14, just 2% were higher apprenticeships, which lead to qualifications at a level equivalent to higher education.

“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,” said CBI deputy director general Katja Hall. “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. Levies on training already exist in the construction sector where two-thirds of employers are already reporting skills shortages.

“Employers have a critical role in upskilling the workforce, but part of the deal must be for real business control of apprenticeships to meet 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.”

If you would like to contact Jackie Whitelaw about this, or any other story, please email jackie.whitelaw@infrastructure-intelligence.com.