Employers warn of 'skills emergency'

More than half of employers fear they will not be able to recruit enough high-skilled workers, according to a survey by the CBI.

The employers' organisation is warning that a skills shortage is "threatening to starve economic growth".

"Firms are facing a skills emergency now," said CBI deputy director-general Katja Hall.

In the Budget, the government announced a levy on large employers to fund new apprenticeships.

"By developing the skills of young people, businesses can boost their productivity, employees can harness their talent and we can reach our potential as world beaters," said Skills Minister Nick Boles of the plans for a training levy.

The annual CBI/ Pearson Education and Skills survey, based on 310 firms employing 1.2 million people in the UK, showed that more than two-thirds of businesses are expected to need more high-skilled staff.

But more than half feared they would not be able to find enough staff with the required skills.

"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 Ms 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."

The survey also highlighted concerns about the need for better careers advice to help young people understand more about the jobs likely to be available.

More than three-quarters of firms are not satisfied with the careers advice for pupils in school, according to the survey.

"How can young people decide what type of work they want to do in the future - when the careers advice they receive is simply not up to scratch?", said CBI director-general John Cridland.

Mr Cridland recently set out a series of proposals for how employers would like to change the education system in England.

It included scrapping GCSEs and putting more emphasis on vocational skills at A-level.

The annual survey found almost a third of employers had arranged remedial classes to help recruits with basic skills.

More than a third of employers had found problems with the literacy and numeracy skills of school leavers. Almost half had concerns about a lack of communication skills.

There was also a demand from industry for better language skills.

Rod Bristow, UK president of education firm Pearson, said the survey showed that firms were struggling to find enough staff with the necessary science, technology, engineering and maths skills.

"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."

Mr Bristow said the further education sector was a vital part of teaching technical skills, but it "sits on the edge of a funding precipice".

Last week's Budget set out the government's plan to create a further three million apprenticeships.

There would be "an apprenticeship levy on all large firms", Chancellor George Osborne announced.

"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," said Mr Osborne.

A BIS spokesperson said: "The apprenticeship levy puts employers back in the driving seat; they are now in charge of how apprenticeship budgets are spent and they can build the skills base they need for their future success.

"Investing in apprenticeships means young people will have the skills they need, giving them the very best chance to succeed in today's labour market."

Labour's shadow skills minister Liam Byrne said: "This is a stark warning from British business about the government's plans for skills.

"Once again the Tories have opted to merely pay lip service to our growing skills crisis rather than focus on what business needs - high quality and specific skills provision to drive our knowledge economy."