The Chancellor began his address in the House of Commons by championing the burgeoning health of the UK labour market, illustrated primarily by record levels of employment. Measures such as the continuation of the Annual Investment Allowance for SMEs, reductions in corporation tax and business rates and the doubling of UKTI funding to strengthen UK exports will be warmly received by businesses, as will further positive commitments taken to create new employment opportunities, abolish National Insurance for employing apprentices and commit significant investment to large-scale infrastructure projects.
However, the reaction amongst recruiters and youth employment groups has been mixed, with widespread concern over our education system’s ability to produce appropriately skilled workers to fill the jobs that Mr. Osbourne has committed to continue creating.
Michael Mercieca, CEO of Young Enterprise, the UK’s largest business and enterprise education charity, welcomed the rise in apprenticeships and their wages but feels that there should have been greater concern towards improving employment through education.
“We can see from this morning’s labour statistics that youth unemployment is still at triple the headline rate,” said Mercieca. “Delivering financial and enterprise education to primary school children and making it a statutory part of the curriculum will increase financial literacy and financial inclusion. It is imperative that we invest in our young people in order to improve young people’s life chances and strengthen their communities and the UK’s economy.”
Chris Jones, Chief Executive of City & Guilds, echoed this sentiment, stating that ‘creating jobs is one thing, filling them is another’ and raising concerns over whether there were enough people with the right skills to do so.
“The Government has already invested significantly into apprenticeships, and that’s great. But they are only part of the solution. We need to go further to bridge the gap between education and employment.”
Jones went on to bemoan the poor standard of careers advice given to young people, claiming that it needed to be ‘brought into the 21st century’ using market data on where skills gaps exist to determine the information young people receive on how to maximise their chances for employment. “Unless we do more to help young people develop the right workplace skills,” he claimed, “vacancies will remain unfilled and skills gaps will deepen.”
Tom Hadley, director of policy and professional services at the Recruitment and Employment Federation and chair of the Symposium Innovation in Recruitment Summit last year, admitted to serious misgivings within the recruitment profession about the lack of appropriately skilled young people to fill vacancies.
“Given the current skill shortages in the UK, we’re concerned that it may be difficult for the infrastructure initiatives and investments to succeed. Recruiters are already struggling to find suitably skilled candidates in key industries like IT, science, engineering and construction and it is in these sectors where we will need even more people now investment has been confirmed.”
With May’s election already looming large on the political horizon, Hadley insisted that there was a real need for reform. “The next government must co-ordinate industrial, regional and educational policies to meet these needs by bringing together the relevant parts of BIS, DWP and DfE, potentially under a new government structure.”
According to this advice, it appears that education policy should be a key factor in where businesses wish to see the majority come election time in May. Mr. Osbourne’s claim that the UK had the potential to become Europe’s largest economy within fifteen years surely depends on closing the skills gap.