Businesses face mounting economic uncertainty in light of the UK's fluid political situation, and as we head into 2020 with a new government in place, it is vitally important to outline what measures will enable this region to prosper now and into the future. In coming weeks, Business West will set out 5 key priorities to help improve the lot of businesses of all sizes to reignite the country’s stagnating economy, and the first of these priorities in focus is people.
People are the most important part of any business. Businesses need access to people - when and where they need them, with the right skills, qualifications and competencies, yet this is rarely the case. While the share of the UK's workforce currently in employment is very high by historic standards - this has left businesses with a shrinking pool of available skills. Now is the opportunity for government to act.
Where are we now?
In the West of England, skills shortages are one of the most frequently reported barriers to business growth according to the West of England Local Enterprise Partnership. Indeed, a series of Business West surveys between 2017-19 showed that approximately 50% of businesses who tried to recruit during the period found it difficult to fill vacancies and 68.5% blamed a low number of applicants with the required skills and qualifications.
The recruitment issues experienced by businesses in the West of England are likely to be compounded by Brexit. A recent report by IPPR and Business West found that the government’s proposals for ending freedom of movement after Brexit put Bristol and the West of England economy at risk, given that up to 75 percent of economic migrants currently in the region would not have been allowed to settle here. Skills and salary thresholds proposed in the 2018 immigration white paper would severely limit future inward migration and hamper growth in crucial parts of the local economy.
In Swindon & Wiltshire, a 2019 survey of small and medium sized businesses by CMD Recruitment showed that 74% faced recruitment difficulties, whereas 71% of larger businesses (500+ employees) also faced difficulties recruiting.
Gloucestershire’s main skills challenge concerns its demographics. On average, Bristol attracts 4,000 young people every year, while Gloucestershire loses 400. Hence, an ever shrinking labour pool makes it increasingly difficult for employers to recruit and retain top talent.
Where do we need to be?
• Incentivising and supporting employers to provide access to high-quality, job-related training - at all skill levels.
• Achieving parity of esteem and funding for technical, vocational and academic routes to employment.
• Recruiting and retaining migrant workers - at all skills levels - via a simple, fast, flexible and affordable immigration system from 2021.
• Leveraging flexibility, diversity and inclusivity as a means to productivity, innovation and access in the workplace.
Businesses need a simple, stable and coherent skills system that encourages them to invest in training.
If the UK’s labour force was as productive as other G7 countries, our economy would be £338 billion bigger than it is today. Undoubtedly, realising this potential would be transformational for communities right across the UK.
How do we get there?
Priority actions for the next UK government in order to deliver the above:
• Increase funding for apprenticeships to ensure SMEs can access training, at all skill levels, in their local area.
• Ensure businesses have access to relevant apprenticeship qualifications and reform the Apprenticeship Levy in England to allow businesses to use all forms of accredited training.
• Raise the base rate of funding for further education among 16 to 18 year olds in England, commit long-term funding for T Levels and increase flexibility and financial support for businesses delivering high-quality T Level work placements.
• Increase the budget for adult education in England to fully fund economically valuable entry-level courses.
• Set out a long-term strategy and funding for lifelong learning, enabling people to upskill, retrain and adapt to technological changes in the workplace.
• Deliver career advice services for all ages and incentivise schools to promote vocational and technical routes.
• Reform and simplify family policies to reduce complexity and help businesses manage the costs, without compromising the support provided.
• Help bridge the gap between parental leave and children starting school by simplifying access to childcare funding and providing a flexible and universal childcare entitlement.
• Fund workplace adaptations to help employers retain and support employees experiencing ill health.
• Fund the upskilling and reskilling of employees impacted by changes to supply chains.
• Ensure the education and skills system prepares people for work in a net-zero emissions economy.
• Ensure clarity and transparency on skills devolution and future access to the UK Shared Prosperity Fund.
• Allow greater flexibility for communities to focus skills and training funding on local needs.
• Introduce a simple and flexible new immigration system that minimises the administrative burden on businesses and allows access to all skill levels – including temporary, seasonal and permanent roles – with recognition of professional qualifications.
• Increase funding for apprenticeships to ensure SMEs can access training, at all skill levels, in their local area and reform the Apprenticeship Levy in England to allow businesses to use all forms of accredited training.