The skills and diversity of London’s people have always been key to its global success. But our capital’s ability to recruit the people it needs is one of the most pressing concerns for businesses today. Our report with Lloyds Banking Group found that 75% of employers are struggling to find the right skills for their roles, with 30,000 vacancies remaining unfilled.
With technology advances and automation, roles are increasingly requiring higher-level skills and greater agility. At the same time, Brexit has created an uncertain environment for investing in recruitment and skills, particularly with growing concerns over future access to international workers. There simply isn’t the skills base locally to fill these gaps, and without a shake-up of the skills system we risk standing still, unable to compete globally.
High quality apprenticeships are a vital channel for getting our workforce ready to meet these challenges. That’s why we’re calling on the government to review the apprenticeship levy without delay. Businesses support and want to deliver more apprenticeships, but are finding it too difficult to use their levy payments to deliver the apprenticeships they want and need.
This problem isn’t just affecting our members. In August, we published a letter in The Times alongside the North West Business Leadership Team, NHS Employers, the Creative Industries Federation, Association for Consultancy and Engineering, Tech London Advocates, the London Chamber of Commerce and Industry, the Association for UK Interactive Entertainment, and Collab Group. We sent a clear and unified message, calling on government to act – quickly.
Last month it was also reported that the government is considering dropping its ambition of 3 million apprenticeships by 2020. But dropping the target would just skirt around the issue. Numbers aren’t the problem – the system itself is what needs to change. In May only 22,300 apprenticeships started in the UK, nowhere near the potential number employers could take on. An opportunity to upskill our workforce, paid for by employers, is being lost.
Two immediate changes are needed
First of all, the Institute for Apprenticeships needs to be able to design and approve apprenticeship standards much more quickly. Secondly, employers must be able to spend their levy contributions more flexibly, by directly contributing to apprenticeship wage costs, or being able to spend more through their supply chains. The system should be delivering a return for employers investing through the levy, and should give young people the opportunity to access good quality, on-the-job training.
Government must start listening to employers if it’s serious about delivering on its skills promises. Dodging structural issues with the system simply won’t do, and we’ll continue to make this case until the government acts.