Scottish business facing real shortage of skills

The challenge of updating and improving Scotland’s skills system has been outlined by a landmark new survey jointly conducted by the CBI and Pearson. The survey shows a growing demand for skills, with over three quarters of businesses operating in Scotland (77%) expect to have more jobs for people with higher-level skills over the coming years, with more firms and needing more people with and leadership and management skills (70%)

However, the supply of skilled workers is failing to keep pace with that demand: over two-thirds of businesses in Scotland (69%) are not confident about filling their high-skilled jobs in future.

 

‘A big challenge to get it right’

Neil Carberry, CBI Director for Employment and Skills, commenting on the survey, said “Skills are a top business priority but over two-thirds of firms in Scotland think they won’t be able to get the people they need. Getting the skills and education system right, as the Scottish Government seeks to close the attainment gap, will remain a big challenge for ministers.

“There are very positive signs throughout the country with more businesses in Scotland supporting schools, offering careers advice and investing in workplace training – firms need to keep upping their game in this area.”

Carberry went on to say that the recent announcement of an enterprise and skills review, coupled with the new national delivery plan for Scottish education, “Are positive steps that show the Scottish Government is alive to the challenges business face to recruit the right talent. Businesses want to see reforms that really improve outcomes for learners and will judge changes by that test alone.”

 

‘Current Levy design remains a concern’

Central to the improvement effort will be the effective development and deployment of the apprentice levy regime. Business bodies and individual companies have expressed concern over how the levy will work to deliver the real improvements in the skills landscape.

This latest survey shows that Scottish business’s priority for the levy is to ensure firms can offer more, and better quality training places. “To deliver this, the Scottish system must be responsive to business need (74%) and give firms increased flexibility (68%),” the survey says. Over two thirds businesses operating in Scotland (67%) demand better clarity between the UK and the devolved nations as to how the system will work across the UK’s internal borders.

However there are real concerns over the current levy design, with close to half of businesses expect the levy to cause increased prices or reduce margins (42%). “Most pressingly, firms foresee having to make cuts to non-apprenticeship training (43%) and downward pressure on wages (17%) is likely, while 10% say they are likely to cut numbers of apprenticeships to meet levy costs.”

Carberry went on to say that, “As it stands the levy system works for Whitehall but businesses aren’t convinced it will work for Larkhall.

“While the ambition of increasing apprentice numbers is positive, the design – in Scotland and in England – needs to recognise the breadth of great training currently being delivered. It must also avoid unintended consequences, including fewer apprenticeship opportunities, downward pressure on wages or cut-backs on non-apprenticeship training.