Brexit may force us to finally address skills shortage

Fri, March 24th, 2017

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Britain’s departure from the EU will force us to tackle a crisis that has been brewing for decades - a chronic shortage of skilled labour.

At a Liverpool & Sefton Chambers breakfast seminar in Liverpool late last year, Christian Spence, head of research and policy at Greater Manchester Chamber, said the latest research showed that half of North West firms were looking to recruit - but 90% of those were having difficulty doing so.

This, he claimed, was the legacy of 30 years of firms importing skilled labour rather than investing in staff training.
“This is at the heart of the British productivity disease,” he added.

At the same event Liverpool & Sefton Chambers chief executive Jenny Stewart said the education and skills crisis was “like a huge tanker in the middle of the Mersey that we have to turn around”.

“I have been at the chamber now for 10 years and we have been having this conversation about the shortage of skills for the whole of that time,” she added.

Changing times

The days of a steady supply of skills and labour from overseas may be coming to an end as we leave the EU. Even future status of EU workers in the UK now remains uncertain.

Evidence of the skills gap surfaces both nationally and regionally on a regular basis.

Last year it was revealed that in the software industry alone there are 20,000 graduate vacancies a year, and only 7,500 computer science graduates to fill them.

Another report last year by the North West-based built environment specialist Scape Group claimed the construction industry in the region was at “breaking point” due to a shortage of skilled people.

And, in the last few weeks, a study by Institution of Mechanical Engineers backed by Jaguar Land Rover owner Tata, revealed the UK needed an additional 1.8m engineers by 2025.

But it added there is currently a 20,000-a-year shortfall. It identified the problem as beginning in the schools system, where we are simply not equipping young people with the right skills.

This was a problem identified by Jenny Stewart at last year’s seminar, where she said: “We keep churning out young people preparing them for jobs that will not exist in 2030.”

Apprenticeships are key

There is a growing consensus that apprenticeships are a big part of the answer.

When New Labour took office in 2007 they began a major push to increase the numbers of young people in higher education.

Not necessarily a bad thing in itself but it helped create a perception that vocational training was the lesser alternative - something you considered if you couldn’t get into university.

That skewed viewpoint is slowly turning around but both education and industry need to do better if the crisis is to be addressed.

The schools system needs to undertake a fundamental review of whether it is equipping young people with the right basic skills - and businesses need to start investing in training.

To give just one example, chamber member Lucy Byrne of Liverpool-based dot-art said drastic cuts to arts and creative skills classes in schools could hold back Merseyside’s creative and digital sector, which is currently worth almost £1bn a year.

She described the the phenomenon as “terrifying”.

At the latest chamber budget briefing, invited members fed back that they felt more education was required in the changing jobs market, both locally and nationally.

Liverpool city region possesses huge economic potential in a number of areas such as maritime and energy, creative and digital, visitor economy, advanced manufacturing.

But these sectors cannot grow without investment in skills and training.

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