Despite years of repeated warm words and commitments, it’s clear the Government has failed to resolve the skills crisis facing UK plc, with studies suggesting as many as nine out of ten firms across the country struggle to recruit the skilled workforce they need.
Even with the highest level of unemployment and lowest level of employment of any English region, many businesses in my own part of the world – the North East – continue to report difficulties in recruiting the right staff, and regularly raise concerns about the mismatch that persists between the skills available in the labour market and the needs of local firms.
In the face of this skills shortage, it’s little wonder the British economy has experienced such weak productivity growth over the last decade – and that’s before we have even left the European Union. And yet, more than two and half years after the referendum and less than 40 days to go before B-Day, we’re still no clearer as to what Brexit will actually mean for our future workforce.
As co-Chair of the APPG on Apprenticeships, I’ve heard from a large number of speakers from a wide range of sectors: from teachers to technicians, charities to construction. Throughout these discussions it’s always evident that, whilst delivering the right skills has long been a challenge for our economy, Brexit has made this time bomb tick ever faster.
Because, whilst we’ve not always been able to provide the right foundations for cultivating the skills UK businesses need, we have previously been able to rely on a steady stream of motivated and skilled workers from outside our country to fill that gap. However, a reported fall in the number of migrants wanting to work in the UK is already exacerbating our longstanding skills deficit.
The Government’s post-Brexit immigration proposals could widen this gap even further – whilst also presenting British firms with additional costs and bureaucracy, on top of any other new red tape and financial burdens they face as a result of leaving the EU. And this leap into the dark comes at a time when the Fourth Industrial Revolution makes ensuring Britain’s workforce has the rights skills ever more urgent.
Whilst significant, these challenges are not insurmountable and increasing the number of high quality apprenticeships available across the country is a critical step in bridging the skills gap we face. A good apprenticeship doesn’t just mean learning how to perform a role on the job, it also results in someone developing a skill set they can build on and re-apply as they move onwards and upwards throughout their career. And, because of the unique nature of an apprenticeship, that skill set is far more likely to reflect the skills that businesses want, and those our economy needs.
But this means getting our apprenticeships system right post-Brexit, and that clearly isn’t happening even at the moment. We are still to see, for example, if the reforms to the Apprenticeship Levy announced at the Budget will reverse the deeply concerning downward trend in the number of apprenticeship starts since this flagship Government policy was introduced.
Apprenticeships also face real challenges in the months and years ahead. They represent a significant commitment for business in a period of great uncertainty, as it takes time and money to develop someone and give them the skills and knowledge they need to do a job well. Even with Government support, an apprentice will always involve a bigger investment than someone who already has the necessary skills and familiarity with their sector. For this type of investment to take place, employers need stability and clarity about the future – both of which are the antithesis of what Brexit represents.
We must also recognise what Brexit could mean for those who have already successfully undertaken an apprenticeship, and are now setting out on their career – particularly in manufacturing, the financial or services industries – and who face great uncertainty about their future job prospects as a result of our impending departure from the EU. This could do immeasurable damage to the ‘brand confidence’ of apprenticeships, after many years of work to build it up.
Apprenticeships cannot possibly resolve the myriad of abstract challenges Brexit poses for our economy – and they may well suffer in the face of it – but, if Britain is to have any chance of competing globally in a post-Brexit world, it will be absolutely essential for Government, working hand in hand with employers and apprentices themselves, to get apprenticeships right.