Sunday, November 29, 2020

UK must invest in skills or risk sustained higher unemployment, report warns

The UK must either invest more in upskilling millions of employees, or risk sustained higher rates of unemployment and skills shortages, according to a stark warning from the CBI.

The business organisation’s ‘Learning for life: funding world class adult education’ report – based on analysis by McKinsey & Company – shows that nine in ten employees will need to reskill by 2030 at an additional cost of £13 billion a year.

Although the research was conducted before the pandemic, COVID-19 has accelerated changes to the world of work, and highlighted the pressing need to invest in skills. Indeed, the CBI says that the pandemic can be a catalyst.

Many employees are not working at full capacity as firms face weak demand. This time can be used for training, and many employers are already offering this opportunity. But more scale is needed and we recommend that business, unions, education providers and government work together to ensure spare time is productively used. The difference for our economy and employees could be transformational.

“Ensuring people can adapt to the changing world of work will be one of the most important missions this country embarks on in the next decade. The economic impact of COVID-19 makes starting now only more urgent,” said Dame Carolyn Fairbairn, CBI Director-General.

“Jobs were already changing with nine out of ten employees needing to reskill over the next decade. The pandemic has accelerated the need to act now.

“The right skills strategy can help every worker to progress their careers, drive up living standards and level-up the country. But a failure to act will leave businesses facing skills shortages and workers facing long-term unemployment. We are at a fork in the road that requires urgent and decisive action.

“The recently announced Lifetime Skills Guarantee is an important step in the right direction, but it is only a start. The government has long promised meaningful reform of the Apprenticeship Levy but has not delivered it. Meanwhile the number of apprenticeships continues to fall. It is time to end this failed experiment.

“Replacing the Apprenticeship Levy with a Flexible Skills and Training Levy and a training tax credit for SMEs would encourage every firm to invest more in the skills that are essential to the long-term success of their company and workforce.”

“And let’s not waste time during this pandemic. The CBI wants to work with unions, education providers and government to ensure that employees working fewer hours have as much opportunity as possible to retrain and reskill.”

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