London First launches business-backed plan to tackle capital's skills gap
12 June 2018
London First’s Employment and Skills Commission, made up of business leaders including the Chairman of Tesco and the CEO of Heathrow, are demanding the government fixes the broken apprenticeship system, as they launch their plan to tackle skills shortages.
The Commission’s plan follows research with Lloyds Banking Group which revealed 76% of London’s businesses are struggling to find candidates with the right skills1, resulting in 30,000 vacancies left unfilled and holding back growth.
London First’s research shows the most pressing problems are in the apprenticeship system. Unless urgent action is taken, £300m of apprenticeship levy funding for young and adult learners in London could go unspent this year.
Brexit and automation are set to worsen the situation. All sectors of the economy rely on European Union workers to fill jobs that can’t be done by Londoners due to skills shortages. EU citizens make up 15% of the workforce in finance, 30% in construction and 40% in hospitality.
Many Londoners will also need support to re-train due to automation. The research from London First and Lloyds Banking Group reveals most businesses expect job automation to impact within the next seven years, when many pupils beginning secondary school now will enter the workplace. Three out of four companies are planning for an impact on their staff numbers or a change in their need for skills.
To solve the skill shortages, London First is proposing a plan for London which includes:
Embedding transferable skills such as digital and employability into secondary education as compulsory subjects.
Devolving more control over skills funding and policy to a London-level business led-decision making model of skills provision.
Growing Skills London – the UK’s largest jobs and skills event – by creating an online platform to help students and parents gain better access to the skills and work experience programmes business has to offer.
Business working with schools to deliver up-to-date digital skills.
The Plan’s priority is an immediate call to government to fix the apprenticeship system by:
Providing more flexibility in how employers can spend their Apprenticeship Levy funds.
Allowing speedier development of Apprenticeship Standards which embed transferable skills.
Enabling employers to determine the amount of off-the-job training their apprentices should take.
Establishing a UCAS-style system for applying for apprenticeships – a simple clearing house underpinned by accessible course and provider information.
This reform programme will allow business to expand apprenticeship opportunities at age 18.
John Allan, CBE Chairman of London First, said: “London is facing a serious skills shortage as too many people miss out on the opportunity to share in the prosperity this city creates. Our plan is a clear call to action for business and government. Funds are already available, but unless the government fixes the apprenticeship system, hundreds of millions of pounds will go to waste. Business too needs to do more to make apprenticeships an attractive choice for young people.
“We must challenge weaknesses in the economy before the impact of Brexit and automation takes hold. Our plan will help to prepare Londoners for the jobs of the future and fix the system to offer apprentices and employers the opportunity they need to succeed.”
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