Significant changes need to be made to skills and training provision in London if the capital is to continue to thrive, according to authors of London’s largest local business report.
A new report by London Chamber of Commerce and Industry and London Councils - 'London’s Local Business Survey: Assessing the capital’s skills challenge' - also claims that a radical overhaul of the apprenticeship levy is needed.
During the compilation of the report, more than 1,000 business were surveyed by ComRes, on behalf of London Councils and LCCI.
The survey asked London business leaders about the skills and recruitment challenges their companies faced and their views on training and apprenticeships.
It found that 42% of businesses that have to pay the apprenticeship levy still did not plan to use apprenticeship funding over the next twelve months – while an additional 40% expected to spend just half or less.
- Skilled manual/technical roles were most likely to be identified as roles where businesses faced skills challenges (by 42% of respondents), followed by professional and managerial roles (30%) and unskilled/semi-skilled roles (at 22%).
- 31 per cent of companies who tried to recruit during the last 12 months said job candidates lacked technical or job specific skills. A lack of literacy and written communication skills and commercial awareness were also prevalent.
- Three in five (61%) business respondents identified skills shortages among their current workforce, with technical or job-specific skills most commonly identified (20% of respondents), followed by advanced or specialist IT skills (13%).
- Three in five (59%) companies who tried to recruit encountered difficulties recruiting new staff over the past 12 months.
- If apprenticeship candidates were better prepared for the world of work, half (48%) of London businesses say it would make them more likely to employ more apprentices.
Chief Executive of London Chamber of Commerce and Industry Colin Stanbridge said:
“Most fundamentally, the survey indicates that the skills system is not providing what London businesses need.
“Skills challenges remain across a wide range of areas, including technical and digital capabilities, while the capital’s firms continue to be concerned about the employability of new applicants – including for apprenticeships.
“More broadly, we believe that the working of the apprenticeship levy in the capital must be reviewed, to make it far more effective for employers and in terms of labour market outcomes.”
Cllr Clare Coghill, Executive Member for Business, Europe and Good Growth at London Councils said:
“The survey helps London boroughs understand the main issues for businesses in the capital, so that we can create the right environment for them to prosper. If local government’s future income is to be linked to business growth, we need to fully understand its drivers and barriers and do all we can to support business and good growth.
“The focus this year on skills and apprenticeships highlights an area where giving London government more powers and levers could really help business to prosper.
“An immediate first step would be for the government to work with London boroughs, business and the Mayor to reform the apprenticeship levy; allow London to keep any levy underspend and use this funding to support businesses to spend the levy effectively and Londoners to be job-ready when they become apprentices.”
To ensure London’s businesses continue to drive economic growth in the capital and create employment opportunities that Londoners can benefit from, London Councils and LCCI’s report recommends:
- Access to relevant technical skills, improving digital skills and better employability skills for job candidates should be a focus for London.
- Increased devolution of skills funding to the capital is needed.
- The government should look to reduce bureaucracy and make the apprenticeship system simpler.
- The government and Mayor should review the apprenticeship levy in London and introduce more flexibility into the system.
- Levy payers should be allowed to use their levy spend for pre-employment training to get people ready for an apprenticeship.
- Rather than be returned to national government, unspent apprenticeship levy funding should be devolved to London government to invest in delivering more and better quality apprenticeships.
Notes to Editors:
- London Chamber of Commerce and Industry (LCCI) is the capital’s largest and most representative business organisation, with members ranging in size from multi-national companies to SMEs and sole traders.
- London Councils represents the 32 London boroughs and the City of London. It is a cross-party organisation that works on behalf of all of its member authorities regardless of political persuasion. It also runs a number of direct services for member authorities including the Freedom Pass, Taxicard and Health Emergency Badge. It also runs an independent parking appeals service and a pan-London grants programme for voluntary organisations.
- Colin Stanbridge, Chief Executive of LCCI is available for further comment and interview.
- ComRes surveyed a total of 1,020 London business leaders between 15 May and 20 June 2018, and 1,018 between 27 April and 2 June 2017. All data has been weighted to be representative of businesses both in London and in each of the sub-regions, by borough, company size, and broad industry sector. Sole traders have been excluded from the analysis. Data on planned usage of apprenticeship levy funds exclude those respondents that said they don’t know.
- ComRes is a member of the British Polling Council and abides by its rules. Full data tables are available at www.comresglobal.com.
- The full report can be found here.