The Federation of Small Businesses has welcomed the creation of Skills England by the Labour government but it warns that the new body must not overlook the needs of the UK's 5.5 million small businesses.
The government has announced the creation of Skills England, a new training body which promises to "transform opportunities and drive growth". According to the government, UK skills shortages doubled to more than half a million between 2017 and 2022, and now account for 36% of job vacancies.
Skills England promises to bring together central and local government, businesses, unions, universities, colleges and training providers to meet the skills needs of the next decade across all regions.
Prime minister Keir Starmer said the new strategy would "kickstart economic growth, by opening up new opportunities for young people and enabling British businesses to recruit more home-grown talent. From construction to IT, healthcare to engineering, our success as a country depends on delivering highly skilled workforces for the long-term. Skills England will put in place the framework needed to achieve that goal while reducing our reliance on workers from overseas."
A skills strategy that meets the needs of small firms
Responding to the announcement, Tina McKenzie, policy chair of the Federation of Small Businesses (FSB) said: "More co-ordination is welcome, but delivery is what counts. Small firms will want to see real safeguards put in place so the new body is not 'captured' by large employers.
"The skills system needs to be adaptable and nimble, as there's great potential for improvements to growth and productivity if the entire workforce can be equipped with the right skills. Skills England must keep small businesses' needs and particular strengths central to its way of thinking, and must commit to making the skills system as straightforward as possible for them to navigate."
However, McKenzie raised concerns about the impact on apprenticeships within small firms. She said: "Skills England should be tasked with increasing the number of small business apprenticeships year-on-year. Small businesses were enthusiastic early adopters when it comes to apprentices - we want to see this new body overcome the real flaws in curriculum design which have been such a significant factor in apprenticeship decline."
Skills gaps and labour shortages
Businesses continue to report that skills shortages are impacting on recruitment as many firms say it's hard to recruit skilled workers. Research conducted by the Institute of Directors (IoD) in May 2024 found that almost half (45%) of business leaders cited skills and labour shortages as having a negative impact on their organisation.
"Availability of skills remains a top issue for businesses. We welcome the government's commitment … to putting employer engagement at the heart of Skills England. It is crucial that analysis from Skills England is used to target government skills interventions in areas of current and future skills shortages so that businesses can recruit the staff they need." Alexandra Hall-Chen, IoD principal policy adviser for employment.
Written by Rachel Miller.