The UK’s skill gap could cost the UK’s economy £90bn a year by 2024, new research suggests.
There will be 21.8m people chasing low and intermediate-skilled jobs by the middle of next decade - a surplus of 8.1m – while there will be 4.2m highly skilled jobs that cannot be filled by the right candidate, according to the Learning and Work Institute.
This means the average worker will be £1,176 a year off, and the UK as a whole will suffer to the tune of £90bn.
According to the Local Government Association (LGA), which commissioned the research, Brexit makes solving this issue even more urgent “as higher-skilled migration has historically played an important role in addressing skills gaps”.
The same research estimates that almost two million European Economic Area migrants are currently in highly-skilled jobs, or are educated to a degree level or higher.
The LGA also estimates that skills and employment funding worth £10.5bn is “confusing, fragmented, untargeted and ineffective” in its current form, where it is run by eight different government departments or agencies. It calls for central government to devolve powers to local councils to help people get the skills they need to progress in work, and supply businesses with right skills at the right time to help local economies grow.
It is calling on the government to give groups of councils across England the power and funding to deliver a one-stop ‘work local’ service for skills, apprenticeship, employment, careers advice and business support provision within five years. It would bring together local skills planning, oversee job support including Jobcentre Plus and the Work and Health Programme and coordinate careers advice and guidance for young people and adults.
Cllr Sir Richard Leese, chair of the LGA’s city regions board, said: “This research paints a worrying vision of the skills gap facing the nation. Without radical reform, swathes of people face a future where they have skills mismatched for jobs, risking them being in low paid, insecure work, and reliant on benefits, at a huge cost to people’s lives and the local and national economy.
“The current system for getting the unemployed into work is not working for the economy, for employers or individuals. This has to change for the future economic prosperity of this country. Limits on EU migration after Brexit could exacerbate these skills challenges which makes it more important than ever to have a better system in place for retraining and upskilling the current workforce.”