Hunt must tackle worker shortage hobbling London’s economy, business groups warn
London’s economy is being hamstrung by a chronic worker shortage that Chancellor Jeremy Hunt needs to tackle at the 15 March budget, a new report from Britain’s biggest business lobby groups highlighted today.
Nearly two in three of the capital’s firms are struggling to fill vacancies, according to research carried out by BusinessLDN, Federation of Small Businesses, Confederation of British Industry and the London Chambers of Commerce and Industry.
The report indicates the capital’s economy risks missing an opportunity to keep unemployment low while the UK tips into a recession.
Some 77 per cent of companies are trying to hire staff, but today’s research suggests lots of those roles will end up unfilled.
The alliance of lobby groups has produced the research to illustrate the scale of labour scarcity London firms are grappling with to incentivise the Chancellor to free up funds to boost the jobs market at the budget on 15 March.
Britain’s jobs market has been running extremely tight since the country emerged from Covid-19 lockdown measures, mainly due to over 500,000 exiting the workforce.
UK unemployment is at a multi decade low and the ratio of vacancies to jobless people is at historic highs.
However, existing skill sets among available workers are failing to fulfil businesses’ needs.
Over half of the more than 1,000 businesses surveyed by Survation for the collective reckon their biggest recruitment roadblock “is a low number of suitable applicants with the required skills”.
“Skills shortages not only stunt business growth and affect employment but also have long-term implications for the future of our young professionals,” Richard Burge, chief executive at the London Chamber of Commerce and Industry (LCCI), said.
“In an environment where demand is outpacing supply, skilled workers are the backbone of our fragile economy,” he added.
Companies are responding to difficulties in finding suitable new recruits by drawing up plans to upskill their existing staff. Some 69 per cent are planning to boost training.
The CBI, LCCI, Business LDN and FSB are spearheading Greater London’s government backed local skills improvement plan, which seeks to ensure training better matches the needs of businesses.
The treasury has been contacted for comment.