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British manufacturers warn of skill shortages

Britain’s manufacturers are struggling to recruit skilled workers and keep pace with global technology, according to an industry report.

Three-quarters of companies say they have faced difficulties finding the right workers in the last three years, according to business group EEF. It warns a skills shortage is putting productivity growth at risk and adding to pressure on manufacturers as they battle a host of pressures in domestic and overseas markets.

The report comes just weeks after the Office for Budget Responsibility (OBR) cut its forecast for potential productivity, or what workers in the UK can produce an hour, triggering warnings of damage to living standards, wages and government tax receipts.

The EEF says the struggle to find the right people with the right skills is compounding those problems. It predicts demand for skills will rocket and urges the government to launch grants for apprenticeships and reform the education system to ensure leavers’ skills match needs of businesses.

Technology is manufacturing globally, with increasing automation of production in sectors such as car-making. In turn, that has increased demand for new skills such as programmers for robots. In the wider economy there have been warnings of large-scale job losses from the so-called fourth industrial revolution. The World Economic Forum has predicted more than 7m jobs are at risk in the world’s largest economies over the next five years as technological advances in fields such as robotics and 3D printing transform the world of work.

The EEF claims that ministers are not matching industry’s efforts to tackle a skills crunch, such as in-house training programmes and competitive pay packages. “We still struggle to find a sufficient number of candidates to satisfy the demands of our sector, and too many candidates lack the skills that manufacturers need,” said EEF’s chief executive, Terry Scuoler. “Had manufacturers not already been taking action, we would arguably now be over the cliff-edge, not just approaching it.”

Two-thirds of manufacturers cited a lack of technical skills among applicants and almost as many, 64%, said there was an insufficient number of candidates, according to the EEF’s survey of 239 companies.

The group also highlights government figures showing that the proportion of hard-to-fill vacancies in manufacturing remained at 35% in 2015 – unchanged from 2013 and worse than in 2011 when it was at 30%. Those figures from the UK Commission for Employment and Skills put hard-to-fill vacancies for all sectors in the UK together at 33%.

The EEF predicts recruitment difficulties will intensify given manufacturers expect their demand for skilled workers to rise over the next three years. Almost six in 10 (59%) expect to need more production-related technical skills and almost half expect to need more staff with IT skills, according to the skills report.

Overall, 72% of companies said they were worried about acquiring the skills their business will need in the next three years. Companies in the survey said they were offering training and flexible working to help, with eight in 10 planning to recruit manufacturing and engineering apprentices in the next 12 months.

The EEF used its report to renew its complaints over the cost to employers from a new national living wage coming in this week and an anticipated apprenticeship levy due to start next year. It also demanded more help on skills from the government, which has pledged a “march of the makers” and less reliance on consumer spending to fuel economic growth.

Responding to the report, the Department for Business, Innovation and Skills (BIS) said the government was working closely with manufacturers to raise productivity and had already cut red tape and invested £6.9bn in the UK’s research infrastructure.