Many of Britain's small businesses are struggling to grow due to two major skills issues - a lack of digital confidence and the inability to recruit skilled people.

That is the two major findings of a major new report released today by the Federation of Small Businesses, which has called for more action to close the growing skills gap that is affecting SMEs.

The FSB's survey reveals that over a quarter of SME owners in England lack confidence in their basic digital skills and more than a fifth believe a lack of basic digital skills among their staff is holding them back from increasing their digital and online presence.

And the research also finds that nearly a third of SMEs who have tried to recruit in the year since the Brexit vote have struggled to find workers to fill roles because of acute skills shortages. Skilled trade jobs, including electricians, IT engineers and construction workers are most affected as the labour market remains tightly squeezed.

The FSB say productivity growth in the UK will continue to stall without government and industry action to tackle a digital skills deficit in small businesses and more work on reducing the skills gap that leaves many SMEs unable to recruit at the level they need.

Ken Simpson, FSB regional chairman for Gloucestershire and the West of England (pictured), said the report highlighted the need to sell the benefits of a successful digital strategy to businesses of all sizes.

"Our research shows that not all small businesses are embracing the opportunities offered them by the digital revolution and many lack confidence to deal with the issue. We need to work with the government to find ways of increasing training opportunities for SMEs in this field, so they can feel confident to boost their digital skills and online presence."

Mike Cherry, the FSB national chairman, said the report also showed how difficult it is becoming for SMEs to feel they are on top of their skills agenda - and how hard it is for them to recruit or upskill existing members of their team.

"Productivity is being hampered by nagging skills shortages which are making recruitment a nightmare for small firms. As the UK moves towards Brexit, a technical skills black hole threatens the economy. Small firms also tell us that technical skills are crucial to the future growth of their businesses.

"Small firms clearly recognise the value of providing training for themselves and their staff, but it can be a struggle to find the time and money, and in some cases even to find the right training locally. All Local Enterprise Partnerships (LEPs) should ensure that there is relevant, accessible training available to meet the needs of small businesses and the self-employed."

FSB believes a strategic approach to training is essential to support small business growth aspirations, so small businesses know where to turn for help on this. Small firms say the main barriers to training are the fact that their staff are too busy (25 per cent), training is too expensive (21 per cent) or the type of training they need is not available locally (16 per cent).

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