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Gloucestershire Business News

FSB: New education secretary must start with focus on skills for small businesses

Small firms in England are being held back by poor vocational skill provision in schools, challenges in accessing apprenticeships, and inadequate incentives to retrain and upskill, according to the latest FSB research, published today (September 2).

The Scaling up Skills report finds that the vast majority (78 per cent) of small firms are currently struggling to recruit the right people, with eight in ten (82 per cent) of those firms flagging a lack of relevant qualifications, skills and experience among candidates. The majority (60 per cent) also say a lack of applicants is an issue.

With apprenticeship starts tumbling since the introduction of the Apprenticeship Levy, one in five small employers say that bringing back the £3,000 incentive to hire an apprentice which existed over lockdowns would encourage them to hire additional apprentices.

A similar proportion (22 per cent) say financial support around hosting T Level placements would encourage them to bring more young people into their business.

In light of the findings, FSB is urging the new education secretary and other Cabinet ministers to:

• Establish a target in legislation that by 2035 no young person in England should complete compulsory education without at least Level 2 qualifications, and that three-quarters of the working age population in England should have at least Level 3 qualifications, with at least two-thirds of working-age people in every English region qualified to this level.

• Maintain the Apprenticeship Levy and Government funding for apprenticeship training within small firms; revamp financial incentives to take on apprentices and host T Level placements; and provide apprentices with free bus passes.

• Increase the Corporation Tax relief for employers training low or medium-skilled employees, and build on the success of Skills Bootcamps by introducing 50+ Skills Bootcamps, which would provide the skills older people require to remain in or re-enter the labour market.

Tina McKenzie, FSB policy chair, said: "Our members tell us their growth potential is being held back by a lack of appropriately-skilled staff, with vital roles going unfilled, ultimately harming the economy.

"This skills and training deficit is a perennial issue, but far from an insoluble one. Our report sets out a roadmap for change on every level, from schools to apprenticeships to workplaces.

"We also want more to be done to upskill groups further away from the workplace, such as ex-offenders, older workers, and disabled people, who could help fill skills shortages and find meaningful employment if given a helping hand.

"As things stand, too many young people, through no fault of their own, are leaving school without the knowledge, awareness and advice they need to excel in commercial settings and start businesses. That has to change.

"If the Government is serious about levelling up every region of England, and rebuilding the economy, our recommendations definitely need to be on the new education secretary's slate."

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