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Productivity plan fatally undermined by weak skills strategy

  • 10 Jul 2015
The government’s plan to boost the UK’s productivity risks being fatally undermined unless more is done to address the country’s skills challenges, according to the CIPD (the professional body for HR and people development). 
Responding to today’s Productivity Plan (Fixing the foundations: creating a more prosperous nation), Ben Willmott, CIPD Head of Public Policy, comments:  “Proposals in today’s productivity plan to increase the number and quality of apprenticeships and simplify and streamline the professional and technical education system are of course welcome, but only scratch the surface on solving the skills part of the UK’s productivity problem.
“We have a high proportion of people in low-skilled and low-paid jobs by international standards and an equally high degree of over-qualification with too many employees unable to use the skills they have because of poor leadership and people management, inadequate work organisation and poor job design.
“We also have a perfect storm of falling public and employer investment in further education and training. A simplistic focus on increasing employer investment in apprenticeships through a levy risks taking money away from broader investment in workforce development.”
The CIPD believes that solving these problems requires a team effort involving government working closely with businesses, particularly SMEs, which are responsible for 60% of private sector employment in the UK. 
Willmott continues: “We welcome today’s announcement that Sir Charlie Mayfield will be leading a drive among large employers to boost workplace productivity but there needs to be much greater emphasis on the provision of high-quality low or no cost support, advice and guidance to help small businesses improve their people management and skills development capability and recognise the value of workforce investment. They also need help to access available public skills funding and high quality training to get the most from their people and grow.”
“Our report on workplace productivity published last week highlights that leadership and management practices and investment in training and development are clearly linked to better performing and more productive workplaces. The challenge is to help small businesses in particular raise their game in this respect.
“The new locally oriented Business Growth Hubs provide an ideal means to deliver this type of support if they are given some limited additional investment and encouragement from government. 
“It is also crucial that the government protects the adult skills budget from any further cuts as the UK’s ageing working population and rapid changes to working practices created by technology will increasingly require people in the labour market to train to keep their skills up-to-date and relevant to the changing requirements of employers.”
Review of skills policy As a first step the CIPD believes we need a fundamental review of skills policy to shed light on how the skills system as a whole currently operates and what changes are needed. The landscape has changed massively since the last major overhaul of overall skills policy (Leitch 2006) and policy makers at national and local levels need to be working together if we are to see meaningful progress in addressing our skills and productivity deficits.

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