Skills shortage reaching crisis point
It is apparent that the skills shortage in the UK is now approaching a crisis point in many industries. In November 1997, bodies from various industrial sectors were urging that much more should be done if the crisis is to be avoided.
As 1997 draws to a close, skill shortages are becoming acute in many sectors of the UK economy, leading to worries in many quarters that a rapid rise in wages may begin to result (UK9709162F). The Confederation of British Industry (CBI) has warned that interest rates may have to rise if the growing skill shortages increase inflationary pressures. Although the CBI feels that inflationary pressure may be subdued by a relative decline in export order-books, it is worried that the skill shortage might feed through in the form of higher earnings growth.
For many, the employment and retraining of mature workers is thought to be the answer to some of the shortages. The Engineering Employers' Federation (EEF), for example, argues that there is a shortfall of 5,000 engineers in UK manufacturing, and is urging the Government to establish a national scheme of "mature apprenticeships" for people aged over 25 as a way of tackling the problem. EEF feels that many employers would offer mature apprenticeships if there were some support from government for funding. It is thought that each modern apprenticeship costs at least somewhere in the region of GBP 26,000 with employers contributing 75% . A mature apprenticeship would not cost so much because it would not take so long to complete (two years instead of four) and because mature workers have much more work experience anyway.
While export orders in UK manufacturing have been depressed by the strength of the GBP, the service sector has seen rapid growth. Employment continued to rise in this sector in October but overall levels have been stifled by the amount of turnover the sector experiences. This is leading to shortages which, experts say, are beginning to have an effect on wage increases. Again, older workers are already said to be bridging the gap in areas such as secretarial and clerical work.
The Government is already attempting to deal with some of the problems of training in its "Welfare to work" programme (UK9707143F). Furthermore, in the health sector, the Government has announced that it is to spend GBP 2.15 million on an advertising drive to recruit nurses and midwives for the National Health Service. In October, nursing unions were warning that shortages in the industry were becoming critical and that a quarter of nurses were due to retire by 2000.
It would seem that different industries may require different solutions to their skill problems, and that much more effort is needed if the Government is to achieve its twin aims of keeping down inflation while increasing employment.