It feels like the skills gap in UK manufacturing (and, indeed, global manufacturing) has been a topic of conversation for a long time now. However, it remains hugely relevant. In his Spring Budget 2017, Chancellor Philip Hammond announced plans to create a highly-skilled workforce and boost UK productivity. These plans build on the government's Industrial Strategy green paper.
Clearly, these proposals are significant to manufacturers around the country. So, what exactly is the UK manufacturing skills gap and how does the government plan to bridge it?
What is the UK manufacturing skills gap?
The "skills gap" is a term that gets bandied around, so let's define what it actually means. In basic terms, the skills gap refers to the difference between the skills required for a job and the skills possessed by potential employees. In the manufacturing industry, this translates into a lack of highly-trained engineers coming into the workforce.
It's easy to see why this is a problem. Without the right people, manufacturing organisations stagnate – productivity drops and they struggle to grow – and, ultimately, without intervention, the UK could find itself unable to compete on the world stage.
The EEF Skills Report 2016 stated: "[Manufacturers] 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." It found that more than a third (35 per cent) of vacancies in manufacturing are considered "hard-to-fill", with the biggest challenges including: "applicants lacked technical skills", "insufficient number of applicants" and "applicants lacked relevant experience".
With the Fourth Industrial Revolution looming large and against the backdrop of increasing globalisation, UK manufacturers simply cannot afford to fall behind. So, what is to be done?
What the Spring Budget 2017 said
In the executive summary of the Spring Budget 2017, it is stated that the UK government will seek to "help young people from ordinary working families across the country get the skills they need to do the high-paid, high-skilled jobs of the future, vital for a competitive workforce".
The government admitted that England's technical education system is "confusing" and that many of the 13,000 qualifications currently available are "of little value". The Spring Budget 2017 stated: "Employers consistently cite a lack of skills as a major concern."
So, what plans have been made to combat this?
The government outlined plans to improve the availability of technical education for young people, announcing policies to "transform technical education for 16-19 year olds" through the introduction of T-levels, and to "fund maintenance loans for students pursuing technical education at higher levels, opening up the same opportunities available to those studying on the academic route":
- T-levels - like A-levels, these are for 16-19 year-olds, but provide a technical rather than academic education. The government plans to offer 15 different routes and increase the number of hours that students train by more than 50 per cent - to over 800 hours a year on average. Programmes will also include an industry work placement. T-levels will be introduced from 2019-20 and over £500 million of additional funding will be invested each year.
- Further education maintenance loans - also from 2019-20, the government will provide maintenance loans to students taking technical education courses at levels 4 to 6 in National Colleges and Institutes of Technology.
The government also plans to invest in research and innovation, with the aim of "developing the UK's skills base, upgrading infrastructure, and encouraging investment".
For more information, it's well worth delving into the Spring Budget 2017 document yourself.
The apprenticeship levy
The Spring Budget 2017 is not the first time the government has focused on the UK manufacturing skills gaps. The apprenticeship levy comes into force next month, on 6 April 2017, obliging all employers operating in the UK, with a pay bill over £3 million each year, to invest in apprenticeships.
Apprenticeships are extremely valuable, enabling organisations to grow and nurture a pool of highly-skilled workers. You can read more about this initiative in our post, As a manufacturer, are you ready for the apprenticeship levy?
The UK manufacturing skills gap continues to present a challenge to the manufacturing industry. However, the Spring Budget 2017 and other recent initiatives demonstrate that this problem is not being swept under the rug. While there are still obstacles to overcome, an increasing emphasis on technical education and the drive to create a highly-skilled workforce creates room for optimism.
