UK Skills Shortage Crisis 'Costing Britain Billions'

Britain could save billions of pounds by making young people more employable over the next five years, according to the chief of the UK's largest youth enterprise charity.

Michael Mercieca, chief executive of Young Enterprise, told IBTimes UK that it is important that the country tackled the "skills shortage" and called for a cross-party 20 year plan to address the employability issue.

"If you look at the cost of benefits that are paid to unemployed young people, then that runs into billions," he explained.

"If you then look at the cost to employers of having to re-train and up-skill the young employees who haven't got the skills they need, that's another cost.

"If you consider that there are around 13 million people going through the education system in any one year, if you could just tweak and increase their productivity – by giving them the right skills, for example – they would become better, more productive employees and therefore produce more, which runs into billions over five years."

The charity chief's comments coincide with research released from Young Enterprise which revealed that only 12% of teachers working in the poorest areas of the UK (C2DE schools) are optimistic about their pupils chances of securing a job once they leave education.

The study, which was conducted in partnership with the National Schools Partnership and questioned more than 500 people, also found that two thirds (66%) of teachers from the rest of the UK (ABC1 schools) felt unhappy about the future employment prospects of their students and more than six in ten (63%) of teachers feel that employability skills are not given enough priority.

The survey also revealed that 79% of parents feel skill development should be more of a priority in schools and only 20% of parents across Britain felt happy about the future employment prospects of their children.

John Allan, national chairman of the Federation of Small Businesses, added: "Our members increasingly tell us that youngsters lack the soft skills needed for the workplace, such as communication and problem-solving.

"If we are going to prepare young people for the future we need the education system to start 'thinking business'. This is why we are supporting Young Enterprise in this campaign."

The findings come after the Business Secretary Vince Cable warned that the UK's skills gap is "crippling" the country's manufacturing sector.

The senior Liberal Democrat MP told delegates at a Department for Business Manufacturing summit in New Brighton, Merseyside that his ministry was attempting to resolve the issue.

"The problem which is growing, is the problem of skills - we just don't have the right level of people at all stages [who have the abilities employers need]," Cable said.

"We've got a gap already. We've got people approaching retirement who have got to be replaced, this is potentially a crippling handicap unless we get on top of it."

Cable explained the government is addressing the problem by, among other things, putting more emphasis on apprenticeships which are employer-led.

The Office for National Statistics said that there were more than 850,000 young people out of work in the three months to April.

The research body also revealed that the UK's unemployment rate was 18.5% over the same period, much higher than the country's total jobless rate of 6.6%.