Skills shortage will slow recovery, warns HSBC and Prince's Trust

Joint report warns on problems with young people

HSBC
HSBC

More than two-thirds of British businesses fear that a skills shortage will “slam the brakes” on the UK’s economic recovery, according to a new survey.

Almost three-quarters (73%) of British businesses polled by the Prince’s Trust youth charity and HSBC bank believe a significant skills crisis will hit the UK within the next three years. More than four in ten (43%) predict it will happen within the next 12 months, according to its polling.

Antonio Simoes, the UK chief executive for HSBC, said: “It is essential that we invest in young people now and equip them with the skills that both they and British businesses need to thrive.”

Last week, official figures showed Britain had finally emerged from its worst post-war downturn.

Gross domestic product (GDP) grew by 0.8% in the second quarter, taking the size of the economy 0.2% above its pre-recession peak, figures from the Office for National Statistics (ONS) showed.

But the poll of 616 business leaders found that 68% believe a skills shortage would slow Britain’s recovery, with more than a third (35%) fearing it would cause their business to fold. More than half (53%) said they were already having trouble filling vacancies.

Almost three quarters (72%) said that recruiting young people was “vital” to preventing this shortage.

The Prince’s Trust, set up by the Prince of Wales almost 40 years ago, aims to help 58,000 unemployed young people this year, providing vocational training in sectors with identified skills shortages such as construction, retail and logistics.

It called on more employers to help increase the number of young people it can support this year.

Martina Milburn, chief executive of The Prince’s Trust said: “It is deeply concerning that employers are struggling to fill vacancies when we have hundreds of thousands of unemployed young people desperate for work. The current economic recovery is encouraging, but in order to sustain this growth, UK plc needs to invest in the next generation to avoid a skills vacuum in the future, which threatens to hamper economic growth.

“We are urging businesses to take action now to up-skill the workforce of the future to prevent the bubbling skills crisis from boiling over.”

Last week the International Monetary Fund (IMF) predicted that Britain would be the fastest growing major world economy in 2014, raising its GDP forecast for the fourth time in a row to 3.2%.

But critics pointed to the continuing fall in real-terms wages as evidence that the benefits of recovery were not yet filtering through to households.

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