Can Mel Stride’s bootcamps address ‘urgent need’ to boost workforce?
The government’s new plans to get more British people into the workforce got a mixed reception even as the importance of the issue was reasserted by the International Monetary Fund (IMF).
In a major speech this morning, Mel Stride, minister for work and pensions, laid out plans to get domestic labourers into jobs which previously would have gone to migrants.
He pledged to deliver a cross-government taskforce to develop recruitment initiatives – ‘skills bootcamps’ – for unemployed people and form tighter links between employers and jobcentres.
There are a number of overlapping aims behind the policy. First, businesses are clearly finding it difficult to find the right candidates, what businesses call a ‘skills gap’.
The importance of the issue was flagged again by the IMF in its latest assessment of the UK economy, released this morning.
“There is an urgent need to upskill the UK workforce, given larger observed skill gaps than in peer countries,” the Washington based body said.
It particularly pointed to recruitment difficulties faced by firms in high skill sectors, such as digital and software, manufacturing and construction. Without addressing these challenges, the economy will face huge challenges in the coming years.
Secondly, the policy is also intended to help reduce the recent rise in economic inactivity, which is both weighing on the UK’s potential growth rate and putting up the government’s welfare bill.
Figures out last week showed that the inactivity rate rose to 22.1 per cent in the first quarter of the year, up over 800,000 compared to pre-pandemic. This is largely driven by people out of the workforce due to long-term sickness.
Long term sickness and immigration
Perhaps most importantly though, the policy is closely linked with the government’s ambition of bringing down immigration.
“For too long we have relied on labour from abroad when there is great talent right here in the UK,” Stride said. “This is a huge opportunity for the thousands of jobseekers within our domestic workforce to move into roles that have previously been filled by overseas workers”.
The government has taken a number of steps to try and reduce migration in recent months, many of which have made it more difficult for businesses to find workers.
New visa wage thresholds were introduced in April, which increased the minimum salary requirements for skilled workers visa recipients from £26,200 to £38,700. In recent weeks, big firms like KPMG and Deloitte have withdrawn offers from foreign workers because they did not meet the right visa requirements.
Stride admitted that moving away from migration might provide a “recruitment challenge,” but argued the policy formed part of a shift towards an “economic model based on British talent”.
So, will it work?
Kate Shoesmith, deputy chief executive at the Recruitment and Employment Confederation (REC), said it was right that getting British people back into work was a top priority for the government, but questioned some of the framing behind the policy.
“It shouldn’t be about picking winners or employing British workers over foreigners. It is about creating the right conditions for long-term, sustainable economic growth – and that starts by creating the right conditions for the UK labour market,” Shoesmith said.
“The bottom line is that many British businesses are at breaking point because of labour shortages,” she added.
Lizzie Crowley, senior skills adviser at the Chartered Institute of Personnel and Development (CIPD), said she welcomed the reforms but that it would not be sufficient on its own to address the skills gap.
“Targeted job specific training can be effective at improving employment and earnings outcomes for the unemployed, but providing access to real jobs, with training, is much more effective,” she said.
Crowley drew particular attention to the impact of the Apprenticeship Levy. Since the Levy came into force in 2017, the number of young people starting on the programmes has dropped by 41 per cent for under 19s and 36 per cent for those aged 19 to 24.
“Until the Government recognises the need to make the Apprenticeship Levy more flexible and takes steps to reverse the collapse in apprenticeships for young people, then efforts to boost employer investment in skills will continue to be undermined,” she said.