Skills Mismatches and The Role of VET: United Kingdom National Report

Tremplin
Skills Mismatches and the Role of VET

The United Kingdom National Report
Depatment of Adult and Continuing Education
University of Glasgow
Dr Pamela Clayton
May 2003
Contents
1. Introduction .......................................................................................................................................... 1
2. The United Kingdom Labour Market.................................................................................................... 1

2.1 Current employment trends: analysis of employment by sectors and type/size of company........ 1
2.1.1 Changes in the workforce..................................................................................................... 1
2.1.2 Changes in the workforce by sector ..................................................................................... 2
2.1.3 Gendered employment......................................................................................................... 3
2.1.4 Ethnic minority employment ................................................................................................. 6
2.1.5 Employment of people with disabilities ................................................................................ 6
2.2 Employers...................................................................................................................................... 6
2.3 Critical issues in the national context ............................................................................................ 6
3. Demand and supply............................................................................................................................. 7

3.1 The skills shortage......................................................................................................................... 7
3.1.1 The demand side.................................................................................................................. 7
3.1.2 The supply side .................................................................................................................... 8
3.1.3 The skills imbalance ............................................................................................................. 9
3.2 Areas of skill shortage ................................................................................................................. 10
3.2.1 Types of skill....................................................................................................................... 10
3.2.2 Sectors and occupations with skill shortages..................................................................... 11
3.3 Specific analysis of the agro-food and engineering sectors ........................................................ 12
3.3.1 The agro-food sector .......................................................................................................... 12
3.4 Specific Analysis on skill needs in the engineering sector .......................................................... 12
3.5 People most likely to lack needed skills ...................................................................................... 14
3.6 Future projections ........................................................................................................................ 15
4. Provision of education and training ................................................................................................... 16

4.1 Lifelong learning .......................................................................................................................... 16
4.1.1 Learning provided or supported by employers................................................................... 16
4.1.2 Post-compulsory learning provided by the educational system ......................................... 18
4.2 Concerns about quality................................................................................................................ 18
4.3 Links between employers and providers of learning ................................................................... 20
5. Recommendations and action plans published ................................................................................. 21
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6. Government initiatives to address the skills problem ........................................................................ 23
6.1 Organisations and services ......................................................................................................... 23
6.2 Funds .......................................................................................................................................... 24
6.3 Schemes for the unemployed...................................................................................................... 24
6.4 Schemes for young people.......................................................................................................... 24
6.5 Qualifications and awards ........................................................................................................... 24
6.6 Targets......................................................................................................................................... 25
7. Expert interviews ............................................................................................................................... 25

7.1 The CBI........................................................................................................................................ 25
7.2 The Engineering Employers’ Federation (EEF)........................................................................... 25
7.2.1 Shortage of skills in the engineering sector ....................................................................... 26
7.2.2 Education and the engineering sector................................................................................ 26
7.2.3 Training by employers ........................................................................................................ 27
7.2.4 The image of engineering................................................................................................... 27
7.2.5 Recommendations by the EEF on education and training................................................. 27
7.2.6 Hope for the future? ........................................................................................................... 28
8. Summary and conclusion .................................................................................................................. 28
Resources .............................................................................................................................................. 29
Bibliographic references .................................................................................................................... 29
Useful web sites................................................................................................................................. 32
Relevant bodies which collect and use information on skills and the economy ................................ 33
Other material .................................................................................................................................... 33
Employers Skill Survey................................................................................................................ 33
Sectoral case studies................................................................................................................... 33
Official documents ....................................................................................................................... 34
Useful publications....................................................................................................................... 34
Abbreviations ......................................................................................................................................... 34
Definition of terms .................................................................................................................................. 35
2
1. Introduction
The problem of the skills mismatch in the labour market, that is, the disparity between the supply and
demand of skills, has been recognised in the United Kingdom for some time and has generated a
great number of surveys, research reports and official documents. This report, therefore, incorporates
a large amount of material that is already in the public domain.
The literature includes not only data on skills mismatch but also useful discussions of terms, notable
the word 'skills' itself. At least four types of skill have been abstracted: key skills; occupation-specific
skills, involving specialised knowledge and abilities; basic skills, including literacy; and personal
attributes, covering a wide range of characteristics, such as motivation. There are also different types
of skills mismatch. In a labour market which is currently close to 'full employment', the most important
are: skill shortage vacancies, that is, vacancies which are hard to fill because employers cannot find
enough candidates with the skills needed; and internal skill gaps, that is, where at least a third of
employees require enhancement or updating of some of their skills. The main increase in demand for
labour has been in higher-skilled occupations.
Factors in the skills mismatch include:
• The gendered nature of the labour market, in that female participation, which has been increasing,
is largely in the tertiary sector, whereas some of the labour shortages are in sectors such as
engineering, which is principally staffed by male workers;
• The under-representation in paid work of members of certain ethnic minorities;
• The under-representation in paid work of people with disabilities;
• A demand for higher levels, and relatively new types, of skill, which is not met by supply;
• The preponderance of small businesses, with few resources for training and inadequate
knowledge of training opportunities;
• The extent of deficiency in basic skills;
• The scarcity of workers qualified below level 2;
• Mismatch between employers' demand for skills and the output of learning providers;
• An uneven distribution among employees of training provided by employers;
• Career and educational choice by individuals
• Uneven provision of and access to educational and careers guidance.
Sectors differ in their problems regarding skills. The sectors chosen for special attention are electrical
engineering and fish-processing, both of which are skilled occupations which have skill shortages,
albeit for different reasons.
2. The United Kingdom Labour Market

2.1 Current employment trends: analysis of employment by sectors and type/size of
company
2.1.1 Changes in the workforce
Current employment levels in the United Kingdom are at a record high. In 2001, out of a working age
population (16 and over) of 46,832,000, the economically active comprised 63.28%. With only 3.10%
unemployment (ILO definition), 60.17% or 28,180,000 were in employment (Office of National
Statistics web site, 2002). A major part of this growth is in part-time and temporary employment, and
there have also been changes in working practices, types of work and the occupational structure.
There are regional differences.
Temporary employment has increased by one-third, to 7% of all employees in 1999. About half of
these are on fixed-term contracts, while others are ‘temping’ (going from job to job found for them by
agencies) or in casual work. The public sector has the highest percentage of temporary workers, at
10% of its employees.
Home working, both full- and part-time, is growing: in 1998 2.5% worked mainly at home, 3.5%
partially at home and 22.0% ‘some of the time’ at home, a total of 28.0%.
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There has also been a big increase in subcontracting. The 1998 Workplace Employee Relations
Survey found that 90% of workplaces with 25 or more employees subcontracted at least one service.
Most commonly, subcontracted services were building maintenance, cleaning, transportation of
document and/or goods, training and security.
One relatively new trend is the growth of call centres (offering services by telephone in, for example,
banking, telecommunications, IT support). In 1998 there were around 7,000 such centres employing
about 1.1% of the United Kingdom workforce. These are mostly outside London and the South East,
for example, in Scotland, Yorkshire and South Wales.
The occupational structure has changed greatly, with a move away from manual/low-skilled to
managerial, professional and technical occupations. Thus in the 1990s the main increase in
employment was in higher skilled, professional and technical occupations (Labour Market and Skill
Trends 2000).
There are regional variations in employment levels. Table 1 compares the situation in the United
Kingdom as a whole and Scotland between 1992 and 1999.
Table 1: Selected employment indicators in the United Kingdom and Scotland, 1992-9
UK average Scotland
(%) (%)
Total employment growth 1992-9 6.9 0.8
Female share of total employees 1999 47.4 48.6
Part-time employment 1999 25.3 25.6
Temporary employment 1999 6.9 7.7
Managerial, administrative, professional, associate professional
and technical staff employed 37 35
Source: Labour Force Survey
‘Moonlighting’ (taking on extra work without the knowledge of the authorities or of main employer);
unofficial jobs such as cleaning in private homes; working while officially registered unemployed; and
illegal occupations such as prostitution, theft and drug-dealing are not included in workforce figures.
Estimates of unrecorded labour go up to two million.
Voluntary (that is, unpaid) work, which is common in the United Kingdom, is also excluded. It is
estimated that at any one time one-third of the population is carrying out some form of voluntary work.
Finally, work that people do for themselves, their families, friends or neighbours is excluded. Any
survey of skills is, therefore, likely to be deficient if carried out only on the ‘official’ workforce. Given
this qualification, however, the figures used in this report refer only to this workforce.
2.1.2 Changes in the workforce by sector
An important feature of the United Kingdom workforce is that its distribution between sectors has
changed significantly since 1979. The growth in the workforce has been accompanied by a decline in
manufacturing and an increase in service sector employment. In 1998 around 75% of the workforce
was employed in services and only 17% in manufacturing. Of those in services, 28% were in
education, health and other services; 23% in distribution, hotels and restaurants; and 19% in banking,
finance and insurance. The main increase in employment has been in higher-skilled, professional and
technical occupations which in 1999 accounted for 37% of employment. Table 2 gives an overview of
these changes by main sector from 1979 to 2001.
Table 2: Analysis by main sector: changes in workforce deployment, 1979-2001

% Change
1979 1985 1991 1996 2001
1979 to 2001
Number of workers in all sectors ('000s) 27044 26226 27978 27638 29461 +8.94
Primary sector workers as % of all workers 4.94 4.59 3.72 2.91 2.23 -54.86
Secondary sector workers as % of all workers 33.27 27.58 24.72 22.51 20.38 -38.74
Tertiary sector workers as % of all workers 61.79 67.83 71.56 74.57 77.39 +25.25
Based on raw data in ‘Workforce jobs by industry: United Kingdom: Thousands: Seasonally adjusted’,
supplied by the Office for National Statistics, 2002
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Table 2 shows an overall increase in the United Kingdom workforce accompanied by a marked decline
in employment in the primary and secondary sectors. Contributory factors have been the great
reduction in the coal-mining industry and the fall in manufacturing production and employment. The
figures exclude all illegal workers, that is, those who are not paying tax or national insurance and
whose employment is not known to the authorities. The figures for the secondary sector in particular,
which includes construction, are under-reported; some casual labour in the agricultural sector is also
unlikely to be reported.
The tertiary sector, on the other hand, has shown a steady increase over the period and almost four-
fifths of registered workers are in this sector. Again there is likely to be under-reporting, for example, of
cleaners in private homes.
2.1.3 Gendered employment
One of the most striking features of changes in the workforce is the participation of women, which has
been increasing steadily over the last few decades. Women’s employment differs from men’s in a
variety of ways. They tend to be concentrated in fewer sectors than men and form a majority of
employees in public administration, education, health and other services (67%), distribution, hotels
and restaurants (54%) and banking, finance and insurance (52%) (Labour Market and Skill Trends
2000). Over 90% of engineering jobs are held by men, even in software engineering, where there is a
shortage of workers (Equal Opportunities Commission [EOC] 2001). Moreover, male graduates are
much more likely than female to work in IT and business and finance occupations (Careers Service
Unit 2001).
Over 80% of part-time employees are women but this has fallen from a high of over 90% in 1984.
There is evidence that ‘part-time women’s skills and educational qualifications are more likely to be
under-utilised than those of any other group in the population’ (Campbell et al., p. 43). Half the
increase in part-time employment is now accounted for by men. Table 3 shows changes in the sex
composition of the workforce by main sector from 1979 to 2001.
Table 3: Changes in sex composition of the workforce ('000s), 1979-2001

% Change
1979 1985 1991 1996 2001
1979 to 2001
Primary
Men 1115 977 812 646 494 -55.70
Women 222 227 230 160 162 -27.03
All 1337 1204 1042 805 656 -50.93
Secondary
Men 6708 5430 5236 4731 4679 -30.25
Women 2289 1804 1680 1490 1324 -42.16
All 8997 7234 6916 6221 6003 -33.28
Tertiary
Men 8399 8775 9391 9378 10654 +26.85
Women 8311 9013 10629 11233 12147 +46.16
All 16710 17788 20020 20611 22801 +36.45
All sectors
Men 16222 15181 15439 14755 15828 -2.43
Women 10822 11045 12538 12883 13633 +25.97
All 27044 26226 27978 27638 29461 +8.94
A disproportionate number of women have left the craft and related and other occupations sectors,
which are generally low skilled. Table 3 shows that women’s employment in the secondary sector
overall has declined more than men’s while their employment in the tertiary sector has increased
more. Their minor involvement in the primary sector has shown more stability than men’s. At the same
time, women have overtaken men in tertiary sector employment and the net increase in female
employment is in this sector.
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An increase in female employment has to some extent been compensated for by an increase in male,
such that women’s share of total employment, at 46% in 2001, has changed little since the 1990s; but
overall women are becoming more, and men less, economically active.
Table 4 illustrates the proportional changes in the gendered workforce from 1979 to 2001.
Table 4: Changes in sex composition of the workforce (percentages)

% Change
1979 1985 1991 1996 2001
1979 to 2001
Primary sector workers
as % of all workers:
Men 6.87 6.44 5.26 4.38 3.12 -54.58
Women 2.05 2.06 1.83 1.24 1.19 -41.95
Secondary sector workers
Men 41.35 35.77 33.91 32.06 29.56 -28.51
Women 21.15 16.33 13.40 11.57 9.70 -54.14
Tertiary sector workers
Men 51.78 57.80 60.83 63.56 67.31 +29.99
Women 76.79 81.61 84.77 87.19 89.10 +16.03
Women have been found predominantly in the tertiary sector throughout this period and it now
accounts for around nine out of ten female workers. In 1979 only just over half of the male workforce
worked in services, but this has risen to almost seven out of ten, with most of the rest in the secondary
sector.
Tables 5 to 7 give a more detailed analysis of sectoral employment.
Table 5: Primary sector: by sub-sectors and by sex (percentages working in each industry)
% Change
1979 1985 1991 1996 2001
1979 to 2001
Agriculture, hunting, forestry & fishing
Percentage of all men 3.07 3.27 3.19 3.05 2.19 -28.66
Percentage of all women 1.23 1.39 1.29 0.88 0.89 -27.64
Percentage of all workers 2.33 2.47 2.34 2.04 1.59 -31.76
Energy and water
The energy and water sub-sector has since 1985 employed a smaller percentage of men than
agriculture, hunting, forestry and fishing and the loss of employment in this sub-sector is very striking.
As mentioned above, the closure of many coalmines is a significant contributory factor. The
agriculture, hunting, forestry and fishing sub-sector shows a smaller decline; this is partly due to the
loss of fishing fleets. Women have long been a minority in this sector and most would carry out white-
collar work.
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Table 6: Secondary sector: by sub-sectors and by sex (% working in each industry)
% Change
1979 1985 1991 1996 2001
1979 to 2001
Manufacturing
Construction
Percentage of all women 1.45 1.77 1.88 1.62 1.56 +7.59
Employment in manufacturing shows a significant decrease, whereas construction work has shown
only a minor decrease. As mentioned above, the construction industry uses an unknown proportion of
illegal workers. Women’s role in manufacturing has declined further than men’s.
Table 7: Tertiary sector: by sub-sectors and by sex (percentages working in each industry)
% Change
1979 1985 1991 1996 2001
1979 to 2001
Distribution, hotels and restaurants
Percentage of all men 16.58 18.6 19.49 20.03 20.51 +23.70
Percentage of all workers 20.34 22.02 22.51 22.91 22.88 +12.49
Transport, storage and communication
Banking, finance, insurance etc.
Public administration, education and
health
Other services
The most important sector in terms of employment is the tertiary, which comprises a wide range of
sub-sectors. Whereas the primary sector produces raw materials and the secondary sector transforms
them, the tertiary sector produces services. Some of these services, such as transport, storage,
distribution and parts of the banking, finance and insurance services, involve goods and are therefore
partly dependent on the secondary sector, a situation which is mediated by the import of goods from
overseas. Others are personal services, such as hairdressing; some involve public ‘goods’ such as
health and education; and so on. It is therefore a very diverse sector and encompasses a range of
skills and levels of skill.
Women’s predominance in distribution, hotels and restaurants is increasingly challenged by the entry
of men into this expanding sub-sector and a much greater percentage of men now enter banking,
finance and insurance. On the other hand, a greater percentage of women enter public administration,
education and health, thus increasing their predominance in this sub-sector.
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The labour force was projected to increase gradually until 2010, through population increase and
1
slightly higher activity rates for women, ethnic minorities and possibly people with disabilities.
2.1.4 Ethnic minority employment
‘Ethnic minorities’ are people who define themselves as coming from a non-British origin, either by
birth or parentage, whether or not they were born in the United Kingdom - this term is normally used to
refer to ‘non-white’ people, who are thereby disadvantaged to varying extents. Immigrants are a
subset of ‘ethnic minorities’, and are people who were not born in the United Kingdom and who may
have problems with the English language.
Ethnic minority people account for around 6% of the United Kingdom population. In managerial and
professional occupations, those of Bangladeshi, Pakistani and Black Caribbean origin are under-
represented, while whites, Chinese, Indians and Black Africans are equally represented. Most ethnic
1
minority groups are over-represented in unskilled and semi-skilled manual work.
2.1.5 Employment of people with disabilities
Almost one-fifth of the working age population of Great Britain have a long-term disability which limits
the work they can do. Disabled people have only half the likelihood of the non-disabled to be in
employment. Currently they make up 12% (around 3.1 million people) of all in employment but are
more likely than others to work part time or be self-employed. It is estimated that over a million of
unemployed disabled people would like to (re)join the labour market when they can. One problem,
however, is that they are more than twice as likely as others to have no qualifications. Those who
have the greatest difficulty finding employment are those with mental illness (about three-quarters are
unemployed) and learning disabilities (about two-thirds unemployed). Once unemployed, people with
disabilities are more likely than others to become long-term unemployed (Hibbett 2000).
Employers
There are about 3,700,000 in the United Kingdom, of which about 2,400,000 are sole traders or
partnerships without employees (constituting 12.7% of the workforce). In 1998 (and there is no reason
to suppose that this has changed since), over 99% of businesses had fewer than fifty employees
(Small Enterprises), accounting for 32% of all employees. Enterprises with fewer than 250 employees
(SMEs) together employ 43.6% of employees. A slightly greater percentage in Scotland, 61%, work in
SMEs than the United Kingdom average, 56%. Firms with 250-499 employees occupy 5.2% and large
firms (500+ employees) a further 38.5%, although there are only 3,445 of these (Labour Market and
Skill Trends 2000). This is summarised in Table 8.
Table 8: Size of firms and number of employees in the United Kingdom, 1998
Size by number of employees Number of enterprises % Share of total employment
None 2,339,645 12.7
1-49 1,286,975 32.0
50-249 24,610 11.6
250-499 3,215 5.2
500+ 3,445 38.5
All 3,657,880 100.0
Source: Department of Trade and Industry
2.2 Critical issues in the national context
Changes affecting employers fall into three broad areas: technological change, changes in work
practices and competition.
• Technological change. Personal computers are now used in all sectors and IT skills have become
essential in most workplaces, especially in large firms. The automation of routine tasks and the
trend for managers to carry out tasks previously assigned to secretarial staff mean that many
employees have to perform more sophisticated tasks and therefore to upgrade their skills. There is
1 Labour Market and Skill Trends 2000
6
less routine, mundane work to be done. If e-commerce expands as expected, there will be an even
greater demand for IT skills.
• Changes in work practice, although they affect large firms more, have occurred across all sectors.
The number of tiers of management has been reduced and occupational boundaries are blurred,
so there is more need for team working, communication and multi-skilling. The allocation of target-
orientated tasks means that workers are more likely to have to manage their own time and
organise their own work.
• Competition. Deregulation, trade liberalisation and better transport and communication have
increased competition and hence the need for improvements in efficiency. Furthermore, customer
care is now seen as increasingly important (Labour Market and Skill Trends 2000).
3. Demand and supply

3.1 The skills shortage
‘UK Business demands a skilled and educated workforce’, was the call at the British Chambers of
Commerce (BCC) Annual National Conference in April 2000. The main problems are skill gaps,
recruitment difficulties and skill shortage vacancies.
3.1.1 The demand side
Skill gaps. In the 1990s, the problem of skill gaps declined with only 15% of employees reporting
these in 1998. Of those who reported skill gaps, there was little difference between size of employer or
sector, though there were regional differences (Labour Market and Skill Trends 2000; Green & Owen
2001). More recently, the Employer Skill Survey (ESS) found that of 27,000 employers interviewed,
7% reported a skills gap (an estimated 803,000 employees deficient in the required skills). Of those
reporting skill gaps, 23% said that ‘some of their staff lacked full proficiency’ (equivalent to 1,900,000
employees) and 7% said ‘a significant proportion of the workforce’ lacked proficiency (equivalent to
803,000) (Hogarth et al.2001, p. 49).
A further problem is that of latent skill gaps, that is, gaps that are not recognised by employers but
which restrain their potential for growth (Hogarth & Wilson 2001). For example, the CBI (2001)
conducted a large-scale survey of private sector employers in 2001, with a 14% return yielding 673
responses. These were disproportionately larger firms and firms with the better human resource
development (HRD) departments and 13% of those surveyed were aware of skill gaps.
Recruitment difficulties. Because of the situation of almost full employment, hard-to-fill vacancies
(whether skill shortage vacancies or not) form the major part of the problem for a significant number of
employers. In 1998, 23% of employers reported hard-to-fill vacancies. The worst affected were firms
with fewer than 25 employees: two-fifths had hard-to-fill vacancies (Labour Market and Skill Trends
2000).
A survey in England from August to November 1999 found that 43% of establishments surveyed had
hard-to-fill vacancies because of a lack of candidates with the required skills, qualifications or work
experience. Next most important were job seekers’ lack of interest in some jobs and a shortage of
candidates with the requisite personal attributes. The industries most affected were craft-intensive
construction and manufacturing, finance and business services. The effect was greater in large
organisations than in SMEs and in the South and South East than in the Midlands or North (Campbell
et al. 2001, p. 98).
Reasons for recruitment difficulties include the following:
• High staff turnover in low-paid occupations;

• Too many candidates lack basic skills;
• A shortage of people with specific technical qualifications;
• Former cuts in training budgets have reduced the number of skilled workers transferring from other
employers;
• Relatively low salaries in occupations such as science teaching in schools;
• A rapid growth in the need for new skills;
• New graduates often lack generic skills, commercial understanding and sometimes technical skills
(Campbell et al. 2001, pp 87-8).
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Skill shortage vacancies. The ESS found that of 27,000 employers interviewed, 4% reported a skill
shortage vacancy (or an estimated 159,000 such vacancies in England). The CBI Employer Survey
(2001) found that 39% of those surveyed said that skill shortages had a significant or severe impact on
business performance.
Small Enterprises appear to have the worst skill shortages and many are worried by, inter alia, a
shortage of skilled workers (Stanworth 2001). Because small firms are the most common, they suffer
40% of all skill shortage vacancies. New businesses are typically small and more likely to be ‘high-
tech’, so these are particularly susceptible to skills problems as they expand (Labour Market and Skill
Trends 2000a). One survey found that only 16% of SMEs find it easy to recruit staff because there are
too few qualified candidates, poor levels of skill and high salary demands (PKF 2001).
On the other hand, large employers are more likely to report increasing skill needs, particularly in
Transport, Public Administration, Other Services, Finance and Business Services (Labour Market and
Skill Trends 2000).
Some areas find greater difficulties than others, however. For example, only one-third of SMEs in
Scotland but 60% in East Anglia had recruitment problems (PKF 2001). Overall the worst skill
th
shortages are found in London, the South-East and South-West England (Financial Times 14
November 2001, p. 2).
3.1.2 The supply side
The United Kingdom has almost the worst position in Europe concerning the number of adults with
inadequate or non-existent basic skills, although most of such people are in employment (conference
report, Skills and Enterprise Network, August 2001). One-fifth lack basic skills (including literacy and
numeracy) but although there has been a 12% increase in people on literacy and numeracy
programmes, this is only a tiny proportion of those with basic skill difficulties. Hence out of an
estimated seven million adults who are functionally illiterate and/or innumerate, only 250,000 are
studying to remedy this (National Skills Task Force (2000b, p. 138).
Overall, more than a quarter of the labour force has either no qualifications or qualifications below
level 2. These tend to be unemployed, older, manual and/or from certain ethnic groups. These same
groups have low participation in adult learning (Campbell et al. 2001). Table 9 shows the numbers of
people who took level 2 qualifications 1999/2000 and the route they took.
Table 9: Routes to level 2 qualifications by age, 1999-2000, England (to nearest thousand)
Academic route Vocational route
5 or more GCSEs Intermediate Other VQ
Age at start of academic year NVQ level 2
(grades A to C) GNVQ level 2*
16 and under 286,000 36,000 17,000 11,000
17-18 - 10,000 62,000 14,000
19-24 - - 55,000 14,000
25 and over - - 85,000 59,000
Not classified - - 2,000 1,000
* Edexcel (formerly BTEC), City & Guilds and OCR (formerly RSA).
- = fewer than 1,000
Source: Labour Market Quarterly Report August 2001
Generally, young people take NVQs and GNVQs only up to levels 1 and 2 and in a narrow range of
fields (Campbell et al. 2001, p. 77).
Table 10 shows comparable data for level 3 qualifications, which are mostly acquired in academic
rather than vocational subjects.
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Table 10: Routes to level 2 qualifications by age, 1999-2000, England (to nearest thousand)
Academic route Vocational route
2 or more Advanced NVQ Other VQ
Age at start of academic year
GCE ‘A’ levels GNVQ level 3 level 3*
17 and under 165,000 22,000 3,000 17,000
18 17,000 13,000 10,000 12,000
19-24 2,000 7,000 35,000 18,000
25 and over - 1,000 47,000 23,000
Not classified 0 - - -
- = fewer than 1,000
Young people (up to 18) overwhelmingly take the academic route to level 2 and 3 qualifications and
within this the traditional school qualifications are favoured over the newer GNVQs (Campbell et al.
2001, p. 77).
It is hoped that the basic skills situation will be ameliorated by the increase in young people aged
sixteen and seventeen staying on in education/training (over 80%, and one-third of young people are
in further education). Educational attainment in schools has been steadily rising, as has the number of
graduates; but it will be seen below that there are concerns about work-readiness.
3.1.3 The skills imbalance
It is hard to analyse the mismatch in skills because no direct way of measuring them exists, so proxies
must be used in the form of qualifications and occupational levels of jobs. Employer surveys are less
than satisfactory because they cannot necessarily disentangle the effects of skill problems, working
practices and business performance, and some do not have the skills to evaluate their skill needs.
One kind of evidence of a skill shortage is where the acquisition of a skill costs much less than the
financial return, especially in a fully flexible labour market, but we do not have this. Another sign would
be occupations where wages are rising the fastest, but only about half of employers raise wages to
reduce skill shortages (Campbell et al. 2001, pp 17-19).
There is, despite these methodological difficulties, an observably serious problem which can be
summarised in the following points (Campbell et al. 2001):
• Demand for skills exceeds supply;

• The ‘knowledge society’ excludes people without basic skills; literacy and numeracy in the general
population are just below the OECD average but in the working age population the United Kingdom
ranks as the sixth worse in the OECD - yet it ranks high in the proportion of workers qualified at the
highest level (5);
• There is an excess of people with no or only level 1 or 2 skills;
• People with vocational skills do not necessarily have generic skills or the required personal
attributes;
• According to the OECD, the United Kingdom is close to the OECD average concerning those in the
workforce qualified to levels 2 and 3, but the growth in qualified workers is among the slowest in
the OECD countries;
• Skill gaps affect 7% of firms, particularly in manufacturing and hospitality;
• The worst rate of skill gaps is in the South and East of England;
• 40% of skill shortage vacancies are in firms with fewer than five employees;
• The worst-affected sectors are manufacturing, construction, wholesale/retail, health/social care and
business services
• Three occupations account for over half of all skill shortage vacancies - professional, associated
professional and skilled trades;
• The most scarce skills are non-IT technical/practical and advanced IT;
• Skill shortage vacancies are found predominantly in London, the South East, the South West and
the East of England, and are strongly correlated with low unemployment and rapid jobs growth.
On the other hand, of OECD countries, the United Kingdom has the highest rate of university
graduates, and participation rates in vocational education and training are among the highest - 56%
had taken such training in the previous year compared to an OECD average of 34%.
9
3.2 Areas of skill shortage
3.2.1 Types of skill
Overall, the majority (70%) of employers reported a combination of generic and vocational skills
needs, rather than only vocational or only generic (National Skills Task Force 2000b, p. 118). In the
ESS 2001, skills lacked also tended to be generic but future demand was predicted to be for the
generic skill of basic computing (21%) and the vocational skills of advanced IT/software (33% of
firms), and non-IT technical/practical skills (18%) (Hogarth et al. 2001, p. v).
The skills demanded, then, are of various kinds (see Anderson & Marshall 2000 for a discussion of
different kinds of skill in the workplace). The National Skills Task Force (2000a, 2000b) identified six
main areas:
• Basic (literacy and numeracy);

• Generic, including communication, customer handling, management, problem-solving and team-
working (to which could be added basic computing);
• Maths;
• Intermediate level occupation-specific skills, from craft to associate professional occupations;
• Specialist ICT skills;
• Qualifications at level 2 or above.
Level 2 occupations account for the biggest number of skills shortage vacancies in many regions
(Green & Owen 2001, p. 41). Concerning specific skills, the greatest deficit is in ICT skills. The
minimum requirement for employability is now held to be basic IT skills (e.g. data input, following on-
screen instructions). Moderate IT skills (e.g. word processing, spreadsheets, email) are in such
widespread demand that it can be accounted a generic skill (National Skills Task Force 2000b, p.
139). There is, however, an inadequate level of generic IT skills in the adult population and although
there has been a large increase in the supply of people with specialist ICT skills, there are concerns
about the quality of entrants to IT courses in Higher Education and few women enter this field. At the
same time many employers are unwilling to develop ICT skills in-house (National Skills Task Force
2000b, p. 141).
Maths skills are much in demand but in poor supply. Only 45% of young people get a grade C at age
15; only 10% of young people take A level maths; and only 1% of first degrees in 1998 were in maths
(compared with 2% in history) (National Skills Task Force 2000b, p. 142).
There are too few young people with craft-related vocational qualifications at levels 2 and 3 (National
Skills Task Force 2000b, p. 130). This is partly because the sectors which require them appear to offer
little job security (especially in the shrinking private manufacturing sector) and relatively low pay.
Nevertheless, craft/skilled and associate professional/technical occupations together accounted for
four out of ten skill shortage vacancies.
Skill gaps. Of employers reporting a skills gap in 1998, over half said the following vocational skills
were lacking: technical and practical; computer literacy or knowledge of IT. Generic skills needed
were: customer handling; general communication; management; team working; problem solving; and
managing one’s own development.
About one-fifth reported low literacy/numeracy skills (Labour Market and Skill Trends 2000), but it
should be noted that employers are often unaware of employees with basic skills needs (CBI/TUC n.
d.) and these may be under-reported.
Intermediate level skills often require lengthy work-based training but past recessions have led to
employers cutting down on training; the employment of graduates in many higher intermediate
occupations has not been supported by work-based training even though employers often complain
that they lack the skills best learnt in this way (National Skills Task Force 2000b, p. 141).
The greatest quantity of skill gaps are found in lower level occupations and there is a strong demand
for relatively low-skilled staff in some sectors; but the critical skill gaps are managerial and
professional (Hogarth & Wilson 2001).
10
Skill shortage vacancies. Research on business and public service associate professionals (for
example, insurance underwriters, barristers’ clerks, personnel officers, market researchers and estate
agents), found that employers do not seem to recognise that they are in short supply, even though
these occupations display above-average employee turnover. Associate professionals are increasingly
carrying out tasks previously performed by professionals and the range of skills used has thus
increased, which enhances their ability to change employers in order to climb the career ladder
(Rogers & Waters 2001).
There is an increasing number of graduates entering associate professional and technical level jobs,
but these may not have ‘the range of work experience, business awareness and generic skills
employers are looking for’ (Campbell et al. 2001, p. 78). A Community Service Volunteers
(CSV)/Association of Graduate Recruiters (AVR) survey found that many AVR members felt that
graduates ‘lacked initiative and the ability for communication, decision-making and problem-solving’
(Newscheck 2001[b], p. 14).
3.2.2 Sectors and occupations with skill shortages
Skill gaps. Occupations where skill gaps were reported were mainly in professional, personal and
protective and clerical/secretarial services (Labour Market and Skill Trends 2000). There is also a
skills gap in the transport sector because of lack of staff training and development and such skill gaps
are found among managers, clerical and sales staff (DfES 2001a). The hotels and restaurants sector
also has skills gaps (Hogarth et al.2001, p. 158).
Hard-to-fill vacancies. In 1999 both the manufacturing and the service sector found it hard to obtain
semi-skilled and unskilled staff (Fletcher et al.2000).
Skill shortage vacancies. By 2000 the worse hit sectors were construction and business services,
while health and social care also had skill shortage vacancies (Hogarth et al.2001, p. 13).
In the first part of 2000:
• Expected shortages of skilled labour were reported by 14% of manufacturing firms (CBI Quarterly
Industrial Trends survey);
• In another survey 47% of manufacturers, as well as 40% of service industry firms, reported
difficulty recruiting staff (BCC Quarterly Economic Survey);
• In a survey of small businesses, 9.4% reported that the lack of skilled workers was their most
important problem (NatWest/Small Business Research Trust) (Labour Market Quarterly Report,
May 2000)
• The hardest to recruit to is the transport sector, where one-fifth of vacancies are due to shortages
or deficiencies in skills. Drivers, mechanics and vehicle sales staff are needed (DfES 2001a).
• Another recruitment survey states that employers expect to have the most difficulty in recruiting
‘managerial and professional staff in computing, IT, sales and customer services’ (Cranfield School
of Management 2001).
Table 11 summarises the position in a range of sectors according to the Skill Needs in Britain survey.
Table 11: Sectors in Britain by percentage of total external skill shortages in 1999
Sector Percentage
Business services 17
Manufacturing 16
Wholesale/retail 15
Construction 13
Health and social care 10
Other 29
Total 100
Source: Campbell et al. 2001, p. 92
Although the number of graduates is increasing, many employers still cannot recruit enough graduates
with the qualifications needed. Sectors anticipating the greatest shortfalls in graduate recruits were
manufacturing, production and industrial; services and financial and legal services; specifically,
graduates adequately qualified in engineering, IT, computer analysis and programming are in short
supply (Barber & Perryman 2000).
11
3.3 Specific analysis of the agro-food and engineering sectors
3.3.1 The agro-food sector
There are three main forms of production in food manufacturing:
• High-tech continuous or semi-continuous production to meet mass demand;

• Batch production for limited runs or where there are frequent changes in ingredients - although
sophisticated machinery is used, there is still a great emphasis on manual skills;
• Craft production and hand finishing, where little technology is involved and dexterity and manual
skills are valued.
Some firms use more than one form of production (Dench et al. 2000, p. 10).
Key characteristics of the agro-food industry in the United Kingdom include the following:
Size of industry and break-down by sex and hours worked:
• Almost 2% of all employees in the United Kingdom, and 9% of employees in the manufacturing
sector, work in food manufacturing;
• About two-thirds of employees are male and 96% of these work full time;
• Of the female employees, 70% work full time.
Breakdown of employees by level of occupation:
• Operative and elementary jobs, 45%;

• Skilled trades, 15%;
• Managers, 11%;
• Professional and associate professional/technical jobs, 12%.
Qualifications of the workforce:
• 19 per cent have no qualifications, especially at the trade, operative and elementary levels;
• 98 per cent of managers have some level of qualification.
• Largest sub-sectors in terms of employment:
• Meat production, processing and preserving;
• Bread, pastry and cakes;
• Cocoa, chocolate and sugar confectionery.
Size of firm:
• 74 per cent of firms have 1-19 employees;

• 2 per cent of firms have 500 or more employees (Dench et al 2000, pp 14-15).
Three kinds of skills and attributes are required by employers:
• Personal attributes;
• Generic skills;
• Vocational skills, including: understanding food hygiene; health and safety; understanding quality;
understanding the business; flexibility; maintenance skills and multi-skilling; dexterity and manual
skills (Dench et al. 2000, p. 11).
3.4 Specific Analysis on skill needs in the engineering sector
Engineering manufacture includes: basic metal manufacture; metal products; mechanical equipment;
electronics; electrical equipment; motor vehicles; aerospace; other transport equipment. Key
characteristics for the engineering manufacture industry in the United Kingdom 1999 include:
12
• Engineering manufacture accounted for more than a third of total UK exports;
• It contributes around £55 billion per year to UK GDP;
• Electronics is the fastest-growing sector;
• Engineering manufacture employed about 1.63 million people;
• There were over 70,000 engineering establishments in Great Britain2 (EMTA 2000, p. 3);
• Over half of engineering establishments have fewer than 5 employees, but only 5 per cent of all
employees work in these firms;
• About 30 per cent of all employees in the sector work in firms with fewer than 50 employees;
• Around a quarter of all employees work in 373 of the largest sites;
• Only 0.5 per cent of all sites employ 500+ workers;
• The South East of England accounts for 16% of employment in electronics and 16% in electrical
equipment.
Distribution of sites by number of employees:
• 55 per cent of sites have 1-4 employees;

• 1 per cent of sites have 500 or more employees.
Figures are rounded. Based on EMTA (2000, p. 5). Size varies according to sector, as is shown in
Table 12.
Table 12: Percentage of establishments in different sectors analysed by size of establishment

and percentage of total employment in each sector (significant figures in bold).
Size of establishment <5 5-49 50-199 200-499 500+
Product % % % % %
Basic metals 3 20 34 30 13
Metal products 10 46 29 11 4
Mechanical equipment 5 28 31 21 16
Electronics 5 19 24 19 33
Electrical equipment 4 21 31 27 17
Motor vehicles 2 10 17 23 49
Aerospace 1 3 10 14 73
Other transport equipment 6 16 20 14 44
% of total employees 5 15 26 19 25
Source: EMTA (2000, p. 7)
Skills needed are: ‘multi-skilling and greater flexibility; ability to deal with change; personal and
generic skills; new and specific technical skills; computer literacy and ICT skills;
management/leadership skills; customer service skills; ability to carry on learning and re-skilling’
(EMTA 2000, p. 14).
Skills gaps:
• over half of establishments surveyed reported these gaps:

− technical engineering skills in technician engineers and engineering technicians; in
craftsmen/women; and in operators and assemblers;
− IT/computer skills in clerical/admin. staff
• over 40% of establishments surveyed reported these gaps:
− technical engineering skills in professional engineers, scientists and technologists;
− management skills in supervisors
− management skills in managers;
− other skills in professional engineers, scientists and technologists (EMTA 2000, p. 16)
2
Great Britain comprises England, Scotland and Wales. The United Kingdom also includes Northern Ireland.
13
Hard-to-fill vacancies:
• over half of establishments surveyed reported these gaps:

− basic metals and other transport - supervisors in engineering
− motor vehicles - craftsmen/women
− metal products and aerospace - craftsmen/women
− mechanical equipment, electronics, electrical equipment - supervisors in engineering
− mechanical equipment and other transport - craftsmen/women
− basic metals and metal products - operators and assemblers (EMTA 2000, p. 17)
The Skills Task Force Employers’ Survey ‘identified that approximately 25 per cent of engineering
establishments had at least one skill-related hard-to-fill vacancy, compared to about 20 per cent
across the economy as a whole. The largest number of hard-to-fill vacancies were located in the craft
and related occupations’ (Davis et al. 2000, p. 55).
3.5 People most likely to lack needed skills
In parallel with analyses of skill shortages, a study of lifelong learning in England (Hillage et al. 2000)
found that literacy and numeracy, basic and intermediate skills and key skills in the workplace were
the areas of greatest learning need. The National Child Development Survey (NCDS) (of all people
born in a single week in 1958) found that at 37 years of age, 19% had low or very low literacy and
48% low or very low numeracy. These figures are likely to be understated as this long-term survey
loses more subjects from the lower-educated groups as time goes on (Labour Market and Skill Trends
2000).
Those most likely to lack needed skills are:
• People from lower social class groups, who are under-represented in higher education (HE)
(Connor & Dewson 2001);
• Speakers of English as a second or other language (ESOL) - estimated at around one million
people (Schellekens 2001);
• Older workers (Suff 2001);
• Young men in casual employment (Meadows 2001);
• Young men with multiple disadvantages (Meadows 2001);
• Employees aged 16-24 (with the exception of computer literacy which is less of a problem for this
group) (Labour Market and Skill Trends 2000);
• Young people living in the former ‘old economy’ areas such as those based on coal-mining,
shipbuilding, etc. (Gore & Smith 2001);
• People with disabilities (Hibbett 2000).
The situation for immigrants and ethnic minorities is complex.
Although immigrants earned more on average than the non-immigrant population, the range is very
wide, ‘with migrants over-represented at the top end of the income distribution and highly concentrated
at the lower end of the scale’ (Glover et al.2001).
Employers surveyed ‘insisted on fluency at a level equivalent to NVQ Level 3 as the minimum to get a
job with low-level communication requirements, but only one-third of ESOL speakers had this level or
better’ (Schellekens 2001). The least qualified group are Bangladeshis, followed by Pakistanis.
In 1998 a higher proportion of ethnic minority individuals (including immigrants) than ‘whites’ had no
qualifications, but there were more non-qualified whites than Black Africans or ‘others’ (principally of
‘mixed’ parentage). Black Africans, Chinese and Indian men are more likely than whites to have
university degrees. Furthermore the qualification differential between white and ethnic minorities is
insignificant in London, the South East, Scotland and Wales. A hopeful sign for the future is that ethnic
minorities are over-represented in post-school education, both full-time and part-time (Labour Market
and Skill Trends 2000).
There continues to be a ‘learning divide’: learning opportunities are greater for men, for people with
Internet access and for professionals and managers. A recent sharp increase in participation has
benefited mainly those with higher qualifications, young people and employed people (Aldridge and
14
Tuckett 2001). After undertaking training under ESF Objective 4, nearly 70% of trainees said they
were now more interested in education and training and of these 96% said they would like to take
more (Devins et al. 2000). On the other hand, only 40% of beneficiaries came from the priority groups
of unskilled and semi-skilled manual, craft and skilled manual and clerical/ secretarial; women, part-
time and no/low qualified employees were not disproportionately represented as they should have
been; there was not enough proper guidance for employees; and trade unions and NTOs found it hard
to join the Objective 4 Regional Committees (Devins et al. 2001).
As a result there are inequalities in skill attainment for, inter alia, those in low-skilled jobs and older
members of ethnic minorities (Campbell et al. 2001). LFS and other data suggest that those more
likely to receive training are ‘traditional’ (full-time and permanent) workers, but more part-time workers
are now receiving training. However, much ‘flexible’ working is concentrated in the lower occupational
groups (that is, manual and semi-skilled non-manual) and these receive less training. Where groups of
workers receive little or no training, it is presumably because the employer believes that the company
would not benefit (Green 1997).
Barriers to upskilling through formal learning include personal circumstances, unhappy prior learning
experiences resulting in lack of confidence, lack of motivation or fear of risk, lack of accurate
information about learning opportunities and inappropriate timing or location of courses (Firth & Goffey
1996). Perhaps surprisingly, people who lack basic skills are no more unlikely than others to
participate in education and training (Maguire et al. 2000). There are variations by sector:
• Business services give more training to full- than to part-time staff;

• There are generally low levels of training in the retail sector;
• There are relatively high levels of training in the oil and gas sector;
• The hotels and catering sector has high levels of ‘flexible’ workers, who receive relatively little
training (Rix 1999).
3.6 Future projections
Future job growth. In the decade to 2010, two million extra jobs are forecast, with the greatest growth
in distribution, hotels and catering; banking and business services; and professional services (Institute
for Employment Research 2001). Two-third of these are expected to be part time. The figure,
however, does not include the replacement of workers who move or retire and even in declining
sectors there was expected to be a new requirement for workers.
Future demand for and supply of highly qualified workers. Two million jobs for highly qualified
people (NVQ levels 4 and 5, equivalent to graduate and postgraduate qualifications) are expected to
require filling. Since 2.3 million people are thought likely to qualify at these levels over the period, a
surplus is expected (but note that this does not address the point of skills matching).
Future demand for low-skilled workers. A large ‘rump’ of low-skilled workers is thought to remain,
mainly adults without any formal qualifications, and there will be continued demand for low-skilled
workers, but in personal services and sales rather than in operative or elementary occupations
(Campbell et al. 2001, p. 40). Although these jobs require limited skills, these are unlikely to be
available to people without any skills.
Future employment by sector. A sectoral projection for 2009 foresees that 2% of employment will be
in the primary sector and utilities; 13% in manufacturing; 6% in construction; 28% in distribution and
transport; 29% in business and miscellaneous services; and 22% in non-market services (Campbell et
al. 2001, p. 37).
Future demand for IT skills. In 1992 only 25% of workers used IT in their jobs and 11.5 million
workers used some kind of IT equipment; by 1999 the figures were over 60% and over 18 million; and
the number of IT specialists employed grew from 500,000 to 800,000. The growth in the use of IT is
expected to continue, and one projection is that the IT services industry alone will need more than
540,000 new people between 1998 and 2009 (Campbell et al. 2001, p. 49).
15
4. Provision of education and training
There are ‘large gaps in our knowledge about the way the training market is functioning’ (Green 1997).
The training of young people is supported by the state but the training of adults in work is largely
funded and arranged by employers or employees. This section reviews the amount of education and
training provided by employers and the educational system.
It should be noted, however, that the National Adult Education Learning Survey (NALS) 2001 found
that 60% of those surveyed were involved in self-directed learning, that is, they were teaching
themselves, and over half of these undertook this learning for vocational reasons, to help them in their
current job or to prepare them for a future job (La Valle 2001). This form of learning is often omitted
from learning surveys (such as the LFS cited below).
4.1 Lifelong learning
A Labour Force Survey in 1999 found that 15% of working age were studying for a qualification and
14% were enrolled on a course (Labour Market and Skill Trends 2000). Occupations vary widely in
their take-up of vocational qualifications, as is shown in table 13.
Table 13: Vocational awards by major occupational group, percentages, United Kingdom, 2000
GNVQs/GSVQs* NVQs/SVQs* Other VQs
% % %
Clerical/secretarial 39 24 56
Associate professionals 30 5 19
Personal & protective services 22 19 2
Craft and related 4 23 11
Management & administration 5 13 2
Professional 0 6 3
Miscellaneous 0 3 5
Sales 0 4 0
Plant & machine operation 0 3 1
Total 100 100 99
* S = Scottish
4.1.1 Learning provided or supported by employers
‘Employers are a key partner in tackling skill deficiencies in terms of providing training; in enabling
employees to undertake training to upgrade skills; and in recognising the business benefits that accrue
through skill acquisition within their own firms’ (Campbell et al. 2001). On the other hand, there is a
tension between employers’ preference to invest in job-focused training and employees’ preference for
training that ‘confers an element of employability’, so to retain staff with scarce skills, employers may
need to offer more generic training (Tamkin & Hillage 1997).
A majority of ESS respondents’ employers agreed that training can help overcome skill gaps and
almost half admitted that they had skill gaps because they had failed adequately to train or develop
their staff. Many admitted that, except in the case of operative and assembly workers, it was their
failure to train or develop staff that meant that some were not fully proficient, particularly in new skills
needed for new working practices, new products and/or new technology (National Skills Task Force
2000b, pp 108, 120). The Employer Case Studies suggested that a lack of forward planning by firms
meant that skill deficiencies were discovered only after new policies were in place (National Skills
Task Force 2000b, p. 109).
Hard data on the outcomes of training is, in any case, scarce (Tamkin & Hillage 1997) and in the
private sector the issue is whether training brings an economic return, generally assessed through
‘intermediate’ variables such as productivity (output/employment), labour turnover and workers’
commitment. Twenty-one research studies in countries which included the United Kingdom found that
training mostly increased productivity, but the degree ranged from 80% to negligible. There is some
evidence that training reduces turnover but very little research has been done on its effect on
commitment. There is evidence that increased skills lead to increased productivity but these skills can
16
be obtained via recruitment as well as training, and economies of scale can also increase productivity
(Green 1997).
Nevertheless, training programmes can enhance production and profitability and improve morale,
team working and employee autonomy. Despite this, there is evidence that the United Kingdom has
lower levels of education, training and manufacturing productivity than many international competitors.
Surveys over the last few years found:
• One third of employers in 1999 provided some off-the-job training, most commonly job-specific and
in health and safety, and six out of ten provided on-the-job training. Almost half offered learning
opportunities to their employees. Of these, learning in IT, working with others and managing own
development were the most commonly offered. On the other hand, only 9% helped with basic
literacy and numeracy although 76% of these reported organisational benefits (IFF Research Ltd
2000);
• Where training is provided, a 1999 survey found that 81% of employers funded or arranged training
in health and safety and first aid; 78% job-specific training; 65% induction training; 60% training in
new technology; 58% management training; 52% supervisory training; and 7% foreign language
training (Labour Market and Skill Trends 2000);
• The Investors in People (IiP) award is a national standard which ‘sets a level of good practice for
training and development of people to achieve business goals’ (Labour Market and Skill Trends
2000, p.54). In May 1999, 22% of United Kingdom firms with fifty or more employees and 38% with
200 or more employees had received this award (the figures for Scotland are 18% and 29%
respectively);
• In a sample of 200 companies, 40% wanted to develop management skills, 49% IT skills, and 46%
hygiene, caring and assessor/instructor skills, but only 11% mentioned maths and literacy. The
types of skills training reported by employers were skills in current job (72%), new skills for a
different kind of job (16%) and new sets of skills (4%). The beneficiaries of ESF Objective 4 were
managerial/administrative staff, 30%; clerical/secretarial, 15%; craft-related, 11%; personal and
protective services, 12%; plant operatives, 9%; other, 23%. In the previous year 52% had had no
in-house training and 63% no external training (Devins et al. 2000);
• Of four thousand employers, both public and private sector, surveyed in 2000, three-quarters
provided training, and two-fifths provided off-the-job training; the bigger the employer, the greater
the provision of both on-the-job and off-the-job training; 26% of employees received off-the-job and
66% on-the-job training in 2000; and 61% of employers felt that their average employee required
increased skills (Spilsbury 2001);
• Although 90% of workplaces offered some kind of training, it was skewed towards the highest
qualified and much of it was very short and at a very low level. Off-the-job training was provided by
92% of firms with 200 or more employees and 79% of those with 25-49 employees, but only 36% of
firms with fewer than 25 employees (Campbell et al. 2001, pp 73 -76);
• Although there has been a 50% increase in the rate of training, leading to a 4% rise in productivity,
‘only a third of employers with fewer than five staff provide off-the-job training’ (Financial Times,
14th November 2001, p. 2);
• A report by the Institute for Fiscal Studies ‘shows training increases company productivity.. (but)
low-level vocational training has a terrible record in improving wages or productivity’ (ibid., p. 22);
• Fewer than half of companies provided any training at all, the non-providers being mainly SMEs. Of
those who did provide training, only 19% used Information Learning Technology (ILT) (George and
Cooper 2001);
• The biggest issue raised in the CBI survey (2001) was competitiveness requiring both workforce
and management skills (pp 10-11). Compared with the previous year, more were financially
supporting independent study (72%), giving time off for independent study (64%) and ‘training
beyond the needs of the current job’ (62%) (p. 12). Employee development programmes had been
introduced by 60%, but only 23% included careers advice; and only 5% had literacy/numeracy
programmes. Overall, employer training provision in the sample had increased for the third
successive year, with the biggest rise in e-based provision.
The overall picture shows a preponderance of on-the-job training of the highest qualified employees;
amount of training and especially off-the-job training increasing with size of firm; some attention paid
to generic skills but little to basic skills. Those most likely to receive training are full time, highly
qualified, in high level occupations, in large firms, younger and female: ‘There does not appear to be a
training culture for a large number of employees, and what training there is focused more on younger
workers’ (Labour Market and Skill Trends 2000, p.52). Part-time workers, ethnic minorities, people
17
with no qualifications and, in smaller firms, women are generally below average in skills and in amount
of training received (Devins et al. 2000).
Those who reported skill gaps to the ESS were the most likely to engage in training and to train more
of their staff, so recognition of skill gaps is a factor in training. A large minority, however, blamed the
lack of training they provided on shortage of time, funds and cover for trainees (Hogarth & Wilson
2001). Other barriers to staff development include supply of appropriate courses and finding those that
exist and, in a few cases, employee resistance (Tamkin & Hillage 1997). These barriers are
particularly intractable for small firms which, furthermore, are often unaware of or unconvinced of the
value of training, do not know what opportunities are available, are short of time and money (training
costs per employee are higher) and are afraid of losing staff if they give them training. Where training
is given by small firms, it is likely to be on-the-job training (CBI/TUC n. d.).
4.1.2 Post-compulsory learning provided by the educational system
Lifelong Learning Targets 2002 for adults (that is, aged over 18 and in the labour market) in England
envisage 50% having at least NVQ level 3 equivalent and 28% should attain level 4 or above. Good
progress is being made towards these targets, although there are regional variations.
Colleges of Further Education (FE) supply both academic and vocational qualifications. Vocational
courses are supposed to be flexible in order to meet the needs of employers. FE students are aged 16
to adult and attend either full-time or part-time. In England there are five types of FE college:
agricultural/horticultural; art, design and performing arts; general and tertiary; sixth form (mainly
teaching GCE A levels); and specialist designated institutions (mainly for adults). In 1997-8 the FE
sector in England had almost four million students enrolled, a 1% increase on the previous year. About
a third of those on Further Education Funding Council (FEFC) programmes went on into HE in 1998.
Basic skills tuition is provided mainly by FE (60%), with local education authorities (LEAs) providing
20% and prisons 11% (Labour Market Quarterly Report, February 2001).
The proportion of young people entering HE (in universities and colleges of higher education but also
in some colleges of FE) rose from 15% in 1988 to 34% in 1997, but fell back to 31% in 1998 when
tuition fees were introduced. Entry to HE is usually via GCE A-level but there are also vocational
qualification routes such as the Edexcel (ex-BTEC) and the Advanced General National Vocational
Qualification. There is also the route provided by the Open University, which has no entry
requirements and delivers higher education to a large number of part-time students who study at a
distance. University extra-mural departments, also serving part-time students, have increasingly had
to include accredited courses in their curricula and systems of credit transfer mean that a student can
accumulate credits towards a degree from different higher education providers.
There has been a slight increase in the proportion of full-time students attaining high level degrees (I
and II(i)) (Labour Market and Skill Trends 2000). In universities like that of Glasgow, every student,
whether full time or part time, must obtain a certificate in IT before they are allowed to graduate. There
is a general increase in the number of courses with a vocational element, for example, computing,
business, design, but a fall in the number of engineering, mathematics and physics graduates
(Campbell et al. 2001, p. 59).
4.2 Concerns about quality
By 1999, there was a big increase in the attainment, to 75%, by 19-year-olds of qualifications at level 2
or higher, but this is short of the National Target for 2002 of 85%. In the same year, 54% of 21-year-
olds had attained level 3 or higher, but this is below the 2002 target of 60% and is unlikely to be
reached (Labour Market and Skill Trends 2000). It is thought that there ‘still seems to be confusion
about how best to develop generic skills’ (National Skills Task Force 2000b, p. 139). There are,
moreover, concerns about and recommendations for various parts of the education system that have
been published by researchers:
Basic skills. Research into the teaching of adult literacy found students making limited progress.
There is a need for substantial improvement in professional development for literacy teachers (Brook
et al.2000). The use of ICT in basic skills training has proved effective both for students and teachers,
and could be more used (Learning and Skills Network, August 2001).
English for speakers of other languages (ESOL). There is a need for ESOL teachers better to
understand employers’ skill requirements. English language teachers had lower expectations than
18
other teachers of the level required for employment; most ESOL provision is for low-level language
skills; and the great majority of ESOL speakers who accessed FE, adult training or the New Deal
programme acquired either no qualifications or qualifications only up to Level 2. More intensive
language support for ESOL speakers is needed (Schellekens 2001).
Schooling. A comparative study concluded that the teaching of mathematics in England is responsible
for the lower level of maths skills found here compared with Japan (Whitburn 2000). An Office for
Standards in Education (OFSTED) report (2001) states that most teachers in England did not
complete ICT training and even those who did so did not make the most effective use of ICT for
teaching. Although pupils had improved in ICT, their standard was lower than those of other subjects;
there was wide variation between schools; and half of all secondary schools did not meet the
requirements of the national curriculum for IT. More support is needed for schools in their ICT
development planning (OFSTED 2001). Overall, however, the Institute for Fiscal Studies found that
academic, especially school-based, qualifications were much more valuable than low-level vocational
training in enhancing company productivity (Financial Times 2001, p. 22).
Further Education (FE) and training. A survey of FE provision of engineering courses found, inter alia,
that despite requests from the industry few departments were delivering the key skills of problem-
solving, working with others and improving their own learning and performance (Further Education
Funding Council 2000). One survey found that FE staff skills are in short supply and many had no
recent experience in industry. A ‘more systematic approach to updating the skills of FE staff’ is needed
(Brookes and Hughes 2001). Most tutors are part-time and female, well qualified but little involved in
staff development (Labour Market Quarterly Report, February 2001). The CBI/TUC (2001) report
states that FE colleges do not always have up-to-date equipment for training or provide courses that
meet employers’ needs.
Higher education (HE). Although graduates arrive with skills such as information handling, problem
solving and other generic skills, they often lack work experience and commercial understanding. A
majority of employers of chemistry graduates said that it was the quality, not the quantity, of graduates
that was the problem, including ‘weak subject knowledge’, ‘lack of commercial understanding’ and
‘lack of work experience’. The problem for universities, however, is that they have a more diverse
student intake and less funding per student. It was recommended that university studies should
expand their employment-based training elements so that graduates go into jobs with work experience
(Mason 2000); key skills should be integrated into degree course modules (TRANSEND 2001); and
Higher Education Institutions (HEIs) should be able to access and use good-quality regional labour
market information (LMI) and work with regional partners such as Regional Development Agencies
(RDAs) (Maginn & Dench 2000).
A study of HND/graduate skills in art, design, media and related courses showed a need for career
management and enterprise skills, in particular negotiating, networking, self-confidence, self-
promotion, entrepreneurial skills and time management. These are even more important for the high
proportion who become self-employed (La Vall et al.2000). The authors state that a key finding of their
study of HND/graduate skills in art, design and media is the need for ‘more and better integrated
career advice and guidance activities’. Furthermore, skill development and career preparation need to
be integrated into the course early on, despite the problem of an already overcrowded curriculum.
Careers guidance A recent study (November 2000) found that employed adults who received careers
guidance were much more likely to take up education and training, and twice as likely to obtain a
qualification thereby, than those who did not receive such guidance (Killeen & White 2000).
Given the shortage of engineers and the over-representation of men in the profession, ‘careers
advisers should encourage school pupils, students and job seekers to consider a wider range of
possible careers. Employers and professional organisations should collaborate to develop recruiting
and working practices to encourage applications from under-represented groups’ (EOC 2001).
Careers advice for disadvantaged and alienated young men should be ‘based on a proper assessment
of their skills and aspirations rather than on stereotyped perceptions’ (Meadows 2001).
Despite some improvements since 1998 in career education and guidance in schools, Morris et al.
(2001) found that there were wide variations in the amount and quality offered: only 18% of careers
co-ordinators surveyed were ‘very satisfied’ with their school’s provision and good practice was
evident in just under one-thirds of schools surveyed. A renewed focus on disadvantaged students has
tended to reduce provision for the ‘average and more able students’.
19
Employee Development Schemes. These have proved to generate participation in education and
training, especially among employees with few qualifications and skills levels (Maguire et al. 2000), but
except where they combine to provide such a scheme are generally out with the capacity of SMEs.
General A survey into recruitment practices found that employers experienced recruitment difficulties
because many candidates lacked experience or technical skills and made excessive pay demands
(Chartered Institute for Personnel and Development [CIPD] 2001).
4.3 Links between employers and providers of learning
‘Promoting interactions with industry and commerce is a key strategic aim in order to transfer
knowledge and expertise and enhance the relevance of programmes of teaching and research to the
needs of employers and the economy. It is also important that the outputs of the HE sector inform
policy development at all levels of government’ (Labour Market and Skill Trends 2000, p.49).
Such interactions certainly need promoting. Skills shortages arise partly because employers and
employees have only a weak influence on learning and skills provision (NTO National Council 2001).
This may be partly because some employers are unaware of all the options. In May 1998 NTOs were
launched as ‘owned and driven by employers’ and one of their priorities was to act on skill needs and
shortages; but a representative sample of 3,507 employers in September/October 1999 who were
asked who they would contact concerning training and skills found that only 7.5% mentioned NTOs
without being prompted. When prompted, a further 30.1% had heard of them or of their predecessors,
the Lead Bodies. Only 31% of the employers who were aware of NTOs (12% of the whole sample)
had some idea of their role and some had misconceptions. Those most likely to be aware of them
were larger (200+ employees), in construction or finance, in Wales and North-East England,
headquarters, involved in the IiP, using recognised quality standards and with a training plan and
budget. The least likely to be aware of NTOs were smaller (under 10 employees), in transport/storage
or wholesale/retail, on Merseyside or in Northern Ireland. NTOs also suffered in that employers were
generally unwilling to fund them and most employer support was in staff time (Grover et al. 2000).
NTOs themselves come in for criticism, although they have improved. Most were found to have poor
knowledge of their sector, including the number of micro-firms and SMEs, the take-up of NVQs, IiP
etc. Although 60% of board members were employers, only 10% of the board were employers with 20
or fewer staff. Few had or used statistical data and LMI expertise was usually bought from consultants.
NTOs were often small, with around half having five or fewer directly employed staff. Finally they had
not formed strong enough partnerships with TECs, RDAs or training providers (Siora & Chiles 2000).
Several surveys on links between employers and educational providers make gloomy reading:
• A study in North East Wales (North East Wales Institute of Higher Education 1999) found that,
similarly to a previous national study, SMEs were reluctant to buy services from FE/HE. This was
because HE/FE does not see such provision as a core activity and SMEs tend to see FE/HE as
‘fragmented, inflexible, uncoordinated, amateurish and academic’ with little relevance to industry;
• Embleton et al. (1999) evaluated 24 Training and Enterprise Councils (TECs) and Chambers of
Commerce, Training and Enterprise (CCTEs), one of whose functions was to help match skill
needs and education/training provision in the local economy. The aim of the evaluation was to see
how TECs/CCTEs used economic intelligence to make decisions and influence services. Some of
the findings were that workforce issues were dealt with very variably; there were wide variations in
research staffing and budget; there was often very high staff turnover; very little effective evaluation
was carried out; and there was too little fruitful interaction between researchers and planners;
• In the IFF Research Ltd (2000) survey, only one third of employers had links with schools, colleges
of further education (FE) and national training organisations (NTOs) with a view to helping meet
their longer term skill needs;
• Research into the ESF Objective 4 projects found a perception that these were ‘supply-led, driven
more by the interests of the training providers than by the needs of businesses within the region’
(Devins et al. 2000). Evaluation was either not carried out or limited to assessing the degree of
satisfaction with the learning. Only half checked that new learning was being applied in the
workplace and only 16% assessed whether productivity had increased;
• Only 7% of FE income comes from business and they do not market their services to employers
sufficiently (CBI/TUC 2001);
• The CBI (2001) survey found that 57% had links with HEIs and 39% with secondary schools but
only 15% with primary schools - but it was the bigger firms that were more likely to have such links
and the respondents were biased towards bigger and more proactive firms;
20
• In early 1999 Learning Partnerships were set up nation-wide with the aim of collaboration between
providers of post-16 learning, including schools, FE, work-based learning (WBL) and adult and
community learning. The first interim report, based on a review and analysis in May 2001, found
that most Learning Partnerships were ‘still struggling with the role that employers might play’ in the
Partnerships and they had not yet improved the situation for learners and employers (Rodger et al.
2001);
• Devins et al. (2001) found that employers need training to ‘recognise training needs, articulate
them, source appropriate training and to evaluate the intervention’, and recommend the provision
of such training;
• The CBI/TUC (2001) submission stressed that colleges and firms need to work together so that
supply meets demand;
• Davies et al. (2002) found “considerable potential for the further development of improved links
between local as well as national employers and HEIs”.
This lack of synergy between employers and educational providers is a major factor in perpetuating
the skills mismatch in the United Kingdom. For this reason, the NTOs will no longer be recognised by
government after March 2002 and Sector Skills Councils (SSC) are to be set up by employers to
identify skills shortages and deliver action plans. Some SSCs will cover more than one sector, but it is
not expected that every sector will have an SSC; those without one will be served by the new Sector
Skills Development Agency (SSDA). The SSCs are expected to work with organisations such as trade
unions, RDAs, the Connexions Services and the Learning and Skills Councils (LSCs) (Newscheck
2001[a], p. 3). Grover et al. (2000) found that NTOs generally communicated with firms by mailshots
or letters, but the researchers recommend more targeted approaches, using direct mail, phone, fax
and face-to-face. This would apply to the successors to the NTOs.
Two examples of initiatives to attempt to deal with the mismatch of skills are the creation of the
Scottish Management and Enterprise Council (SMEC) in 1999 and of the Engineering and Technology
Board (ETB) in 2002.
• SMEC was set up to forge links between employers and learning providers in the field of
management education. Its initial report focuses on the issues of information and advice about
courses, course content, quality and qualifications structures; employer and employee attitudes to
further learning; training needs analyses; and funding. SMEC “has received support from the
Scottish Executive to map the current provision of management development training in Scotland
as an aid to employers and individuals, including small- and medium-sized enterprises” (Alexander
2001, S1W-19146).
• The ETB aims to increase the number of entrants to engineering and technology; ensure that initial
education is appropriate to the skills needed; and to institute better processes for lifelong learning
in engineering and technology (Newscheck Dec 2001, p. 4).
5. Recommendations and action plans published

The recommendation that ‘managed migration’ would help fill the UK’s skills gap (Glover et al.2001) is
one that raises both practical and ethical questions. Most recommendations and action plans focus on
the existing labour force and aim to change systems and initiate ways to encourage learning and
upskilling.
3
The education system is seen as having the following roles in meeting skill needs :
• Improvement of standards in schools, FE, HE, in-work training and training for the unemployed;
• Promotion of key skills among young people;
• Improvement in careers information;
• Reform of the vocational training system to ‘raise its status and profile’;
• Setting of National Learning Targets from age 11 to adult;
• Improvement in basic skills programmes.
3 Labour Market and Skill Trends 2000
21
The National Skills Task Force (2000a) saw as one of the priority areas the foundation learning
system and the need for more young people to obtain level 3 qualifications. Their proposed agenda
included:
• An action plan to improve the supply of skills;

• Management of post-16 education and training in order to minimise future skills gaps;
• Setting of targets and performance measures in matching supply and demand.
They recommended:
• Improvement in early and adult careers advice and guidance concerning the requirements of ‘real
jobs’;
• A marketing campaign for courses;
• Employer Learning Networks;
• Tax credit for firms which obtain Investor in People (IiP) status (that is, improve training);
• Equalisation between the conditions of education and training;
• A campaign to enhance the image of ICT careers.
The DfES is now developing an ESOL strategy, based on recent research reports (including
Schellekens 2000). This strategy recognises the diverse needs of those whose first language is not
English and aims to give them ‘access to high quality, relevant English language provision leading to
nationally recognised qualification’. So far the following developments have taken place:
• A national core curriculum for ESOL;

• Intensive teacher training in the new curriculum;
• A support pack for teachers of refugees and asylum seekers;
• A new Qualifications and Curriculum Authority (QCA);
• New ESOL qualifications.
Tenders are being accepted to develop diagnostic assessment tools, develop ESOL learning materials
for the new curriculum and set up a national research and development centre for literacy, numeracy
and ESOL. In addition, the Department for Work and Pensions (DWP) will pilot short courses to help
refugees and others with ESOL needs to find employment. Such courses will include the new ESOL
curriculum, geared for work situations, vocational and IT skills, work experience and coaching in the
United Kingdom labour market (Skills and Enterprise Network Update, August 2001, pp 4-5).
To reduce duplication among the many agencies and bodies which collect and use LMI, the Skills and
Economic Intelligence Working Group has been set up, to develop a framework for: training the LMI
community; harmonising terminology and methodology; disseminating and using findings.
The CBI (2001) found 81% of SMEs responding favoured a ‘one-stop shop’ for information on
training and funding for training, perhaps through the Small Business Service. Other ideas included
clusters of SMEs and support from larger firms in the supply chain. These training clusters should be
assisted in forming links by the LSCs, Business Links advisors, trade unions and NTOs/SSCs.
The CBI/TUC (n. d.) submission offered to publicise the problem of basic skills, spread awareness of
the benefits of training and disseminate good practice via case studies. They advocate a Basic Skills
Champions Group including the CBI, the TUC and the government to raise the awareness of
employers and unions concerning literacy and numeracy, to spread knowledge of workable solution
and to show employees that help is available. They felt that government should:
• Make vocational qualifications more accessible;

• Instruct the QCA to make it easier for organisations to support and assess NVQs;
• Rationalise the confusing range of skills programmes (over 40);
• Raise the quality of training providers;
• Improve advice and guidance;
• Give tax credits to employers (including public and voluntary organisations) involved in basic skills
education and training up to level 2, and to small organisations to get IiP status;
• Provide ‘incentives for individuals’ (p. 3).
22
The state should continue to be responsible for the education and training of the young but should
also help disadvantaged adults. People over the age of 25 should get free education and training up
to level 2. The responsibility for the education, training and development of employees in order to
meet business needs and the long-term development of the workforce rested with employers; but
employees should be responsible for their employability and development beyond their current job
(CBI/TUC 2001).
Mentoring arrangements should be developed within companies for as many Modern Apprentices
and National Trainees as possible (QPID 2000, p. 8).
Work-based learning (WBL) should be used more (NTO National Council 2001).
Many graduates would benefit from full-time volunteering during a gap year as this can equip them
with the generic skills many employers feel they lack (Newscheck 2001[b], p. 14).
6. Government initiatives to address the skills problem

‘The key to having a large, highly-skilled labour force lies with well-planned and managed education
and training systems ... (to) improve the quality of and access to education and training, and through
firms and individuals striving to better their skill levels’ (Labour Market and Skill Trends 2000, p.28).
The issue is taken very seriously by the United Kingdom government, as witness the large number of
publications, action plans and initiatives. Some of these are targeted at the unemployed. The highest
rates of unemployment are among the unskilled (12.4%) and the partly skilled (7.9%), compared with
an overall unemployment rate of 6.1% in 1999. Groups with above average employment rates include
those with no qualifications (12.4%), lower vocational qualifications (8%) and no more than ‘O’ level or
equivalent (6.5%) (National Skills Task Force 2000b).
The need for strong incentives is demonstrated by Institute of Employment Studies research on the
New Deal for the over-50s which found that ‘few unemployed older workers are accepting its offer of
training grants (…) worth up to £750 each.’ Nearly half of those eligible felt that they did not need new
skills for the jobs they wanted, or they did not know what training they needed or how to get it.
th
Similarly, few low-paid workers applied for grants (Financial Times, 14 November 2001).
Initiatives include:
6.1 Organisations and services
Learning and Skills Councils (LSCs) - these replaced the Further Education Development Agency
(FEDA) and the Training and Enterprise Councils (TECs). The main LSC and the local ones (based on
Local Learning Partnerships) are responsible for providing education and training for over five million
learners, meeting skill shortages and developing the workforce.
National Training Organisations (NTOs) - these were employer-led and each covered an industrial
or commercial, public or occupational sector. Their functions included ‘advising government on
education and training; skills foresight, including LMI; the development of National Occupational
Standards; Modern Apprenticeship Frameworks; and guidance on National Traineeships and for skill
seekers in Scotland’ (Labour Market and Skill Trends 2000, p.63). Now replaced by Sector Skill
Councils.
Regional Development Agencies (RDAs) - these are business-led and include the co-ordination of
the work of regional and local partners in training
Connexions - a service, including guidance and support, aimed at young people, to persuade them to
take qualifications
learndirect - free, impartial information and advice telephone help line for all, on learning and careers
opportunities - now part of UfI (see Bysshe & Parsons 1999 for a very positive evaluation of
learndirect)
University for Industry (UfI) - apart from learndirect, its functions include organising the provision of
‘taster’, refresher and full-time courses, with a focus on basic skills and IT. Learners will be able to
take such courses at home or through learndirect centres in colleges, libraries, community and
shopping centres.
23
6.2 Funds
Education Maintenance Allowances - this initiative, currently being piloted, is the payment of
allowances to help low-income families keep their children in school after the Minimum Leaving Age
(MLA), which is sixteen.
Adult and Community Learning Fund - for disadvantaged areas, managed by the Basic Skills
Agency and NIACE.
Career Development Loans - to help initially unemployed people pay for courses
Individual Learning Accounts (ILAs) - a contribution of £150 towards the cost of a ‘vocationally
relevant’ course - broadly aimed at people in work (this scheme has now ended but may be re-
introduced)
Small Firms’ Training Loans - deferred repayment loans for firms with fifty or fewer employees
Union Learning Fund - ‘to support projects which will build union capacity to promote learning,
especially by encouraging and supporting learners’ (Labour Market and Skill Trends 2000, p.67)
6.3 Schemes for the unemployed
New Deal - the education/training option for unemployed people (now extended to older people)
Work Based Learning for Adults (over 25) - includes Basic Employability training for those without
work experience, work discipline and basic skills; occupational training, for ‘clearly identified needs
within the local labour market’ (Labour Market and Skill Trends 2000, p.66); and employed status
training
6.4 Schemes for young people
Right to time off for study or training - for young people aged 16 or 17 with no or low qualifications,
in any sized firm, working part-time or full-time, with state financial help to their employers
National Traineeships - whereby young people (aged 16-24) go into work and receive education and
training to level 2. Both of these were designed by employers and include training for specific tasks
and broader skills such as IT, problem solving, communication skills and team working.
Modern Apprenticeships - similar to National Traineeships but education and training is to level 3 -
primarily for technician, supervisory and craft-level skills.
Advanced Modern Apprenticeships - last a minimum of three years and go to NVQ levels 3 / 4
(equivalent to between GCE A Level and first degree). It includes vocational education and key skills.
A person who has completed this can use it to gain entry to HE. The cost to the employer is about
£50,000. The state contributes around £12,000 of this where the apprentice is aged 16-19 and £6,000
for 19-24 year olds, but nothing for older people.
Graduate apprenticeships - integrating higher level study with structured WBL
6.5 Qualifications and awards
Entry level qualifications - a new tier, below level 1
Key Skills Qualifications - communication, application of number and IT
Investors in People (IiP) - awarded to firms who can argue that they provide training and career
development opportunities to their staff, in pursuance of their business aims
National Vocational Qualifications (NVQs) - work-related qualifications, from levels 1 to 5. Level 3 is

equivalent to A-level, that is, qualifications taken at the age of 18 which allow entry to higher
education. Level 4 is equivalent to university degree level studies; and level 5 is equivalent to post-
graduate degree level studies.
24
General National Vocational Qualifications (GNVQs) - taken in some schools and colleges -
equivalent to General Certificate of Education.
Quality Assurance of Higher Education - to assess quality of provision and of standard-setting and
to set benchmark standards for degrees in each subject
6.6 Targets
National Learning Targets - for young people and adults
Qualifications Framework - to accredit ‘all academic, vocationally-related and occupational

competence qualifications’ to a single framework, to help parents, students and employers understand
progression from one to the other and between levels (Labour Market and Skill Trends 2000, p.65).
7. Expert interviews
There is a large amount of literature on this topic so only two interviews have so far proved necessary,
and these in order to choose a second sector to research: with the Confederation of British Industry
(CBI) (London), and with the Engineering Employers’ Federation (EEF).
7.1 The CBI
The CBI is one of the most influential employers’ federations in the United Kingdom. It has offices in
every region. The interview was held at the London office.
On being asked about the skills mismatch in London and the south-east, the CBI representative stated
that the most relevant sector is engineering, especially electrical engineering. The engineering sector
contains many SMEs and a wide range of skill levels. There is such a shortage of skills that employers
will be willing to be surveyed - but employers in general are resistant to investing in the training of the
low-skilled and prefer the medium level (3). This is despite anecdotal evidence that a focus on skills
from basic to level 2 increases productivity.
th
A survey of the appointments in the Businessfile section of the Sunday Telegraph, 9 December 2001,
confirmed this view.
• Job advertisements
− Engineering and construction: 66 (of which 24 in London and the South-East)
− Other: 76 (of which 31 in London and the South-East)
• Small advertisements
− Engineers, 4.5 columns
− Other, 5.5 columns
This is significant given that the UK economy is overwhelmingly based on the tertiary sector.
7.2 The Engineering Employers’ Federation (EEF)
The EEF deals predominantly with employment relations, including the law, the application of the law
and general good practice. It advises on recruitment, health and safety, education and training,
redundancy and grievance and disciplinary matters. The advice and guidance available from the EEF
is aimed at avoiding involving the law by ensuring that employer practice is sound.
It has about 6,000 member organisations in thirteen regional associations. The membership fee is
based on the payroll rather than on the number of employees. Most members are in or connected with
engineering but a significant proportion are charities, further education providers, retailers and so on,
who join for the employment advice service.
The Education and Skills Department of the EEF represents the views of members and gives them
help and advice. It also influences policy in areas such as Modern Apprenticeships. It works closely
with EMTA, the National Training Organisation (NTO) for Engineering Manufacture, whose role
includes career guidance and the supply of LMI. The EEF collects information on skills from its
members and collates its data with that of EMTA.
25
7.2.1 Shortage of skills in the engineering sector
Both electrical and electronic engineers are in short supply.
Skills that are in short supply include vocational and key skills, such as leadership, management, team
working (both in hierarchical structures and with peers), communication and managing change.
Furthermore teams can be multi-cultural and multi-language, but few firms are prepared for this. There
is a Leonardo project on modern apprenticeships which is looking at this issue.
Some firms have poor advertising and recruitment policies so are unable to attract enough suitable
candidates.
Older people who leave engineering do so for a number of reasons: their skills become redundant,
there is a lack of re-training by employers and those who have suffered redundancy may decide to
enter a sector which appears to be more secure. For those who wish to re-skill, there are insufficient
funds (see below concerning modern apprenticeships) and some older people either do not wish to re-
train or see the necessity to do so. So flexibility and openness to change are valuable attributes.
7.2.2 Education and the engineering sector
Initial education
The low number of maths graduates has led to a shortage of specialist maths, science and design &
technology teachers and much of this teaching is carried out by non-specialists. Many primary
teachers in particular lack confidence in their ability to teach these subjects. Maths, science and
design & technology and engineering require competent and enthusiastic teachers. Maths and Design
and Technology teachers are currently offered ‘golden hellos’ to encourage them to enter the
profession, in recognition of the current shortages.
Teaching engineering is more expensive than most other subjects and is often not taught to 14 year
olds, so they have little access to engineering qualifications. Engineering is a complex subject, and
highly resource intensive (requiring access to machinery, design tools, materials, etc).
A small-scale survey of 15/16 year olds found that their principal sources of careers advice were
parents and teachers, with career advisers at the bottom of the list. Teachers do not usually
encourage vocational pathways and prefer to steer ‘bright’ students towards the general academic
route. If teachers promote the sector it is to low achievers, but intelligence and aptitude are needed.
Thus there is an emphasis in schools on academic qualifications at the expense of vocational. For
example, the GNVQ part 1 in Engineering, taught mainly by Design and Technology Teachers, is
being replaced from September 2002 by a new GCSE, in order to increase take-up (EEF and EMTA
were involved in developing the teaching materials for the GNVQ, and have been developing support
materials for teachers and students to assist in the delivery of the new GCSE).
The 14-19 Green Paper is due soon but a new curriculum cannot be delivered by teachers or schools
in isolation. Many large firms (e.g. BAE Systems) already work with local schools. It remains to be
seen if teachers would accept FE/HE lecturers and engineers coming into their schools.
One way forward is through the new specialist schools which are obliged to form partnerships. The
EEF is partnering three schools, which aim to specialise in engineering, from September 2002. All
specialist schools will have to teach the full curriculum but receive extra funding to develop their
specialism.
Higher education
Entrants to Higher Education engineering courses too often do not have good enough maths skills.
Graduates usually lack knowledge of business, for example, the supply chain process. SMEs, which
dominate the sector, do not have a history of recruiting graduates and graduates tend to look for
employment in large companies. Some engineering graduates find other sectors more attractive, as
engineering is dominated by a few large firms, which are difficult to get into, and a million very small
ones which appear too risky.
26
7.2.3 Training by employers
A large proportion of owner-managers have no qualifications themselves, left school at 16 and see no
need for formal training. SMEs often have no HRD or training personnel. Nevertheless, the statistics
for training, which show that SMEs carry out insufficient training, are based on off-the-job training. If
on-the-job training and experience are taken into account the picture looks rather different. Over their
first three years SME employees have to develop a range of skills because they have to cover a range
of jobs, and much training is informal and therefore not counted - in fact, it is true work-based learning.
It tends to be good employers who join the EEF. The most popular courses offered by the EEF are on
Health and Safety, employment law and team leading.
The Advanced Modern Apprenticeship
This is a very demanding programme. It lasts a minimum of three years and goes to NVQ levels 3 / 4
(equivalent to between Advanced Level and first degree). It includes vocational education and key
skills. A person who has completed this can use it to gain entry to Higher Education.
The cost to the employer is about £50,000. The state contributes around £12,000 of this where the
apprentice is aged 16-19 and £6,000 for 19-24 year olds, but nothing for older people.
7.2.4 The image of engineering
Engineering has changed from a dirty job to one which is high-tech and innovative, but it is still seen
as one which is men’s work, hard, dirty and low skilled. This arises from a misunderstanding of what it
really is. As a result few women or people from ethnic minorities go into engineering. Young people
tend to be swayed by their parents’ opinion; and some parents cannot read English as their first
language, and most careers information is written in English.
Another factor that sullies the image of engineering is the perception that the sector is characterised
by job losses and is in terminal decline. This is because the public conflates engineering with
manufacture, which has contracted significantly. What the media does not point out is that most of the
redundancies are suffered by people with no or low skills, and there is still a shortage of skilled
workers.
What is engineering? According to the SIC code engineers ‘design, make and build’. They are
therefore a vital part of manufacturing. In fact, qualified engineers also work in utilities, retail, the public
sector, environmental agencies and so on.
7.2.5 Recommendations by the EEF on education and training
Initial education
Schools should offer vocational qualifications to students who have the aptitude and aspiration to do
them.
People who are skilled in training for the engineering profession should be brought in as teachers or to
provide specialist support. Children would be excited by hearing about work in progress and the latest
developments and by seeing computer simulations. Engineering trainers are often inspirational
teachers and could inspire children.
The mainstream curriculum could incorporate without difficulty the engineering perspective, for
example, the history of the industrial revolution. This might encourage some children to use their
education in one of several ways: to take the Higher Education route into engineering; to take up a
modern apprenticeship in engineering; or to develop an understanding of the contribution of
engineering and thus redress its poor image.
Resources for teaching engineering in schools should be increased.
Careers information on engineering should be produced in Hindi, Punjabi, Gujerati etc. so that children
can give parents whose English might be limited information to read.
Engineering companies should be positively encouraged by schools to give careers talks.
27
Higher education
To compensate for the inadequate maths skills of some HE entrants to engineering courses, a
foundation year could be added (similar to that taken by medical students without the requisite science
A levels).
Extend the Year in Industry scheme so that more engineering graduates have work experience in the
sector. In 2002, 800 ‘gap year’ students entered this scheme, which gives them the chance to
assemble a portfolio which may qualify them for a business award.
Encourage further development of ‘sandwich courses’ in higher education, which incorporate high-
quality, relevant, longer-term (6-12 months) work experience while at university.
Work-based learning
Mature modern apprenticeships should be available for employees whose skills have become
redundant. Currently there is no advanced modern apprenticeship (AMA) funding for them if they are
aged 25 or over.
7.2.6 Hope for the future?
There are signs of an improvement in mathematical and science performance in schools in England.
The PISA 2000 survey for the OECD found that 15 year olds were significantly above the OECD
average, and only Japanese and Korean pupils performed better on average (OECD 2001, p. 79). The
survey found overall that even socially disadvantaged pupils benefited from schooling with sufficient
resources and specialist teachers (DfES 2001b).
8. Summary and conclusion

The United Kingdom currently enjoys a high level of employment. A significant proportion of this
employment is part-time and/or temporary, with women accounting for the bulk of this ‘flexible’
employment. The majority of firms are very small, without employees, and almost half of all employees
work for SMEs. In all sizes of firm, however, technological change, changes in work practices and
increased competition present challenges for employers.
The great majority of employment is in the service sectors, where the skills needed tend to be very
diverse. Several kinds of skills can be conceptualised, although there is some overlap between them:
• Basic skills (literacy, numeracy, oral communication);

• Occupationally non-specific skills (also known as core skills, generic skills, key skills, transferable
skills);
• Job-specific skills, such as driving, computer operating, conveyancing, systems analysis.
The shortage of such skills has led to both skill gaps and hard-to-fill vacancies, reported by a minority
of employers but still a significant number, given the size of the British economy. Skill gaps are found
in a range of occupations and sectors, as are recruitment problems. More SMEs than large firms
report skill gaps and/or difficulties with recruitment.
Reasons for the shortage of skills include:
Relatively low skill levels in the working age population
• A relatively high rate of deficiency in basic skills among the population;

• A generally low, though rising, level of educational attainment among the population;
• Large numbers of people in disadvantaged groups, such as lower social class, immigrants, older
workers and young people with particularly low educational attainment or opportunity;
• The difficulty for many low-skilled adults of attending courses.
Quality issues in education
• The inadequacy of some teaching, particularly in basic skills, ESOL, mathematics and ICT;
• Inadequate supply of appropriately trained teachers for literacy, ESOL and further education.
28
Training issues
• The reluctance or inability of the many small employers in particular to offer training;
• The scarcity of employee development schemes and their relative inaccessibility for SMEs;
• The tendency for training opportunities to be focused on those who already have qualifications and
the relative neglect of workers with no/low skills or education.
Poor synergy between employers and educational providers
• Inadequate links between employers and providers of education and training;

• Inadequate recognition in the educational system of the needs of employers.
Guidance issues
• The inadequacy of much schools career education and guidance;

• The difficulty for workers in accessing vocational/educational guidance;
• The need for greater knowledge of and access to LMI.
The engineering sector is having particular difficulty in finding skilled labour, and the importance of this
should not be undervalued. Engineers of various specialisms and skill levels work not only in
manufacturing and construction, but also underpin the activities of many service industries.
There are theoretical and methodological problems in that qualifications are used as a proxy for skills,
and yet many workers have skills which are not accredited. For example, only two-fifths of ‘taught
learning episodes’ are for credit, so skill levels are probably under-estimated (Campbell et al. 2001, p.
59), as is the amount of learning acquired through self-teaching (La Valle 2001). Informal learning in
the workplace is defined as “learning which takes place in the work context, relates to an individual’s
performance of their job and/or their employability, and which is not formally organised into a
programme or curriculum by the employer”(Dale & Bell 1999). It can be very valuable but rarely
accredited.
Nevertheless and judging from low levels of productivity, it does not appear that leaving education and
training to the market is working. A range of initiatives to stimulate greater investment in human
resources and take-up of learning opportunities is used in different parts of the world and lessons can
no doubt be learnt from these (see Hillage & Aston 2001).
The role of education and training in the skilling and re-skilling of the workforce over the next few
years is paramount. Nevertheless, a report from the DfES and the LSC predicts that six occupational
groups will account for up to four-fifths of new jobs, and yet working adults spend relatively little time
th
on training (Financial Times, 14 November 2001, p. 2). The implications for the future if present
trends persist are, therefore, worrying.
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31
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Useful web sites
TRANSEND Project, University of Surrey transend.cpe.surrey.ac.uk

Association of Graduate Recruiters www.agr.org.uk
The Basic Skills Agency www.basic-skills.co.uk
Confederation of British Industry www.cbi.org.uk
Charted Institute of Personnel and Development (CIPD) www.cipd.co.uk
Cranfield School of Management www.cranfield.ac.uk/som/rci
Recruitment Confidence Index
Includes case studies of good practice by employers www.dfee.gov.uk/agediversity
DfES portal site www.dfee.gov.uk/datasphere
Good practice guides on learning, education www.dfee.gov.uk/gpsnet
and training provision
Data on local education and employment issues www.dfee.gov.uk/inyourarea
Department for Education and Employment (DfEE), www.dfee.gov.uk/research
now the Department for Education and Skills (DfES)
DfEE Skills and Enterprise Network www.dfee.gov.uk/skillnet
- information on the latest research
Details of all National Studies on employment www.dfee.gov.uk/studynet
and training provision published since 1996
Statistics from the Department for Education and Skills www.dfes.gov.uk/statistics
Full text of the White Paper www.dti.gov.uk/opportunityforall
Opportunity for All in a World of Change
Edexcel is one of the leading examining and www.edexcel.org.uk
awarding bodies in the United Kingdom. It
provides a wide range of qualifications
including GCSEs, GCE AS and A levels;
GNVQs, BTEC First, National, and
Higher National Certificates and Diplomas;
NVQs; Key Skills and Entry Qualifications
and specific programmes for employers.
Edexcel qualifications can be taken in schools,
colleges, universities or in the workplace.
Engineering Employers Federation www.eef.org.uk
Employment Studies www.employment-studies.co.uk/pubs
National Training Organisation for www.emta.org.uk
Engineering Manufacture
Engineering Council www.engc.org.uk
(this also lists professional institutes)
Women into Science and Engineering (WISE) http://www.engc.org.uk/wise
Equal Opportunities Commission www.eoc.org.uk
Advice for employers and managers on equality issues www.equalitydirect.org.uk
32
Engineering and Technology Board www.etechb.co.uk
(“One of the primary objectives of the ETB
is to start the reversal of the downward trends
in the supply of people (of all ages) with qualifications
and skills relevant to engineering and technology
based careers and jobs. The Life Long Learning
and Development Panel will advise on educational,
academic and skills issues.”)
Further Education Funding Council www.fefc.ac.uk
Home Office Research Development Statistics www.homeoffice.gov.uk/rds/index.html
The Industrial Society www.indsoc.co.uk
Eclipse Group Ltd www.irseclipse.co.uk
Joseph Rowntree Foundation www.jrf.org.uk
Manpower Employment Company www.manpower.co.uk
National Organisation for Adult Learning (NIACE) www.niace.org.uk
Government statistics on employment, population, www.nomisweb.co.uk
unemployment and Employment Service vacancies
National Training Organisation National Council www.nto-nc.org
OECD PISA 2000 survey www.pisa.oecd.org
PKF, research firm www.pkf.co.uk
Careers Service Unit www.prospects.csu.ac.uk
Small Business Research Trust, www.sbrt.co.uk
Open University Business School
Scottish Engineering www.scottishengineering.org.uk
Information on education, skills and LMI www.skillsbase.dfes.gov.uk
United Kingdom National Statistics www.statistics.gov.uk
South Yorkshire Labour Market Intelligence www.sylmi.org uk
Universities and Colleges Admissions Service (UCAS) www.ucas.ac.uk
Relevant bodies which collect and use information on skills and the economy
Learning and Skills Councils (local and national)

Department for Education and Skills (DfES)
Skills and Economic Intelligence Working Group (SEIWG)
Department for Work and Pensions (DWP)
National Institute for Adult and Continuing Education (NIACE)
Regional Development Agencies (RDAs)
Sector-based National Training Organisations (NTOs)
Sector Skills Councils
Other material
Employers Skill Survey
Blake, N, Dods, J and Griffiths, S (2000), Employers Skill Survey: Existing Survey Evidence and its
use in the Analysis of Skill Deficiencies. Sheffield: Department for Education and Employment
Bosworth, D, Davies, R, Hogarth, T, Wilson, R and Shury, J (2000). Employers Skill Survey: Statistical
Report. Sheffield: Department for Education and Employment
Sectoral case studies
Brown, A, Green, A, Pitcher, J and Simm, C (2000), Employers Skill Survey: Case Study - Health and
Social Care. Sheffield: Department for Education and Employment
Davis, C, Buckley, T, Hogarth, T and Shackleton, R (2000), Employers Skill Survey: Case Study -
Engineering. Sheffield: Department for Education and Employment
Dench, S, Hillage, J, Reilly, P and Kodz, J (2000), Employers Skill Survey: Case Study - Food
Manufacturing Sector. Sheffield: Department for Education and Employment
Hendry, C, Woodward, S, Brown, A et al. (2000), Employers Skill Survey: Case Study -
Telecommunications Sector. Sheffield: Department for Education and Employment
Rowley, G, Purcell, K, Richardson, M, Shackleton, R, Howe, S and Whiteley, P (2000), Employers
Skill Survey: Case Study - Local and Central Government. Sheffield: Department for Education and
Employment
33
Woodward, S, Hendry, C, Alport E et al. (2000), Employers Skill Survey: Case Study - Banking,
Finance and Insurance Sector. Sheffield: Department for Education and Employment
Official documents
Department for Education and Employment (2000), Opportunity for All: skills for the new economy.
Initial Response to the National Skills Task Force Final Report from the Secretary of State for
Education and Employment. Sheffield: DfEE Publications
Department for Education and Employment (2001), Opportunity and skills in the knowledge-driven
economy. A final statement on the work of the National Skills Task Force Final Report from the
Secretary of State for Education and Employment. Sheffield: DfEE Publications
Department of Trade and Industry (2001), Opportunity for All in a World of Change, A White Paper on
enterprise, skills and innovation. Summary. London: DTI and DfEE
Department of Trade and Industry (2001), Meeting the Sector Skills and Productivity Challenge.
Sheffield: DfES Publications
Useful publications
Labour Market Quarterly Reports. Sheffield: Skills and Enterprise Network

(www.dfes.gov.uk/skillnet/lmqrlink.shtml)
Labour Market and Skill Trends (annual reports). Sheffield: Skills and Enterprise Network
(www.dfes.gov.uk/skillnet/lmstlink.shtml)
Skills and Enterprise UPDATEs (quarterly digests). Sheffield: Skills and Enterprise Network
(www.dfes.gov.uk/skillnet/udlink.shtml)
Skills and Enterprise Executive (quarterly reports). Sheffield: Skills and Enterprise Network
(www.dfes.gov.uk/skillnet/execlink.shtml)
Skills and Enterprise Briefings (quarterly reports). Sheffield: Skills and Enterprise Network
(www.dfes.gov.uk/skillnet/publink.shtml)
Abbreviations
AVR Association of Graduate Recruiters
BCC British Chambers of Commerce
CBI Confederation of British Industry
CCTE Chamber of Commerce, Training and Enterprise
CIPD Chartered Institute for Personnel and Development
CSV Community Service Volunteers
DfEE Department for Education and Employment, now the DfES
DfES Department for Education and Skills of the United Kingdom Government (formerly DfEE)
DWP Department for Work and Pensions of the United Kingdom Government
EOC Equal Opportunities Commission
ESF European Social Fund
ESOL English as a Second or Other Language / English for Speakers of Other Languages
ESS Employer Skill Survey
ETB Engineering and Technology Board
FE further education
FEFC Further Education Funding Council, superseded by the Learning and Skills Council
GCE A level General Certificate of Education Advanced Level
GCSE General Certificate of Secondary Education
GNVQ General National Vocational Qualification
GSVQ General Scottish Vocational Qualification
HE higher education
HEI higher education institution
HND Higher National Diploma
HRD human resource development
IiP Investors in People
ILA Individual Learning Account
ILO International Labour Organisation
ILT Information Learning Technology
ICT Information and Communication Technology
IT Information Technology
LEA Local Education Authority
34
LFS Labour Force Survey
LMI labour market information
LSC+ Learning and Skills Council
MLA Minimum (school) Leaving Age
NALS National Adult Education Survey
NCDS National Child Development Survey
NIACE National Organisation for Adult Learning
NTO National Training Organisation, now superseded by SSCs
NVQ National Vocational Qualification
OECD Organisation for Economic Co-operation and Development
OFSTED Office for Standards in Education
QCA Qualifications and Curriculum Authority
QPID Quality and Performance Improvement Dissemination Unit
RDA Regional Development Agency
SMEC Scottish Management and Enterprise Council
SMEs Small- and medium-sized enterprises
SSC Sector Skills Council
SSDA Sector Skills Development Agency
SVQ Scottish Vocational Qualification
TEC Training and Enterprise Council, now superseded by local Learning and Skills Councils
TUC Trades Union Congress
UfI University for Industry
VQ Vocational Qualification
WBL work-based learning
Definition of terms
Skills - along with ‘training’, ‘knowledge’ and ‘learning’ - are not easy to define. One definition is ‘the
ability to do something well - by definition acquired through formal and/or informal learning and
through practice’ (Campbell et al. 2001, p. 21). Skills require varying levels of underpinning knowledge
and understanding. Qualifications tend to be used as a proxy for skills but they are just that - only a
proxy. However defined, it can be said that skills are acquired on a continuous basis and not through a
series of education and training activities. Learning at work is a central activity in the acquisition of
skills. Skills are held to be important because they can enhance financial and organisational
performance as well as individual performance and motivation.
Generic skills, core skills, key skills, transferable skills - these include communication, problem-
solving, team-working, IT, application of number, ‘ability to improve personal learning and
performance’ and ‘reasoning skills, scheduling work and diagnosing work problems, work process
management skills, visualising output, working backwards for planning purposes and sequencing
operations’ (Campbell et al. 2001, p. 24). The more generic the skill, the greater the knowledge
required. These skills are increasingly needed in all types and levels of occupation.
Occupation-specific skills - these involve specialised knowledge pertaining to a particular

occupation or occupational group. Some, such as IT skills and foreign languages, are transferable
across occupations, others are not.
Basic skills - literacy, numeracy, oral communication. Some people with no or low qualifications have
good basic skills and some with high qualifications have poor basic skills, but generally low
qualifications are correlated with low basic skills (Campbell et al. 2001, p. 63).
Personal attributes - there is little agreement on what these are and whether they count as skills, but
employers look for ‘motivation, judgement, leadership and initiative …’ flexibility, adaptability and
ability to ‘cope with change and uncertainty’ (Campbell et al. 2001, p. 24). There is growing use of
aptitude tests in recruitment.
Hard-to-fill vacancies - difficulties in recruitment, for any reason
Skill shortage vacancies - difficulties in recruiting people with the needed skills
Skills gap - deficiency of needed skills among existing employees
35
Internal skill gaps - ‘defined as occurring where one third or more of existing staff in a particular
occupation lack full proficiency at their current jobs’ (Campbell et al. 2001, p. 120).
36

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Skills Mismatches and the Role of VET

2. The United Kingdom Labour Market.................................................................................................... 1

3. Demand and supply............................................................................................................................. 7

4. Provision of education and training ................................................................................................... 16

5. Recommendations and action plans published ................................................................................. 21

7. Expert interviews ............................................................................................................................... 25

8. Summary and conclusion .................................................................................................................. 28

Definition of terms .................................................................................................................................. 35

Factors in the skills mismatch include:

2. The United Kingdom Labour Market

2.1.1 Changes in the workforce

2.1.2 Changes in the workforce by sector

Table 2: Analysis by main sector: changes in workforce deployment, 1979-2001

2.1.3 Gendered employment

Table 3: Changes in sex composition of the workforce ('000s), 1979-2001

Table 4: Changes in sex composition of the workforce (percentages)

Tables 5 to 7 give a more detailed analysis of sectoral employment.

2.1.4 Ethnic minority employment

2.1.5 Employment of people with disabilities

2.2 Critical issues in the national context

1 Labour Market and Skill Trends 2000

3. Demand and supply

3.1.1 The demand side

Reasons for recruitment difficulties include the following:

• High staff turnover in low-paid occupations;

3.1.2 The supply side

3.1.3 The skills imbalance

• Demand for skills exceeds supply;

3.2.1 Types of skill

• Basic (literacy and numeracy);

3.2.2 Sectors and occupations with skill shortages

3.3.1 The agro-food sector

There are three main forms of production in food manufacturing:

• High-tech continuous or semi-continuous production to meet mass demand;

Breakdown of employees by level of occupation:

• Operative and elementary jobs, 45%;

Qualifications of the workforce:

• 74 per cent of firms have 1-19 employees;

Three kinds of skills and attributes are required by employers:

3.4 Specific Analysis on skill needs in the engineering sector

Distribution of sites by number of employees:

• 55 per cent of sites have 1-4 employees;

Table 12: Percentage of establishments in different sectors analysed by size of establishment

• over half of establishments surveyed reported these gaps:

• over half of establishments surveyed reported these gaps:

3.5 People most likely to lack needed skills

Those most likely to lack needed skills are:

The situation for immigrants and ethnic minorities is complex.

• Business services give more training to full- than to part-time staff;

3.6 Future projections

4.1 Lifelong learning

4.1.1 Learning provided or supported by employers

Surveys over the last few years found:

4.1.2 Post-compulsory learning provided by the educational system

4.2 Concerns about quality

4.3 Links between employers and providers of learning

5. Recommendations and action plans published

3 Labour Market and Skill Trends 2000

• An action plan to improve the supply of skills;

• A national core curriculum for ESOL;

• Make vocational qualifications more accessible;

6. Government initiatives to address the skills problem