Covid 'accelerates' need to act now on impending skills crisis, CBI warns

Britain faces the threat of long-term high unemployment and permanent scarring of its economy if it fails to urgently act to help millions of workers retrain for the future, a leading business group warned today.

The Confederation of British Industry (CBI) claimed that coronavirus was accelerating changes to the world of work, fuelling the threat of long-term joblessness for British workers unless they are given new skills.

Research conducted by the CBI before the pandemic hit suggested that around nine in 10 workers would have already needed new skills within the next 10 years to support the economy, at an additional cost of £13bn every year.

The group said that jobs were "already changing", but that Covid-19, which has seen vast numbers of staff shifted to remote working and factories double down on robotics, had "accelerated the need to act now".

CBI director-general Dame Carolyn Fairbairn said: "Failure to act will leave business facing skills shortages and workers facing long-term unemployment. We are at a fork in the road that requires urgent and decisive action."

The warning comes ahead of what is expected to be a bleak winter of mounting job cuts and liquidations. The British Chamber of Commerce warned this weekend of the "catastrophic consequences" of introducing new tougher Covid restrictions without providing more financial support for businesses.

In a letter to the prime minister, the BCC, which represents more than 75,000 companies across the UK, said the situation for business "grows graver by the day".

Separate figures from Deloitte, meanwhile, suggested the pain could continue for some time longer, with British business leaders seeing no chance of economic recovery before next summer at the earliest.

Almost two thirds of finance leaders surveyed by the accountant said demand for their own business was unlikely to recover to pre-pandemic levels before the end of the second quarter, while 78pc said they expected UK corporates to reduce capital expenditure in the next 12 months.

The majority of chief financial officers said their businesses would, however, be spending on "restructuring, streamlining and automation" over the year ahead.

Workers in regions with "historically sluggish employment growth" are thought to be most at risk of losing their jobs from automation, according to the CBI.

However, the business group said that furlough schemes offered an opportunity for Britain to stave off an unemployment crisis, allowing many people to re-skill. Millions of workers in the hospitality and retail sectors have been placed on furlough schemes as the crisis causes many people to stay away from high streets and restaurants.

The CBI's Dame Carolyn Fairbairn said: "Let's not waste time… The CBI wants to work with unions, education providers and Government to ensure that employees working fewer hours have as much opportunity as possible to retrain and re-skill.”

The group said using that time for training could have a "transformational" impact on the economy and employees.

The CBI said the recent Government announcement of a lifetime skills guarantee, by which anyone over 18 would now be offered a fully funded college course without an A-level or equivalent qualification, was "only a start". It said apprenticeship numbers were continuing to fall, despite promises from the Government that the apprenticeship levy would be reformed, and that it was "time to end this failed experiment".

Gavin Williamson, the Education Secretary, said an upcoming White Paper would "outline plans to build a high-quality further education system that will provide the skills that individuals, employers and the economy need to grow and thrive.

"Our priority is making sure people across the country gain the skills we know employers value and that will help our economy recover as we build back better from coronavirus."

He said the lifetime skills guarantee would help "support adults across the country to make lifelong learning a reality, opening doors for more people to realise their talents, develop new skills and get better jobs.

"To help boost apprenticeship opportunities, we are supporting employers to invest in the skilled workforce they need to recover and grow by offering £2,000 for each new apprentice they hire aged under 25 and £1,500 for those aged 25 and over, in recognition of the value apprentices of any age can bring to businesses and to our economic recovery."