Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the impacts of skills shortages on businesses.

The Employer Skills Survey (ESS) has run biennially since 2011, providing a vital source of intelligence on the skills issues that employers face. The survey captures the density and incidence of skills shortages, as well as the impact of these on businesses.

The last ESS ran in 2019. Fieldwork is currently underway for the 2022 ESS, and will continue until the end of March 2023. Full findings can be found at: https://www.gov.uk/government/collections/employer-skills-survey-2019.

The survey captures the number of vacancies and the proportion of these that were proving hard to fill because applicants don’t have the relevant skills, experience or qualifications (skill-shortage vacancies). In 2019, 24% of all vacancies in England, Northern Ireland and Wales were skill-shortage vacancies, an increase from 22% in 2017. This measure is known as the skill-shortage density measure.

Of those employers in England, Northern Ireland and Wales that reported skill-shortage vacancies, 94% reported that it had an impact on business performance.

The most common impacts reported included:

• An increased workload for staff (84%)
• Difficulties meeting customer services objectives (49%)
• Increased operating costs (45%)
• Loss of business or orders to competitors (40%)
• Delays developing new products or services (39%)

The Skills for Jobs White Paper published in January 2021 set out the government’s blueprint for reshaping the technical skills system, to better meet the needs of employers and the wider economy. As part of this new approach, the department introduced employer-led Local Skills Improvement Plans (LSIPs) which will set out a clear articulation of employers’ skills needs, and the priority changes required in a local area to help ensure post-16 technical education and training provision is more responsive and flexible in meeting local labour market skills needs. The department has now designated employer representative bodies to lead on the development of LSIPs in all 38 areas of England, and expect local areas to have their plans ready for approval in May 2023.