Skill shortages threaten to derail optimism around ‘levelling-up’

However, a lack of skills is still proving a barrier, with more than a third saying their greatest recruitment challenge is a lack of available talent in their region.

UK business leaders are optimistic that the government’s levelling-up agenda can realistically be delivered but the so-called “skills gap” is proving a challenge for the regions outside of London and the South East, according to new research from accountancy and business advisory firm, BDO. 

The survey of 500 leaders of medium-sized businesses across England and Scotland, reveals that almost all respondents (94 per cent) believe the government will deliver on its levelling-up promises in the next decade. More than half (54 per cent) say that this could realistically be achieved within the next three years.  

However, despite optimism around the government’s agenda, access to skilled people may be a threat to the growth of regional businesses. All those surveyed reported some form of staff shortages, with a third saying that their biggest recruitment challenge is a lack of available talent in their region.

Looking at the comparison throughout the UK, those worst affected by regional skills shortages are outside of London and the South East and areas heavily reliant on the manufacturing sector.

More than a third of manufacturing businesses nationwide cited staff shortages as the number one issue affecting their ability to operate at normal levels, with 40 per cent of manufacturers unable to fill their apprenticeship positions.

In a bid to reduce the so-called “skills gap” a £3.8 billion investment in skills and education was announced as part of the recent budget and spending review, including £170 million allocated to funding apprenticeships.

The Chancellor also announced that £1.7 billion of the £4.8 billion levelling-up fund has been allocated to more than 100 small-scale infrastructure projects throughout the UK. These include a “growth zone” in Derbyshire, the redevelopment of Leicester train station and transport investments in Liverpool, Plymouth, Newcastle and Nottingham.