Long-term recovery will depend on solving the UK’s productivity puzzle says @CIMA_News
The Chartered Institute of Management Accountants (CIMA), the world’s largest body of management accountants, calls on the Government to look beyond the short-term and address the UK’s long-standing productivity woes, focusing future investments in skills in industries which can help the UK compete on the world stage and address social mobility.
According to the OECD, the UK’s economy will be one of the most affected by the coronavirus pandemic, a bleak prediction. In 2018, service industries accounted for 81% of the UK's economic output but these are also the hardest hit sectors by lockdown restrictions despite the Government’s support packages, highlighting the vulnerability of the workforce in these industries. While the Government must tackle immediate issues such as restoring jobs and increasing consumer spending, it must also put great emphasis on creating long-term recovery including boosting social mobility.
CIMA believes investing in education and skills development in sectors such as digital technology (e.g. AI, virtual reality, wearables, robotics), education technology (e.g. learning apps, virtual learning environments, gamification), healthcare (e.g. pharmaceutical research, biochemistry, genomics), financial services (e.g. payments, ESG investments), engineering and construction (e.g. environmental and sustainability-related industries).
Worryingly prior to the pandemic, a 2019 report by the Industrial Strategy Council already estimated that 20 percent of the workforce will be significantly under-skilled for their jobs by 2030. In addition, CIMA’s own research in 2019 revealed that 37% of UK workers don’t feel that they need to learn new skills despite a growing awareness of the impact of technology on jobs.
Andrew Harding, FCMA, CGMA, Chief Executive – Management Accounting, said:
“By creating rapid and profound shifts in our economy and the labour market, the pandemic has exacerbated some of the UK’s prevailing issues such as faltering productivity, widening skills gap and failing social mobility. A new, post-lockdown reality is now sinking in, we must not fall into the trap of believing in a return to ‘business as usual’.
“If we are to get the economy back on its feet, remain competitive on the global scene and sustain growth, we must now foster both capital investment in business and invest wisely into developing a skilled, motivated workforce. That provides the opportunity to advance social mobility through creating quality jobs and real wage growth.”
CIMA calls on the Government to consider the following measures:
- Increase investment in apprenticeships for high-value and productive industries. This will help UK workers to gain transferable skills and open new career opportunities, which will in turn increase social mobility and contribute to real wage growth.
- Drive regional investments to deliver new skills clusters. This will drive innovation and attract inward investments, driving economic growth and prosperity to level up UK regions.
- Change the Apprenticeship Levy to an Apprenticeship and Skills Levy for all workers. This will ensure greater access to lifelong learning to ensure businesses have the talent they need to succeed now and in the future, and create new career opportunities for workers across the country.
- Drive investments towards higher level apprenticeships (from level 4 to 7). This will raise the skill levels of the UK workforce to meet the demands of the economy and encourage social mobility. In turn, this will improve the country’s productivity performance and global competitiveness.
- Simplifying the Apprenticeship Levy by allowing apprenticeship providers to also become end-point assessors. This will create a simpler, more flexible system for both apprentices and employers, ensuring that funds are allocated to skills development rather than bureaucracy for the benefit of both people and business.