Mind the skills gap

Document type
Memon, Adam
Centre for Policy Studies
Date of publication
28 November 2014
Employment, Education and Skills
Social welfare
Material type

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Sustained weakness in labour productivity is keeping British wages low. Without sustained productivity growth, real wages and thus living standards cannot rise in the medium term. Such growth can be achieved by increasing the skill level of the workforce. International evidence has shown that increasing the skills of workers will lead to significant improvements in the innovative and productive capacity of businesses. The Government needs to address the productivity crisis by promoting programmes that develop the skills of the current and future workforce. The report  advocates a variety of policy reforms including:

  • Increasing the number of available apprenticeships and work experience schemes and tearing up regulation preventing young people from accessing them.
  • Providing more sophisticated welfare support for those unable to find employment and expanding the New Enterprise Allowance scheme to promote entrepreneurialism and innovation.
  • Extending the use of performance related pay across the public sector and improving performance incentives for teachers

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