London’s skills system is “broken” and needs a radical overhaul if future generations are to meet the needs of the city’s businesses, a group of MPs has been told.
London Councils, which represents all 32 London boroughs and the City of London, wants changes to the way the capital’s FE colleges and training providers are funded.
Giving evidence to the All Party Parliamentary Group inquiry on small business productivity yesterday, Peter John, London Councils’ member for employment and skills, said the skills gap was getting wider.
A lack of local influence, poor labour market information and a “flawed” system of incentives for skills providers were leading to Londoners losing out on jobs and firms struggling to fill vacancies, he said.
“The skills system, as it stands, is not fit for purpose. There is a disconnect between the skills London is producing and the skills businesses, especially small businesses, need.
“Too much funding is being wasted on courses that employers do not need or want such as hair and beauty, car mechanics or health and safety.
“We need to address this urgently if we are to avoid producing a generation of Londoners unprepared for the labour market.”
Some 99 per cent of London businesses are small companies, which employ half the capital’s workforce.
Earlier this year the UK Commission for Employment and Skills found that businesses with fewer than five staff reported that one in three vacancies is hard to fill because of skill shortages and a lack of suitable candidates.
A report by London Councils published last year found that almost a quarter of vacancies in London were due to skills shortages, according to employers, with a particular lack of provision in growth areas like marketing, sales and the creative and cultural industries.
Mr John called on the government to overhaul the way colleges and training providers are funded and to devolve more powers to London boroughs so they can match provision to local needs.
He said funding should be devolved to London Enterprise Panel to manage the adult skills system at a London level. Currently this funding is agreed at national level, and although London gets £550 million a year, the employment rate still lags behind the UK average.
The All Party Parliamentary Group, chaired by Brian Binley MP, has been taking evidence since April.
Skills is one of its six areas of inquiry, including the quality of the education system and its responsiveness to employer needs.
The Department for Business, Innovation and Skills said it was already building closer links between the world of work and the skills system by giving employers more influence over courses and qualifications.
It said this included putting employers in the driving seat in the delivery and design of high quality apprenticeships. Last year more than 77,000 Londoners were participating in an apprenticeships.
A spokeswoman said: "Employers tell us some school and college leavers’ literacy and numeracy levels are not good enough, that’s why English and maths requirements have been strengthened, specifically for 16-19 year-olds.
"The National Careers Service is helping to bring together schools and employers to help young people develop job-ready skills, and is working directly with Local Enterprise Partnerships to provide schools with expert advice on the world of work."