UK productivity will continue to lag behind other developed nations unless the government boosts investment in vocational education, it has been claimed.

Ahead of Wednesday’s Budget, Chris Jones, chief executive of the City & Guilds Group, has written to chancellor George Osborne urging him to increase support for vocational education.

His comments come after senior figures told TES the Budget would be “critical” for the future of the FE sector. Mr Jones’ letter also raises concerns about the government’s focus on achieving the 3 million apprenticeships target.

Although supportive of the commitment, Mr Jones claims that even if all new apprenticeships were taken by 16- to 18-year-olds, it would equate to just 3.8 per cent out of the 10 per cent increase in enrolments needed to make a noticeable difference to youth unemployment. 

Mr Jones urges the chancellor to strengthen alternatives to a purely academic curriculum at 14 or 15; to ensure that vocational education gets sufficient funding, allocated appropriately; and to provide extra funding to meet the apprenticeships target.

His letter is supported by new research by City & Guilds and the Centre for Economics and Business Research, due to be published in full in the autumn, which reveals that a 1 per cent increase in vocational skills would uplift the country’s GDP by £163 billion in a decade.

In addition, a 10 per cent increase in vocational education enrolment by 16- to 18-year-olds would lead to a 1.5 percentage point drop in youth unemployment, the research says. It also shows the annual return on investment for training an apprentice is £10,280 in productivity gains.

Mr Jones writes: “Broadening high-quality vocational education provision can make a substantial difference to employment, productivity and therefore our GDP.

“In your Budget, you have an opportunity to invest in skills and make a long-lasting impact on our economy.”

The letter comes after a report by King’s College London professor Baroness Wolf warned that FE could “vanish into history” because the current funding system was “destroying” the sector.

Lady Wolf said vocational education funding was already being “squeezed” and could be driven out of FE colleges altogether because of the growing gap between college and university funding.

“Our future productivity and prosperity are at risk if we don’t address the ongoing erosion of provision outside the universities,” she warned.