Skills task force set up
The group will comprise senior figures from industry and business, the training and enterprise councils, training bodies and trade unions.
Mr Blunkett told a Confederation of British Industry conference on employability in Birmingham this week: "Skills shortages have, for too long, been recognised but not dealt with.
"It is not enough to provide people with skills. It is also absolutely necessary to put people with the right skills into the right jobs. Employability must be combined with labour market flexibility."
The CBI warned that tuition fees for students could cause a severe skills shortage.