A government fund that allows employers to invest in the skills their workforce has been praised by the World Economic Forum (WEF).

In a new report, the Swiss-based WEF says that the Employer Ownership of Skills Pilot is the sort of scheme “crucial” to tackling the skills gap between what education produces and what employers need.

Launched in 2012, the scheme has allowed employers in England to bid for £340 million of funding to invest in their current and future workforce. Employers have to develop proposals to create jobs, raise skills, and drive enterprise and economic growth, and seek co-investment from government to meet the costs.

In 2012, some 36 different organisations co-invested in 124 projects.

The WEF report, Matching Skills and Labour Market Needs, says: “A stronger involvement and ownership by employers in skills development and utilisation is crucial to tackling skills mismatches.”

The report says that although the skills deficit has become more prominent since the global economic crisis, it existed before 2008.

The 2013 Survey of Adult Skills carried out by the Organisation for Economic Co-operation and Development showed that the UK had one of the most over-skilled workforces in the developed world, with almost 30 per cent of people being more qualified than they need to be for the job they have.

The report warns that this can have a “scarring” effect on an employee’s future career prospects as their qualifications go unused.