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Sharp drop in training threatens UK economic recovery

London: The UK has suffered a drop in training four times greater than any other European country during the recession, leading to a skills deficiency that threatens to hold back the recovery, research will show this week.

Britain had one of the highest proportions of working-age population in education and training before the crisis but saw a sharp decline from 2007 to 2012, according to a study by the think-tank IPPR for JPMorgan, the US bank.

“During the downturn, the UK has kept people in work but not invested sufficiently in capital, human or physical. That drags down the productivity of our workers and therefore our living standards,” said Nick Pearce, IPPR’s director.

He warned more needed to be invested in skills to put Britain at the forefront of technological change.

The report will be launched at a European jobs and skills summit in London on Tuesday with Matthew Hancock, skills minister, and Rachel Reeves, shadow work and pensions secretary.

It is the first European stage of JPMorgan’s $250 million (Dh917.5 million), five-year New Skills At Work programme, aimed at funding research and initiatives to close the global gap between workforce skills and what employers need.

The UK Commission for Employment and Skills said recently that “skills shortage vacancies” across the economy — where businesses cannot find recruits with the right qualifications and experience — had returned to 2007 levels.

The commission also found only two in three employers did any training, which has barely changed for a decade, and the annual total they spent on it had fallen by £2.4 billion to £42.9 billion since 2011.

The IPPR said 20 per cent of the UK’s working-age population had taken part in education or training before the downturn, but this had fallen by 4 percentage points.

“The UK’s future lies in well-skilled work, which makes our dramatic decline in the proportion of people in education and training in the great recession a serious concern,” said Pearce.

“We need to do more to develop the skills of young people who do not go to university and to help people maintain skills throughout their working lives,” he added. “High-quality apprenticeships, vocational education and training are increasingly crucial to keeping unemployment low.”

Europe-wide, the study found that technological change meant people with mid-level skills were increasingly being forced to take low-skilled jobs as machines and computers took over their previous roles.

There was also a big increase in underemployment, with an extra 3 million people since 2008 saying they wanted to work longer hours. One in 10 European workers were underemployed, with the most dramatic rises taking place in Portugal and Ireland.

Peter Scher, JPMorgan’s head of corporate social responsibility, said: “All over the world there is this disconnect between so much of the job training that exists and the actual needs in particular markets.”

The IPPR said only one-third of Europe’s unemployment was cyclical, while two-thirds was structural. Those excluded from work included mothers, young people and recent migrants.

The report said unemployment across Europe was predicted to remain above one in 10 next year and was well above pre-crisis levels in most European countries, including the UK.

Pearce said the decline in mid-skilled jobs was linked to the relative ease with which routine manual work in manufacturing can be outsourced to countries with lower labour costs, as well as technological change.

“Mid-skilled jobs tend to involve repetitive tasks, such as those that take place on a production line or in a clerical/secretarial role. These are more easily replicated by machines and digital processes than low-skilled service work,” he added.

“Those with mid-skills are increasingly taking low-skilled jobs. This is a waste of their potential but it also makes it harder for young people and those with no or few skills to find work.”