The Forum of Private Business is responding to a House of Commons Committee's report into youth unemployment and the Government's ‘Youth Contract' by calling for better basic skills training to be placed at the heart of the national curriculum.
In today's Work and Pensions Committee's report the youth contract, under which £1 billion has been allocated for a range of schemes, is called a ‘good start' in attempting to tackle youth unemployment – but deemed to be insufficient on its own given the scale of the current problem.
According to the Forum's latest training and skills member panel, available here, 48% of respondents welcomed the Government's present focus on apprenticeships – as opposed to higher education – but 36% said the level of skills funding remains too low, while considerably fewer (13%) said the focus and level of skills funding is ‘about right'.
In terms of work-readiness, 68% reported ‘no problems' when recruiting graduates, 62% employees aged over 50, 47% when taking on apprentices, 40% young people, 33% recent entrants to the UK and 27% those unemployed for over a year.
In June, the Forum's Senior Policy Adviser Alex Jackman told the committee that many small business owners report a dearth of basic skills among young people leaving the education system – including literacy, numeracy and even employability attributes such as punctuality.
He said education providers and businesses must be able to work together more closely so that essential employment skills can be honed well before young people begin their working life. He suggested this could be delivered as part of the national curriculum, which would also help to ease the steep training costs currently facing firms.
"Employers are the number one consumer of the products of education, and they are rejecting school leavers because their standards are too low," said Mr Jackman. "We are not referring to standards of academic education in this instance, but the more basic work skills all new starters should at that point in their lives already have drilled in to them. Things like being punctual, being able to deal with difficult customers or answering the phone politely.
"We believe, and so do our members, that schools should be doing more of this type of preparation work. This would not be difficult for schools to accomplish, but for a small business teaching new starters this on a one-to-one basis is labour intensive and therefore costly."
"We are calling for the education system to engage employers more to achieve these aims, so they can learn exactly the types of skills pupils are lacking, and also to better prepare youngsters for the world of work."
The Committee's report also notes that the numerous youth contract and skills policies are ‘poorly coordinated', with responsibilities split across five central government departments and involving a growing number of public, voluntary and private sector organisations. It recommended a more streamlined approach, and dedicated telephone helpline and online services for both employers and young people.
Mr Jackman had earlier told the Committee that small businesses would welcome widening and simplification of the employer incentives available to them.
"The problem for small firms currently is that there is no single tool to help find what they are actually eligible to apply for. NI holidays for firms are regional and depend on the age of the employee and the business itself. There are other schemes too such as apprenticeship grants which come with stringent terms," he said.
"Essentially, let's cut out the hoop-jumping process and streamline it for businesses that simply haven't got the time to do endless research.
"A single system where a firm can type in their basic details and in return are offered a list of suitable schemes would be a huge help here."
The report is more positive about other aspects of the Youth Contract, including Jobcentre Plus (JCP) adviser support, work experience placements and apprenticeships.
The committee also welcomes wage incentives for young, longer-term Jobseekers Allowance (JSA) claimants. Over three years from April 2012, the Youth Contract will offer wage incentive payments of up to £2,275 to employers when they recruit an 18–24 year-old from the Government's Work Programme.
Mr Jackman had reported that Forum members were happy with the level of payments on offer and arrangements for smaller employers to claim early part-payments to cover recruitment start-up costs. However, he noted early indications that take-up was disproportionately low among the smallest employers, perhaps due to a lack of awareness of the scheme.
Forum member Chris Bowman, the Managing Director of Paramount Precision Engineering in New Malden, Surrey, also gave evidence to the committee.
Backing the Forum's call to retain statutory work experience for under-16s, Mr Bowman said his business still arranges work experience placements for local school students despite the practical difficulties associated with doing so.
He also said he had been disappointed by a "pretty poor" response from JCP when he had tried to recruit through them, and told the committee he had not yet considered the Youth Contract scheme for his own business – something he said he needed to explore.
Mr Bowman told the committee: "To a certain extent, youngsters nowadays are not leaving school with the necessary life skills to look for employment. Furthermore, if we are going to take people on, whether or not it is on a work placement, we want to know they are interested in working and fulfilling the task we want of them. It helps us if we work with our local college.
"We go to the schools which, in the main, have shut down their workshops. They do not do woodwork and metalwork and all these things because they all want IT skills. The thing is, kids are leaving school now not knowing what they want to do. A lot of them like working with their hands. It does not have to be academic skills – they do not have to be rocket scientists they have to want the ability to work with their hands. That is where we are starting to work with the local colleges. As I said before, they will do some of the theoretical training and we will do the practical training in our workshops."
Referring to the removal of the Default Retirement Age (RDRA), he added: "I have an ageing workforce, and I cannot replace them because the cap on retirement has now been taken off. That is our biggest single problem, and that is going to stop us taking youngsters on.
Interestingly, in order to bypass spiralling training costs, employers are seeking out less expensive alternatives to up-skill their staff.
According to the Forum's training and skills panel, more than one in five firms (22%) use guides and handbooks, while other popular alternatives include supplier training (48%) public sector training provided by bodies such as colleges or local authorities (41%), services from trusted advisers such as accountants (38%), personal coaching and mentoring (34%), online training services (28%), ‘DIY' training including industry tips (24%) and analysing competitors (14%). Just 3% use self-help videos.
The Forum provides complete advice, guidance and support for its members on all aspects of employment via its Employment Guide. For more information call 0845 130 1722.
Business support group calls for greater focus on employability skills to bring schools and small businesses closer together.