IoD Calls for a new Shortage Occupations Agency

The Institute of Directors has set out a series of measures designed to address the chronic and systemic skills shortages that have long been experienced in Britain.

As part of its response to an ongoing Treasury workstream entitled ‘People, Capital and Ideas’, the IoD sets out the five key components of its approach:

  1. Create a fully independent Shortage Occupations Agency with a statutory remit to systematically advise on current and future skills shortages areas for the UK economy.
  2. Use the tax system to incentivise business training to address skills requirements identified by this Shortage Occupations Agency, for example by allowing expensing at over 100% for training in these areas only.
  3. Allow sole traders to deduct for tax purposes the costs of reskilling into areas that are entirely new for their business, if these are identified as priorities by the Shortage Occupations Agency.
  4. Where there is already free training provided to overcome skills shortages under the Level 3 guarantee, these should be available to anyone, regardless of their previous qualification levels.
  5. To further increase uptake, government should reimburse the payroll costs for firms who allow existing employees away from their normal duties to undertake either these Level 3 guarantee or the shorter ‘bootcamp’ courses in skills shortage areas, subject to an upper limit.

Alexandra Hall-Chen, Senior Policy Advisor at the Institute of Directors, said: 

“Our own polling suggests skills and training are seen as crucial to firms’ future growth plans and are the single most important issue that will affect future productivity. Yet levels of workplace training are low by international standards and, if anything, are falling.

“Business leaders are clear that responsibility for fixing skills shortages lies jointly between government and industry. We are therefore calling on government to be clearer about what its priorities are, through the establishment of an independent Shortage Occupations Agency, and to be bolder in what it will do to achieve change. By using the taxation system to incentivise organisations that train up their staff to meet national skills shortage needs, the government can help to address this long-standing issue that negatively affects British business.”