Chancellor ignored importance of skills and productivity in his Budget speech

According to Mark Beatason, chief economist for the CIPD, there are still some big questions to answer on productivity, particularly how people can be used to boost business performance

Chancellor George Osborne has been criticised for failing to reference the importance of productivity in his Budget speech yesterday.

According to Mark Beatason, chief economist for the CIPD, there are still some big questions to answer on productivity, particularly how people can be used to boost business performance. He believes that there needs to be more of a coherent plan to ensure long-term, sustainable growth.

“Unless we address the UK’s skills challenges, any short-term gains in the economy will be dashed by productivity shortfalls in the long-term,” he said.

“It’s astonishing that productivity wasn’t referenced even once in the Chancellor’s speech, and yet this is the biggest challenge that the economy and businesses face now. We need to understand how we can make more of our people, our assets and our infrastructure in order to boost business performance.  We saw announcements in the Budget designed to encourage investment, but we saw little which will make a real difference to how UK employers develop workforce skills or use existing workforce skills effectively. There still isn’t a clear, coherent plan for productivity and, once again, skills are falling through the cracks.”

Osborne also came under attack from the National Institute of Adult Continuing Education (NIACE). The think-tank organisation said that the Budget missed an opportunity to address the low-skills crisis prevalent within the UK.

David Hughes, chief executive of NIACE, said: “This Budget is completely blind to Britain’s low-skills crisis and was the Coalition’s last opportunity to reverse the damage done to adults participating in further and higher education.

“Today’s raising of the tax threshold does nothing to help the lowest paid, four out of five of whom have been stuck in low pay for the last 10 years. And with the Adult Skills Budget being cut by 24 per cent this year, putting a million learning opportunities at risk, the prospects for people escaping low pay are even worse. Our recent Progression Policy Solution detailed how even modest reprioritisation of funding would help hundreds of thousands of people get the support and skills they need to help improve productivity in their workplace and therefore earn more.

“The OBR tables set out how severe the Chancellor’s planned cuts are for 2016-17 and 2017-18; these are cuts on top of those we have seen already and those planned into this year, so the impact could be devastating. The cuts since 2010 have already led to a loss of 1 million learning opportunities for adults, with another 400,000 to come next year. All of this at the time when all of the respected analysts agree about the benefits of greater investment in skills training for people of working age and when skills gaps and shortages are hampering economic growth. I believe that we are in a skills crisis now, but those looming cuts really are frightening.”

 

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