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Lack of skilled workers holding Scottish firms back

An FSB survey of Scottish island-based business conducted last September found that a staggering 38% of businesses across all islands cannot currently expand due to a lack of skilled staff, and we know from countless conversations that Sutherland businesses find themselves in much the same boat. The fact is that low unemployment, the seasonal nature of many jobs, the lure of the bright lights of the south and the lack of affordable housing means that many Highland businesses are struggling to find the staff that they need now, and who knows what things will be like after Brexit?
 
The issue is a complex one and there is no magical cure. However, FSB used March’s Modern Apprenticeship (MA) Week to highlight the importance of apprenticeships as a cost-effective way of addressing skills and labour shortages. 
 
While the overall number of small Scottish businesses is now at its highest ever level at over 365,000, only 12% employed apprentices in 2015, as against 17% in 2009. The situation has improved lately in the Highlands, the number of new starts increasing from 930 in 2017/17 to 1,015 in 2017/18, and the Scottish Government’s announcement that there will be increased, needs-based support for key sectors and for rural areas like Sutherland is very welcome. However, it cannot stop there.  
 
FSB argues that a number of things must happen if we really want to make apprenticeships accessible and attractive to employers and to maximise the benefits that they bring.
 
First, the UK Government’s Apprenticeship Levy is only for larger businesses and it freezes smaller, non-levy paying businesses out. Rather than offering big businesses with large training budgets small amounts of money to develop their staff, FSB wants the Scottish Government to adapt the fund to enable greater numbers of small businesses to recruit apprentices
 
Second, the Scottish Government should increase contribution rates for apprentices aged 25 and over to enable more parents and others wanting to change career direction to take part. This is particularly relevant to remote rural areas.
 
Third, the Scottish Government should extend its Employer Recruitment Incentive to provide wage subsidies to help overcome recruitment costs.
 
Fourth, around 70% of Scottish businesses have no staff and are excluded from employing apprentices as a result. Those that want to expand should be enabled to take an apprentice on.
 
Finally, Skills Development Scotland should do more to actively encourage small businesses to employ apprentices, and it should publish quarterly performance data broken down by business size to show how it is doing. It should also create an online advisory service containing practical, step-by-step guidance on the recruitment, management and development of apprentices.