UK business leaders are optimistic that the Government’s levelling-up agenda can realistically be delivered but the so-called ‘skills gap’ is proving a challenge for the regions outside of London and the South East, according to new research from accountancy and business advisory firm, BDO.
The survey of 500 leaders of medium-sized businesses across England and Scotland, reveals that almost all respondents (94%) believe the Government will deliver on its levelling-up promises in the next decade. More than half (54%) say that this could realistically be achieved within the next three years.
However, despite optimism around the Government’s agenda, access to skilled people may be a threat to the growth of regional businesses. All those surveyed reported some form of staff shortages, with a third saying that their biggest recruitment challenge is a lack of available talent in their region.
Looking at the comparison throughout the UK, those worst affected by regional skills shortages are outside of London and the South East and areas heavily reliant on the manufacturing sector.
| Region | % citing a lack of available talent in their region |
| South West |
53% |
| Thames Valley |
47% |
| West Midlands |
41% |
| Yorkshire and the Humber |
40% |
| East Anglia |
39% |
| East Midlands |
37% |
| Central South |
33% |
| North East |
30% |
| South East |
24% |
| Greater London |
23% |
| North West |
22% |
More than a third of manufacturing businesses nationwide cited staff shortages as the number one issue affecting their ability to operate at normal levels, with 40% of manufacturers unable to fill their apprenticeship positions.
In a bid to reduce the so-called ‘skills gap’ a £3.8bn investment in skills and education was announced as part of the recent Budget and spending review, including £170m allocated to funding apprenticeships.
The Chancellor also announced that £1.7bn of the £4.8bn levelling-up fund has been allocated to more than 100 small-scale infrastructure projects throughout the UK. These include a ‘growth zone’ in Derbyshire, the redevelopment of Leicester train station and transport investments in Liverpool, Plymouth, Newcastle and Nottingham.
Ed Dwan, partner at BDO, said: “After experiencing a period of great uncertainty, it is pleasing to see that business leaders from across the country are optimistic that real progress on the ‘levelling-up’ agenda will happen in the not too distant future.
“The investment in shovel-ready projects announced as part of the levelling-up fund will be a welcome boost to those areas that need them the most. However, it is clear there is more to levelling-up than just transport and infrastructure, and the Government must not overlook this.
“Skills and staff shortages are being reported across the board and remain a large barrier to the growth of many businesses, particularly of those in some in the regions outside of London and the South East.
“The newly announced £3.8bn skills investment from the Government is crucial in order to ensure the skills gap doesn’t widen, but there is no quick fix. As businesses navigate complex challenges post-Brexit and pandemic, the Government must listen to their needs and implement long-term policies that will have an impact nationwide in order to truly ‘level-up’ the UK.”
