More English employers need to be persuaded of the value to their businesses of employment-related education and skills training, according to the National Audit Office (NAO).

Despite expenditure by employers in both public and private sectors estimated at £23.7 billion on education and training, the NAO reports that 6% of employers have skill shortage vacancies and 20% have skills gaps. This is estimated to cost £10 billion a year in lost revenue – or £165,000 a year in a typical business with 50 employees.

According to the report, many employers want incentives to train their staff more and the NAO highlighted the imperative to engage ‘hard to reach' employers, rather than subsidise those who would have trained their staff anyway without government support.

In Employers’ Perspectives on Improving Skills for Employment the NAO recommended:

• The ways in which employers get advice and information be simplified.


• The emphasis should be on flexible and affordable training that employers need.


• Funding should be tailored to encourage more employers to invest in training to meet skills shortages and regional priorities.


• Sector Skills Councils should be helped to develop as genuinely employer-led bodies, leading on incorporating employers' perspectives into skills development.

The report also highlighted estimates that, on average, an 8% increase in the proportion of trained workers can lead to a 0.6% increase in UK productivity, as measured by the value added per hour worked.

Sir John Bourn, comptroller and auditor general at the NAO, said: "The doubts that some employers have about the value of skills training must be addressed by more streamlined communication with employers, by developing flexible and affordable training genuinely targeted on business needs, through incentives to employers, and effective channels through which employers can influence skills training."

For employers wishing to influence skills training, the NAO says the biggest barrier is shortage of time, but achieving genuine input from employers is a challenge which has to be met if greater ‘employer engagement' is to become a reality.

The report also warned that as awareness of Sector Skills Councils grows there is a risk that they will become overstretched, unwieldy or both.

It added that they risk losing the ‘buy in' of the employers in the sectors they represent. The NAO says the Councils need sufficient time and capacity to develop as genuinely employer-led bodies providing sector expertise in developing skills training and formal qualifications.

* Employers’ Perspectives on Improving Skills for Employmentis available at www.nao.org.uk.