Skills crisis deepens in the capital 

A SKILLS shortage has led to London's worst recruitment crisis in decades. Business owners are being to forced to look overseas for workers and are increasing salaries in an attempt to attract the right staff. 

Two separate reports out this week will point to a severe shortfall in workers with basic skills. The London Chamber of Commerce and Industry has found that two out of three firms are struggling to find the right workers, especially at professional and managerial levels. A decade ago that figure was just 15%. The topic is due to be debated by the mayoral candidates tomorrow. 

At the same time research by the London Skills Forecasting Unit (LSFU) will show that more than two in three firms are suffering from shortages of information-technology workers. 

Jason Holt, who works at his family jewellery business in Hatton Garden, said the shortage of skilled stonecutters had forced him to look overseas. One of Holt's most recent recruits is Portuguese. He said: "There is a drastic shortage of skilled craftsmen in this field. There are so few craftsmen that we have to look elsewhere. We are looking overseas either to get things manufactured or to get people." 

The chamber of commerce research found the most acute shortages exist among skilled manual workers such as electricians and bus drivers, where 45% of firms polled reported difficulties. 

Daniel McBrearty, who founded Mac Services, an electrical contractor, in 1972, said he was facing a recruitment crisis. "I have to take on Australians and New Zealanders," he said. "I have put up salaries five times in two years and still cannot get skilled workers." 

David Brown, managing director of London General and London Central buses, is struggling to find bus drivers with basic literacy and numeracy skills. Brown has launched a nationwide recruitment drive. 

Research by Adecco, the recruitment firm, shows a 30% rise in pay in some professions in the capital. Stuart Neill at Adecco said: "Skills shortage is not a new problem - but it is getting worse. What we are experiencing is a shortage of people with the right skills - IT, engineering and management. There is also a lack of soft skills such as numeracy and literacy. The worst-case scenario is that firms will move abroad. Many companies cannot afford to pay wages in London." 

According to the LSFU the wider problem in terms of basic literacy, numeracy and IT skills is endemic. Nearly 2m Londoners have no - or minimal - qualifications. John Murphy, who heads Carpmaels & Ransford, a firm of patent attorneys, said: "The problem of recruiting in clerical and secretarial areas is getting people with good basic English. We don't have time to train so we have to pay higher salaries." 

 Judith Rutherford, director of the LSFU, said: "This skills shortage is the tip of the iceberg because we have a major revolution in technology. We are creating an IT underclass and the longer people are off the jobs ladder, the harder it is for them to get back on." 

Rutherford advocates a skills and training agenda to match workers with jobs. "We are a potential world leader in creative and financial industries and if we don't do something about the skills gap we will lose our competitive edge," she said.

Sunday Times 19 March 2000