Current Government policies on education and training are doing nothing to plug the UK’s productivity gap, according to the Institute of Directors (IoD).

In a speech to the Institute of Economic Affairs in Central London, director general of the IoD Miles Templeman, said that 25,000 pupils leave school with no GCSEs, contributing to 4.5 million people who have no qualifications at all.

He said that successive policy makers had failed to address the shortcoming of the education system and this was in turn harming business, with 135,000 vacancies unfilled in 2004 due to skills shortages.

He called for tax breaks for companies providing training, an over-haul of apprenticeships and vocational qualifications that meet the needs of employers.

Mr Templeman said: “Many businesses experience skill shortages and are unable to recruit the adequately skilled individuals from the labour market that they need. In 2004, 135,000 vacancies could not be filled because of skill shortages. Other businesses suffer from skills gaps, whereby some of their employees lack the skills that they need to carry out their jobs effectively.”

His four point plan to boost the UK’s productivity gap includes:

• An improvement of standards in literacy and numeracy




• The Government to reduce the tax burden on business allowing firms to invest more money in training and skills development




• An improvement in the system of apprenticeships. He claimed that too many apprentices receive poor quality training from providers, resulting in a failure to complete programmes




• Vocational qualifications to meet the needs of employers

Mr Templeman added that the problem was not the sole responsibility of the Government and that employers and employees had a duty to improve skills in the workplace for the benefit of all.