Osborne productivity plan to boost management skills

10 July 2015 -

Wide ranging proposals include measures to sharpen leadership abilities of UK Plc

Matt Scott

Chancellor George Osborne added more fuel to the UK’s productivity engine today as he launched the government’s plan Fixing the Foundations: creating a more prosperous nation.

One of the recommendations in the report is to give support to improving management and leadership in small businesses in order to enhance their productivity and growth potential.

While the UK is seen as a key player in launching start-up companies, those businesses often struggle to realise growth in subsequent years (see below).

Measures launched in the report to tackle this problem include an extension of loans for post-graduate masters courses to include MBAs, and a new degree-level apprenticeship scheme in leadership and management – specially designed by employers – to ‘boost the capabilities of future business leaders’.

Melanie Nicholson, director of skills at Serco, said: “Serco, as the lead employer developing the new degree-level apprenticeship in management and leadership, is delighted that government is today highlighting the importance of developing new and existing managers as part of the drive to improve the productivity of the country.

“Developing this apprenticeship will provide a real opportunity to those seeking professional management careers in all sectors."

Petra Wilton, director of strategy at CMI, also welcomed the report, and said the renewed focus on improving management skills would help provide the ‘missing piece’ in the productivity puzzle.

“Improving management has long been the missing piece in solving the UK’s productivity puzzle,” she said. “The government’s support for developing higher-level management and leadership skills is welcome news. CMI research has shown that the UK lags behind its European competitors in terms of investment in management development.

“There are too many accidental managers, particularly working in SMEs. There is an urgent need to professionalise management. The government’s backing for this new management degree-level apprenticeship will help train a new generation of managers and leaders who will be essential for energising UK Plc.”

The government also intends to improve access to funding for small businesses and would-be entrepreneurs in order to help firms realise their potential.

Apprenticeships still key

The report also includes further details about the apprenticeship levy announced in Wednesday’s Budget, which will run in conjunction with the new degree level apprenticeship scheme detailed in the report.

The new levy will apply to all post-16 apprenticeships via the digital voucher scheme to ensure that it delivers the training individual apprentices need at a reduced cost to the employer.

The levy is in response to a growing concern that employers are not doing enough to train their staff and invest in the development of their employees, and responds to employers’ concerns that if they invest in training their employees, competing firms will free-ride on their investment.

The graph below highlights the scale of how little is being done to train future leaders, showing how less than 20,000 employees a week are now attending formal training sessions outside of the workplace after figures peaked at more than 180,000 in 1999.

Employees who spent time on training courses away from the workplace

The Chancellor believes introducing the levy will mean companies will have to focus on nurturing young talent and apprenticeship schemes will flourish as a result.

Such levies already exist in other European countries such as Germany, France and Denmark, as well as more than 50 other countries around the world.

Speaking after the launch of his productivity plan, Osborne said: “The only way to sustainably raise the living standards of the citizens of our nation is to confront the challenge of our lifetime, to raise productivity. This will not be achieved over night and will require a truly national effort by government, business and working people.

“But with this blueprint to fix the foundations of our economy, I believe that we have taken the vital first step towards securing the prosperity and a livelihoods of generations to come.”