Government hopes productivity plan will increase UK’s GDP

Business Secretary Sajid Javid launched the 15-point plan/REX

The Government has today launched its “productivity plan” – a framework that it claims will reverse the UK’s lagging productivity and improve economic output.

The 15-point plan, called Fixing the foundations: creating a more prosperous nation was announced by business secretary Sajid Javid, who claimed that if the UK could match the US for productivity, GDP would go up by 31%.

The proposals in the plan focus on long-term investment and promoting a dynamic economy, said Javid.

This includes setting up a business task force led by John Lewis chairman Sir Charlie Mayfield to come up with ways that UK employers can improve productivity.

The plan also sets in stone the “apprenticeship levy” that was announced in this week’s budget, which will see employers paying for, and having more control over, the types and quality of apprenticeships on offer.

Full details on how this will work are yet to be announced, but the Government has said that it will undertake “formal engagement with business on the implementation of the levy”.

There are also plans to radically simplify and streamline further education qualifications, including the creation of a network of Institutes of Technology.

In his speech to launch the plan, Javid said: “Britain is home to some of the world’s most innovative and dynamic businesses, staffed by incredibly talented, hardworking individuals,” he said.

“Yet our productivity – the rate of output per hour worked – is well below its potential. In stark terms, it now takes a worker in the UK five days to produce what his or her counterparts in Germany can deliver in four.”

Business group the CBI welcomed the launch. Director-general John Cridland said: “This ambitious plan from the Government will help our economy move up another gear.

“Creating better routes into the higher skills needed for today’s jobs market is something we have been behind all along, so we are glad to see the Government making this the centrepiece of its plans to power up productivity with the creation of Institutes of Technology.”

But Ben Wilmott, CIPD head of public policy, said that the plan was “fatally undermined by a weak skills strategy”.

He said: “We have a high proportion of people in low-skilled and low-paid jobs by international standards and an equally high degree of over-qualification with too many employees unable to use the skills they have because of poor leadership and people management, inadequate work organisation and poor job design.

“We also have a perfect storm of falling public and employer investment in further education and training. A simplistic focus on increasing employer investment in apprenticeships through a levy risks taking money away from broader investment in workforce development.”

Chris Jones, chief executive of City & Guilds Group added that the “devil will be in the detail”.

He added: “I always get worried when I hear Government talk about ‘radical change’. As our recent report into skills policy showed, we have had three decades of constant change in skills and employment policy,” he said.

“In order to boost productivity and strengthen the UK’s skills base, we need stable, long-term planning that gives new policies a chance to mature. I am keen to see how core aspects of this plan will be implemented in practice, including the apprenticeship levy.”

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