When I visit businesses across the country, there is a common refrain when it comes to skills: we have real shortages, especially in key sectors like manufacturing and construction.

But when you dig a little deeper, the make-up of these shortages often doesn’t match up against what you would expect from the wider skills debate. Yes, firms need graduates and entry-level apprentices - but it is at the technician level that vacancies are most common, and most challenging.

That’s no surprise when you think about how work has changed. It’s fashionable to talk about an “hourglass” labour market, implying that mechanisation has removed middle-skilled jobs. Firms know that isn’t quite right. There is a middle to our labour market still. It is just in new, slightly more skilled jobs. So we have fewer machine operatives, but the people you find on our factory floors today are doing different, technology-enabled jobs that require more and better training. At the same time, whole new roles have formed - manufacturers need cyber security people now, for instance.

This rising demand is a challenge to our skills system. Most apprenticeships and many college courses have focused on delivering up to Level 3, while HE had focused on Level 6 and above. While we do have some platforms at Levels 4 and 5, they are still too few in number and too rarely used.

The result of all this is that the route for young people into middle-skill jobs is longer and more difficult than it was in years past. This is why we can see firms suffering skills shortages in the same area as young people struggling to find their feet in the labour market.

‘Getting apprenticeship standards right’

Resolving this is a shared challenge for businesses, providers and government. Businesses will need to step up to help T levels work so that young people can get to Level 3 at 18 via vocational routes and are ready to take on higher level courses, whether new apprenticeship standards at Level 4 and 5 or other forms of provision.

Getting those apprenticeship standards right - and ensuring the levy is flexible enough to fund them - is a shared challenge for government and business working together.

For local and national government, fostering effective local and sectoral skills markets, with good advice for learners and strong links between employers and providers on demand for provision is a key challenge. But there is another big priority: developing the provision base to deliver more Level 4 and 5. We need a supplier strategy.

The CBI has always liked the Institutes of Technology as an idea for this reason - we do need arrowhead institutions, working alongside existing providers to boost the amount of Level 4 and Level 5 training we do. This will close skills gaps and open up great career pathways for learners.

But the risk is clear: new forms of provision can get drawn into the old system, rather than changing it. In this light, I can understand why some commentators worry that if universities took a leading role, as some of the election commentary on this issue seems to suggest, this would lead to too much focus at Level 6, where we are not short of provision.

The answer to this is to stay focused on the main thing - delivering at Level 4 and 5. Some of this can be addressed by measuring training more by subsequent learner progression, rather than people doing the course. Effective Level 4 and 5 provision should have strong pay-offs for learners. But we must also ensure the provision offered is additional to what we already have.

It is absolutely clear that colleges and universities have a role to play, but Institutes of Technology must be clearly focused on these roles of the new middle if they are to be a success.

When we meet ministers after the election, this will be the CBI’s message. Let’s make sure our focus is on high-quality routes that really help people’s careers and close skills gaps. That must mean a lot more Level 4 and 5, delivered by institutions who focus on this. If we get that right, we’ll start to see those skills gaps close.

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