Manufacturers’ organisation Make UK has called on the government to set up a Skills Task Force to keep key skills in the industry as redundancies loom.
The organisation’s latest survey found that a quarter of companies plan to make redundancies in the next six months, as orders continue to decline and the government’s furlough scheme is wound down.
The government announced that its Coronavirus Job Retention Scheme will continue until end of October but that from August, employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October. Workers will be allowed to return to work part-time from July, but with employers responsible for paying their wages while they are in work.
Make UK called for a skills task force on the lines of a similar scheme set up after the 2008 financial crisis, but on a larger, national scale. Its aim would be to retain key skills in the industry by redeploying employees who have lost their jobs to other companies and enabling them to be re-trained.
It also called for targeted support for strategic manufacturing sectors such as aerospace, automotive and steel, and for regions of the UK which have a high dependency on these sectors.
Make UK said the government had been right to focus on the immediate need to protect individuals and jobs via the job retention scheme. However, it now believed that “a more radical approach is needed to protect the internationally competitive position of key strategic sectors”. Unless direct financial support was provided during the recovery phase, as well as removing restrictions on loans, it believed “major companies may be damaged to such an extent that they will not be in a position to take people off furlough and will resort to substantial redundancies”.
Its latest survey, published at the end of May, found that the number of companies operating in some capacity stood at just under 95%. However, a quarter of companies plan to make redundancies in the next six months, with a further 45% possibly planning to do so. Just under a third (30%) did not plan to make redundancies.
Of companies that planned to make redundancies, over a third (33.3%) plan to make up to 10% of employees redundant, while over a quarter (28.9%) planned to make up to half their staff redundant.
The number reporting a decline in orders of over a half was up to 32%, and 38% believed it would take more than a year to return to normal trading conditions.
Make UK chief executive Stephen Phipson said: “Industry and government must leave no stone unturned to retain as many key skills as possible within the sector to ensure it is in a position to recover when growth returns.” He added that many fundamentally sound businesses “may not survive without direct government intervention”.