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London is facing a skills shortage which could impact its economic recovery, a new report claims.

The biannual London Business Survey, carried out by the Confederation of British Industry (CBI) and professional services provider KPMG, shows that 38 per cent of companies in the city believe that the skills gap is still a problem, despite rising unemployment creating more candidates.

According to the research, the transport sector is the worst hit with 56 per cent experiencing trouble finding talented workers, while 52 per cent of manufacturing or construction firms and half of hospitality or retail businesses are also encountering problems.

In addition, the survey reveals that 56 per cent of firms believe public-funded training schemes are easy for candidates to access, although just 28 per cent think they are beneficial and 45 per cent consider them neither useful nor relevant.

Nigel Bourne, director of CBI London, comments: 'The skills shortage remains an Achilles' heel for the capital. Even though jobs are being lost and demand has fallen, London businesses still complain that they can't match talent to jobs.'

He adds that this could damage the city's ability to capitalise on the eventual economic upswing and calls for government training initiatives to be better matched to the needs of companies.

The Federation of Small Businesses recently suggested that a designated Small Business Sector Skills Council be established in the UK to better meet the training needs of the country's micro-companies.

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