An acute shortage of skilled workers is threatening to jeopardise the Northern Powerhouse, workforce expert Manpower has warned. 

North-East employers are the UK’s most optimistic when it comes to job creation – but they can’t find skilled workers to fill the vacancies.

 Chancellor George Osborne is championing the Northern Powerhouse project, which is aimed at re-balancing the economy towards the North, and has made it one of his main priorities.

 But while more than 10 per cent of North-East employers are planning to recruit in the third quarter of 2015 – the highest rate in the UK – the latest Manpower Employment Outlook Survey has found that a severe shortage of suitable candidates, especially in the IT sector, could hinder expansion plans.

 Information in the survey – used by the Government and the Bank of England as a key economic statistic – is based on responses from more than 2,000 employers across the UK, who were asked if they intend to increase or reduce their workforce in the coming quarter.

 Manpower’s survey backs up similar findings from professional support firm PwC last week and initiatives from the North-East Local Enterprise Plan (LEP) to close the skills gap in the region.

 Amanda White, Manpower's  operations manager, said its research showed a shortage of candidates, which meant many employers were struggling to fill their vacancies. 

Mrs White said: “George Osborne may dream of a Northern Powerhouse, but the reality will be a Northern power cut if we don’t see more talent coming into the market.

“We see skills shortages as the single biggest barrier to the North’s growth across all sectors.

“While many employers in the South can rely on a steady supply of workers, there are far fewer qualified candidates in the North.

 “Traditionally, the North-East has been a hub of manufacturing activity; however employers are now struggling to fill skilled roles in areas such as electrical, mechanical and civil engineering and plant machinery operation.

“Employers are crying out for candidates with IT experience, especially web developers.”

The survey echoes the findings of a report by business advisers PwC, in which 75 per cent of 1,300 chief executives identified the skills shortage as the biggest threat to their business. 

The CEOs say the skills crisis is at its worst point for six years and, to fill the gaps, they are having to increase their use of freelance and part-time employees as well as outsourcing and service agreements.

Bill MacLeod, PwC’s senior partner in Newcastle, said: “Despite rising business confidence and ambitious hiring plans, organisations are struggling more than ever to find the right people with the right skills to achieve their growth plans.

“Businesses feel that the Government has an important role to play in solving the skills gap – six in 10 said creating a skilled and adaptable workforce should be a top priority for government.”

The two surveys come just a week after North East LEP interim chief executive Bob Paton spoke of improving careers guidance in schools to get more young people interested in sectors where there are well-paying and rewarding jobs.