Teacher, engineer, IT worker, nurse - where have all our trained staff gone?

Scarcely a day goes by in Britain's booming economy without news of the scarcity of skilled workers. Last week it emerged that some schools are having to close one day a week for lack of staff. The country is so short of experts in information technology that the Government is "fast-tracking" immigration procedures for foreigners with the necessary skills.

Scarcely a day goes by in Britain's booming economy without news of the scarcity of skilled workers. Last week it emerged that some schools are having to close one day a week for lack of staff. The country is so short of experts in information technology that the Government is "fast-tracking" immigration procedures for foreigners with the necessary skills.

We are poaching so many nurses overseas that some countries are starting to complain. We cannot find enough chefs, shop assistants or hotel receptionists; last week it was reported that 5,500 vacancies for skilled hospitality staff exist in Greater Manchester alone. Even the England football manager had to be hired abroad.

Are we running out of people, or is the problem a shortage of skills? Is there any connection between sectors, notably in IT, where there are not enough Britons with the necessary training, and those, such as teaching or nursing, where many trained people do not want to do the job?

Richard Scase, professor of management at the University of Kent, believes there is a common thread among all the tales of staff shortages. "We are suffering a hangover from Thatcherism, which focused on short-term benefits, self-interest and a winner-take-all mentality," he said. "The culture of British business mirrors that of British football. Instead of training their own players, clubs buy in highly paid players and managers on short contracts, then sack them if they do not produce instant results."

While the gap between the highest and lowest paid in the private sector has widened hugely, the rewards are still far better than in the public sector, which has been downsized, starved of funds and robbed of its self-respect.

"The introduction of the methods of retail management in the public sector has destroyed the idea of altruism," Professor Scase said. "It is hard to lure young people into high-stress jobs which do not pay enough to afford a house in the South, especially when they have unconsciously absorbed the Thatcherite view of the public sector as a bunch of whingers who would be in private-sector jobs if they were any good."

The largest number of vacancies is in the lowest-skilled jobs, in retail sales, catering and hotels. "Walk 100 yards in central London and you will pass four advertisements for jobs in shops and coffee bars," said Andy Westwood, head of policy and research at the Industrial Society. "In full-employment towns around London, such as Chelmsford and St Albans, companies such as Tesco have to pay more than £6 an hour to keep staff. That in turn makes it difficult to find anyone to look after your children.

"But these labour shortages are localised. Things are far worse in the public sector, because the problem is national. Across the board it is failing to fill vacancies, because it has simply been left behind in a rampant labour market."

He believes Labour was too cautious when it took office in 1997. Having committed itself to the Conservatives' short-term spending targets, and aiming to keep inflation low, it made only modest increases in public-service pay. "But certain sectors of the economy just took off, making the gap much wider."

Add to this a slump in the number of 16- to 24-year-olds, who have declined by a third in the past 10 years; the huge number of workers made redundant or encouraged to retire in their early fifties (described by Mr Westwood as "the folly of the 1980s and early 1990s"); highly restrictive immigration policies and sheer prejudice (in Birmingham a recent survey found 30 per cent of black graduates were unemployed) - and you have a crisis, says Professor Scase, though he doubts if there is a skills shortage as such. "It depends how you define skills," he said. "Many organisations waste talent. Some areas, such as medicine, accountancy and architecture, are over-professionalised; nurses and assistants could do more responsible work."

The Government is looking at the longer-term problem of investing in skills, with cash incentives in the next Budget mooted. David Blunkett, the Education Secretary, and Stephen Byers, the Trade and Industry Secretary, are drawing up a White Paper. which highlights the problems caused by de-skilling under the Tories with the closure of much of Britain's heavy industrial manufacturing base, which saw thousands of engineers consigned to the dole. "They made 8,000 engineers redundant when they privatised British Rail. They are needed now, but where have they gone?" one minister asked.

One option being pressed on the Chancellor, Gordon Brown, is to allow tax breaks to encourage engineers who have taken early retirement to return to work part-time - an incentive that people such as Mr Westwood believe should be extended to other sectors.

Ministers blame much of industry for "short-termism" in cutting training to reduce costs. They are urging companies to follow the example of Bentley, the luxury car maker, which is creating 200 new apprenticeships. BP is also praised for taking long-term skills seriously, unlike most of Britain's oil industry. But the public sector is similarly guilty, Mr Westwood says, and is resorting to "panic measures". Would-be teachers are being paid £5,000-£6,000 during training, and local authorities are adding incentives such as help with housing. Some are copying the private sector, offering a choice of benefits such as flexible working hours. There are attempts to fill the training lag by appointing teaching and nursing assistants, as well as hiring overseas.

The Industrial Society expert is not impressed. "All the emphasis is on quick fixes. Little attempt is being made to lure back trained people, for example. But in the end they will simply have to pay more."

As the White Paper is expected to admit, however, there are no easy solutions. Since 1979 there has been an emphasis on moveable skills and selling your labour to the highest bidder. That not only undermines the notion of training someone who may immediately leave for another employer, it has eroded the whole principle of public service. A change of culture is needed, and that takes time.