Over a quarter of small businesses have difficulties finding suitably skilled staff at start up, despite there being 2.62m people unemployed, according to figures from the Federation of Small Businesses (FSB).

As 95% of private sector businesses employ fewer than 20 members of staff, the FSB believes that reducing the financial and administrative barriers to taking on more workers will be key.

The Federation has launched an inquiry into the matter alongside the All Party Parliamentary Small Business Group (APPSBG), and is calling on the government to take measures including the reinstatement of the graduate internship scheme and prioritising ‘enterprise education’.

John Walker, national chairman of the FSB, says: “With the private sector being relied on to drive economic recovery… budding entrepreneurs should be supported in setting-up in business, and existing businesses should be encouraged to innovate, take on staff and grow.”

Brian Binley MP, chairman of the APPSBG, says: “I know that John Hayes, the skills minister, is working hard to bridge the skills gap, which is especially important to the precision engineering companies in my own constituency of Northampton.

“However, John Hayes’s work is being hampered by the poor performance in our primary and secondary schools, especially with regard to literacy and numeracy and whilst Michael Gove, the education secretary, is pulling out all the stops there is still a lot to do.”