DORSET has a serious “productivity gap”, with each hour worked contributing £4.90 less to the economy than the national average.

The gulf is costing the county £3billion in lost output, according to a report which says housing costs, infrastructure and deprivation in some areas are all barriers to productivity.

The Dorset Local Skills Report is aimed at providing employers, trainers and the education sector with data to help “level up” and raise prosperity across the county.

It also found a “significant” gap in attainment in education, starting in pupils’ early years and widening at secondary school levels.

Aspiration was often lower in rural areas, while the county suffers inequality in earnings, outcomes and housing affordability, the report by the Dorset Skills Advisory Panel noted.

The panel’s chair, Luke Rake, who is principal of Kingston Maurward College near Dorchester, said “Dorset’s productivity gap is concerning, but there has been some positive movement in metrics with average output per worker increasing and remaining higher than pre-pandemic levels.

“This was partly explained by a leap in technology innovation for businesses adapting to remote operating models and highlights it is vital that we continue to invest in innovation and digital technologies to build resilience and boost productivity.

“The report also makes clear that we must continue to support best business and management practice, offer flexible learning opportunities across the lifespan and ensure an optimal skills mix is available for the top performing organisations to grow further, develop their staff, and access the high-quality educational institutions that are right on their doorstep.

“It is pretty well known that housing affordability, problems in infrastructure, pay gaps and areas of deprivation in Dorset create barriers to productivity growth, talent development, attraction and retention and cause the experience of living here to vary widely. While Dorset is a moderately affluent county, there are pockets of significant deprivation, with 15 neighbourhoods amongst the most deprived in England and areas of postcode lottery performing particularly poorly in terms of social mobility.

“With inflation at its highest in 30 years, energy prices and cost of living soaring, these challenges have worsened with Covid -19, hence why removing inequality forms one of our most important strategic ambitions.

“The evidence is strong that apprenticeships are one of the most effective tools in improving social mobility. In Dorset 91 per cent of completed apprenticeships ended in a sustained employment destination which is higher than the rate seen nationally, and we have some really positive general destination outcomes from our education providers.”

The full report is at dorsetlep.co.uk/local-skills-report