Small and medium-sized enterprises (SMEs) in London are finding it increasingly hard to recruit skilled workers, a new report suggests.

Over three quarters (74 per cent) of the businesses questioned as part of the latest CBI/KPMG London Business Survey reported difficultly in recruiting staff with adequate literacy, numeracy and IT skills.

More than eight in ten (81 per cent) said they think this problem will get worse in the future.

The study found that employers recognise that government schemes are trying to address these shortages, but 70 per cent of SMEs said they were dissatisfied with results at the moment.

"London is one of the world's most dynamic and successful cities and is going from strength to strength, with business positive about the future," explained Richard Lambert, the Confederation of British Industry's director general.

"However it will shock many to discover that the city has the highest unemployment rate of any region in the UK while, at the same time, employers are increasingly struggling to fill skilled job vacancies.

"The government and Ken Livingstone are aware of the situation but we need a step-change in education and training delivery to ensure we have the highly-skilled workforce we need to stay ahead of the global competition.

A recent report from the Chartered Institute of Personnel and Development suggested that company IT systems can play a vital role in ensuring staff develop and learn while working.