Improving skills will strengthen economic growth
By Nigel Brewster, LEP Board Member and Partner at Brewster Pratap Recruitment Consultants
Type “Northern Powerhouse” into your search engine and you’ll get over four million results. Right now the phrase is rarely out of the spotlight with most of the rhetoric centred on long overdue investments in transport infrastructure in the North.
However, what gets missed by the headlines is that the most important driver to creating a Northern economic powerhouse will be improving its skills base. A recent think tank report showed that Sheffield City Region has experienced rapid job growth over the past decade – placing our area among the fastest growing in terms of job numbers in the UK. Whilst it is great news that unemployment is falling, getting people into jobs isn’t enough on its own. For real, sustainable growth we need people to be able to get better quality jobs with better pay, and to do that we need give them access to the right skills training.
The Sheffield City Region, alongside Leeds and Manchester, is in the vanguard of City Regions to be devolved new powers. And this isn’t devolution for devolution’s sake – or for the sake of a few headline-grabbing frontpage articles. We’re at the forefront because we believe that local leaders and businesses have a better understanding of how to grow our local economy than ministers and civil servants in London.
We’re in talks with government right now to do a deal which will take us another step closer to being able to achieve our vision to create 70,000 jobs and create 6,000 businesses over the next decade. Improving the way in which skills training serves the needs of both businesses and individuals will be at the heart of our deal.
I work in the recruitment industry and my work brings me in to contact with business leaders from many different industries. What they tell me is that, although the government funded training they access is good, it isn’t giving their businesses the skills training they need to grow. I also get to meet many truly brilliant and very capable young people – people who are often already highly skilled but don’t have the skills that will get them a job which equals their abilities. It is little wonder then that more than 1 in 10 people in the North consider themselves to be underemployed – we all know people who are highly skilled but can’t demand better wages because their skills don’t match the needs of their employer.
In the Sheffield City Region we’re creating a skills programme designed to accelerate economic growth by closing the gap between what businesses need and what skills training is available. The way in which the skills system is currently set up focuses on ‘learner demand’. Whilst this rightly gives people the ability to select the training, skills and qualifications they find of interest, it is not designed to maximise a business’s growth potential. Our LEP, with the private sector at our core, is taking control of the skills system so it better responds to ‘business demand’ – to give businesses the ability to ensure the skills system provides the skills they need to grow.
Sheffield City Region LEP has already started this journey by successfully negotiating devolved funding from central government to create a locally managed ‘Skills Bank’. The idea behind the Skills Bank is to give employers greater purchasing power and control in how government funded training is accessed by making skills based ‘growth deals’ directly with businesses. These deals will provide government funded training that is directly linked to unlocking business growth – areas which link to real business concerns, like exports and emerging markets for example. This means businesses will be able to see real returns on their skills investments. Our deals will also offer greater flexibility in the type of training that is available, making it easier for businesses to participate in all levels of training from apprenticeships to higher education.
It is clear that we need to raise the skills levels of our workforce if we are to rebalance the local economy and if our businesses are to be globally competitive. As our economy recovers, hard to fill vacancies will continue to increase and skills gaps in key sectors will grow.
Through the Skills Bank, and the outcome of any future deals with Government, we are taking some big steps in the right direction, but we’re far from a cure-all for these complex issues. The LEP will work hard with the many high quality colleges and training providers that exist in the Sheffield City Region to ensure our workforce has access to the skills they need to fulfil their potential and the potential of our economy.