Improving skills is vital to ensuring growth is shared more equally

Yesterday's UKCES report lays out the UK's skills challenge – cities should be at the forefront of solving it.

The UKCES’ Growth through People report published yesterday calls for urgent action to be taken in response to the skills challenges facing the UK. This latest report is partly a consensus building exercise. It’s backed by the TUC and CBI amongst others, and there is broad agreement about what the challenges are, what the priorities for action should be and that there is a need to ensure skills are positioned on a ‘much broader canvas’.

The challenge

Although positive, headline employment figures can mask the ways in which the workplace has been irreversibly changed by technology and globalisation, creating significant challenges for pay and progression. The continued loss of middle income jobs risks more people getting trapped in low skill, low wage work. 1 in 4 jobs in the UK only require the educational attainment of an 11 year old, compared to less than 1 in 10 in Germany and the US. And the lag in productivity growth in the UK means that real wages aren’t expected to return to pre-recession levels until 2018 at the earliest.

Investment in people is critical to improving the productivity of businesses and to ensuring that growth is shared. Without that investment, the UK faces an economic recovery that is characterised by low growth, rising inequality and that is ultimately unsustainable.

But just as important is getting the balance right between stability in the overarching policy landscape and flexibility in terms of how local actors can respond to the distinct challenges they face.

The response

The Commissioners are clear that the response to this challenge needs to be employer-led and that the government should play an enabling role. A key factor for success – one that sits behind all five priorities for action – is collaboration. As Fiona Kendrick from Nestlé put it at yesterday’s launch event: “it’s about making the connection more than anything else”, whether that’s across supply chains, with industry partners, or with local schools and FE colleges.

This is where many cities are already leading the way. Leeds, Manchester and a number of other LEPs have established Apprenticeship Hubs to help small businesses recruit apprentices. Other local partners have used Employer Ownership pilot funding to broker relationships between local SMEs and skills providers. In recognition of the need to align supply more closely with demand by enabling learners to make more informed choices, cities and LEPs are also working to improve the quality and accessibility of local labour market intelligence.

While there are multiple examples of good practice, the UK is not yet achieving the scale and impact that is needed, and the skills and employment system is still too fragmented. Cities can play a major role in facilitating the networks that ‘join the dots’: creating new and better pathways into employment and building pipelines of talent for local businesses.

Centre for Cities would like to see co-commissioning powers for skills and training given to cities so that provision is aligned more closely to the needs of local businesses and communities. Manchester’s recently announced ‘devolution deal’ provides a real opportunity to take a significant step forward here, but there remains far more to be done.

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