Urgent action needed to tackle Birmingham’s skills deficit, as new report shows city has UK’s highest share of residents with no qualifications

This is according to a new report published today by the think tank Centre for Cities, supported by ISG, the global construction services company. It offers an in-depth analysis of the strength of Birmingham’s skills profile, and the implications this has for the economic prospects of the city.

The report highlights that skills levels are a crucial factor in determining the strength of a city’s economic performance, and that places with a highly skilled population tend to be more productive, as well as having higher average wages and employment levels

It reveals that Birmingham face a number of significant skills challenges, which if left unaddressed will adversely affect the city’s economic growth, and the prosperity of people living and working within it:

• Birmingham has the highest share of people with no qualifications of any UK city. The report shows that 16% of working age residents living in Birmingham have no formal qualifications – twice as high as the national average (8%), and more than any other city in the country. This issue is particularly acute for adults aged 50-64, as more than in five Birmingham residents (22%) in this group have no formal qualifications – nearly twice as high as the national average (12%).
• The city’s schools are also underperforming. This is highlighted by GCSE attainment in Maths and English in the city, which is widely recognised as having a strong indicator of young people’s future job prospects. In 2015-16, just over half of students in Birmingham (53%) undertaking GCSEs gained A*-C in five or more subjects including English and Maths, less than the average across England (58%).
• However, Birmingham performs better in terms of attracting and retaining students and graduates. The city attracted the fourth highest number (44,500) of new students of any UK city in 2014-15, and has the sixth highest graduate retention rate in the UK, with 49% of new graduates staying in the city to work after university in 2014 and 2015. It is also the third best performing city in the UK in attracting graduates who have no prior links to the city.

The report calls for action from national and local leaders to both improve skills levels across all age ranges in the city, and to increase the number of high skilled firms and jobs in the city – both of which will be crucial for strengthening the city’s economy. Key recommendations include:

• Focus on improving literacy and numeracy skills among school students of all ages, as this is one of the best ways to improve their career prospects. This should be a top priority for local leaders, and should be coupled with a drive to improve early years support for young children in the city, particularly by encouraging greater uptake of the existing early education support for disadvantaged children.
• National government should give local leaders more powers and resources to support working age residents to gain training and qualifications. For example, Andy Street, the West Midlands metro mayor, has set out plans for a West Midlands Skills Fund based on the Apprenticeship Levy paid by firms in the city region. However, he currently lacks the scope to use the Apprenticeship Levy in this way. The Government should build on the city region’s current devolution deal by giving the mayor and local leaders in Birmingham greater powers to act on this issue, and to tackle the city’s wider skills challenges.
• Continue to support the resurgence in Birmingham’s city centre, and to improve transport and the quality of the built environment. Strengthening transport links and creating more quality office space in the city centre will be crucial in attracting more of high skilled, knowledge intensive firms, which will be increasingly important for the city’s economy in the coming years. This in turn will bring more high paying, high skilled jobs – creating more opportunities for residents, and making the city more attractive to high skilled workers from elsewhere.

Commenting on the report’s findings, Andrew Carter, Chief Executive of Centre for Cities, said:

“Birmingham has seen some really positive economic developments in recent years, from the transformation of its city centre to its success in attracting companies such as HSBC and Deutsche Bank. But the city will need to secure many more of these kinds of firms and jobs to get its economy firing on all cylinders. Moreover, too many people in the city lack the qualifications they need to benefit from these opportunities.

“Tackling skills gaps in the city will be crucial in ensuring that its economy can continue to grow, and that more people can share in its success. This should be a top priority for national and local leaders. That means taking steps to improve the performance of schools across the city, to give children and young people the skills they they need to thrive as they get older. It also means putting more focus on adult education and lifelong learning, to help people move into work and access better-paid jobs.

“Finally, the Government should give Mayor Andy Street and local leaders in Birmingham more powers and resources to tackle the city’s skills challenges. Doing so will be crucial in enabling Birmingham to realise its economic potential, which will help to increase prosperity for the millions of people living across the city, and for the country as a whole.”

Wayne Flannery, regional director at ISG, said:

“As the UK’s second city, Birmingham has an immense amount to offer, but our wide-ranging report suggests that we aren’t maximising the potential that we have. Whilst our universities are a significant pull factor for the city, our schools underperform and we need to urgently address why so many in our communities have no formal qualifications.

“This research is a clarion call for all relevant agencies and institutions to work together to provide a more robust framework to upskill and retain the talented people that live and work in our city. The opportunities for growth and inward investment are self-evident, with major projects like the recently announced £135 million Lunar Rise development, but we need to ensure that we continue to attract the right skills and expertise up and down the supply chain to deliver such ambitious projects.”