Serious about economic growth? Then it’s time to get serious about investing in skills

Whatever your politics, I’m sure we can all agree that last week’s budget was a momentous one, with announcements of big tax rises alongside substantial increases in spending on public services and on investment; and the first ever budget delivered by a female chancellor.

The government’s focus on growing the economy and ensuring that all parts of the UK realise their potential is incredibly important; particularly so in the West Midlands, where economic growth, productivity, employment, wages and qualification levels are all below the national average – acting as a break on the prosperity of the region and on the life chances of its residents.

With a third of the WMCA population aged under 25, and youth unemployment higher than in any other Combined Authority, the Chancellor’s commitment to getting more young people into work and to making work pay, by raising the National Minimum Wage for apprentices and for young people, is extremely welcome. And given the Mayor’s ambition for the West Midlands to become the place where young people have the best possible start to their working life, the region is surely well placed to be one of the eight Youth Guarantee Trailblazer areas, testing new ways of supporting young people into employment or training.

Declaring that “every budget I deliver will be focused on our mission to grow the economy”, the Chancellor used her budget speech to set out the case that “the only way to drive economic growth is to invest, invest, invest.” And many will agree. In my new role as Chief Executive as Skills Federation, the voice of employer-led sector skills bodies, I was particularly pleased to see a commitment to long-term funding for growth-driving sectors, such as advanced manufacturing here in the West Midlands.

But for me, the evidence is clear, any government serious about achieving its economic growth ambitions also needs to be serious about investing in skills. The £300m for further education and £40m to transform the Apprenticeship Levy into a more flexible Growth and Skills Levy are a welcome first step. Indeed, this should be an exciting opportunity to expand and develop WMCA’s successful Path2Apprenticeship programme and turn around the dramatic decline in apprenticeship opportunities for young people seen across the region in recent years. But there is much more to do.

As government continues to develop its strategy and investment plans in this area, the focus on responding to the skills needs of industry must remain a priority. Alongside a commitment to ensuring that young people develop the skills they need to succeed in the workplace, it is also vital that we see increased investment – by both government and employers – in training opportunities for adults. After all, 71% of jobs in 2035 are expected to be filled by someone already in the workforce.

And perhaps what really makes this budget momentous for the West Midlands was the announcement of the integrated funding settlement for the region, giving the Mayor local control over funding in a single flexible pot to achieve his ambitions around good jobs, affordable homes, better journeys and real growth. Investment in skills is key to achieving all of these ambitions and should now be the golden thread that runs throughout.

The West Midlands region has enormous potential, but it also faces persistent and long-standing challenges that cannot be fixed through national programmes and policy levers. The opportunity now ahead – for partners to come together to develop localised evidence-based solutions and deliver real change – is an important and powerful one. Only time will tell what difference we can make when we work together. The future is in our hands.

This is a personal blog post.  Any opinions, findings, and conclusion or recommendations expressed in this article are those of the authors and do not necessarily reflect the view of the Centre for the New Midlands or any of our associated organisations/individuals.

ABOUT OUR AUTHOR:

Dr Fiona Aldridge is the Chief Executive of the Skills Federation, the voice of employer-led sector skills bodies.  Fiona is also a Non-Executive Director for Youth Futures Foundation.

Prior to joining the Skills Federation, Fiona was Head of Insight and Intelligence in the Economic Delivery, Skills and Communities Directorate at West Midlands Combined Authority (WMCA), having joined the organisation from the Learning and Work Institute where she was Director of Policy and Research.

Fiona has more than 20 years’ experience of undertaking research to support the development of policy and practice across adult learning, skills and employment.