Anne Green and Abigail Taylor discuss skills policy in the UK. How can we improve skill provision to reduce regional economical disparity? This blog post was produced for inclusion in the Birmingham Economic Review for 2022. The annual Birmingham Economic Review is produced by the University of Birmingham’s City-REDI and the Greater Birmingham Chambers of Commerce. It is an in-depth exploration of the economy of England’s second city and a high-quality resource for informing research, policy and investment decisions. This post is featured in Chapter 3 of the Birmingham Economic Review for 2022, on people and challenging times. Read the Birmingham Economic Review. Visit the WMREDI Data Lab to find out more about Birmingham.
Skills are a key driver of economic disparities between people and places. In the Levelling Up White Paper, one of the 12 Levelling Up Missions focuses on Skills:
By 2030, the number of people successfully completing high-quality skills training will have significantly increased in every area of the UK. In England, this will lead to 200,000 more people successfully completing high-quality skills training annually, driven by 80,000 more people completing courses in the lowest skilled areas.
This ambition chimes with the policy direction set out in 2021 in Skills for Jobs: Lifelong Learning for Opportunities and Growth. This White Paper emphasised the need to raise educational standards, increase the level of high-quality skills training available to learners and put employers at the heart of the further education and training system in order to align education and skills provision with the needs of the economy.
As noted by the Institute for Government, levelling up and skills policy needs to have a three-fold focus. First, there is the need to improve skills for those entering the labour force. Secondly, given the length of working lives and changes in skills requirements, improving lifetime learning and retraining provision is essential. Thirdly, there needs to be an emphasis on skills utilisation, through improving the match between skills and jobs. The latter emphasises the importance of labour demand and the importance of breaking out of low-skills traps. This requires looking beyond skills policy to broader economic development policy concerns with making Birmingham attractive to businesses and skilled workers.
Research conducted by WMREDI indicates that within Birmingham and the wider West Midlands universities and colleges already contribute considerably to up-skilling and reskilling through developing future sectoral skills, piloting new ways of learning, supporting graduate employability, addressing access to higher education (HE) barriers, developing pathways between further education (FE) and HE, introducing applied higher-level skills development initiatives and working with regional governance stakeholders. Nonetheless, the research suggests that to effectively address the skills challenges that the West Midlands is facing and support levelling up, there is a need to prioritise expanding partnerships and integration between HE institutes and FE institutes and other regional stakeholders. To maximise the effectiveness of partnerships, the broader role of universities in relation to skills and economic development should be recognised across regional stakeholders. Partnerships need to build on the strengths of FE and HE.
In terms of equipping residents and workers with the skills that businesses need, now and in the future, one important focus of policy attention is digital skills. There is a predicted national digital skills shortfall. This is concerning for Birmingham (and the West Midlands) given the recent rapid growth experienced by the tech sector and the potential for future growth. Given the importance of digital skills in many roles and businesses, there is a need to ensure that all people acquire basic digital skills (i.e. are sufficiently digitally literate to participate in society and the economy). But digital skills for levelling up also require digital skills for the general workforce, which vary by sector and occupation. To drive productivity and growth digital skills for ICT professionals – that are essential to the development of new digital technologies and to new products and services – are required too. Birmingham is active in promoting digital skills at all of these levels and has also led in investment in no-code provision to provide people with skills which can help launch new services and products and underpin the creation of new enterprises.
Indeed, growing skills in the digital sector is one of the priorities in the West Midlands Combined Authority Regional Skills Plan. The West Midlands Plan for Growth also stresses the importance of developing future skills pathways across the West Midlands primary clusters (which include healthtech and med-tech, aerospace and modern and low carbon utilities) to support levelling up.
Skills and Productivity
More broadly, the Skills and Productivity Board has emphasised that to fully realise the benefits of individual, firm or government investments in skills, there is a need for complementary investments in other types of capital (namely physical, intangible, financial, social and institutional) – as set out in the Levelling Up White Paper. Longer-term, for levelling up of skills to be fully effective there is a need for broader investment across health, education, social services and public transport. Obtaining such investment will require strategically coordinated lobbying of the national government by the West Midlands Combined Authority, the Chamber of Commerce and Birmingham City Council.
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI, WMREDI or the University of Birmingham.