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'Councils must understand the skills that businesses want'

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In a recent discussion on business and inward investment in Manchester, I was asked about how we aim to understand and meet business needs in the council’s inward investment strategy.

I was reflecting on a recent example of a great investment decision, in my view, by a then Manchester-based firm to relocate into one of our business parks in Oldham. I’ll call them company X.

It is a large advanced manufacturing company, moving to a new 40,000 square foot facility with a turnover of over £10m a year, entirely on top of all the issues it faced in relation to planning, premises, finance, grants and their post-Brexit export strategy.

All the above typically feature in inward investment strategies aiming to simplify byzantine processes supporting access to finance, navigation of statutory planning processes, and property matters. But what we found with company X, typical of over 90% of the firms we deal with, is that skills and local labour market confidence is its top concern – the factor that often sways its board in making new investment decisions.

Reform of the skills system remains among the top public policy challenges of our age, alongside health and social care.

Those of us analysing and working with the skills system as part of local and regional regeneration strategy still face a fractured, part-reformed, and politically toyed with system, clearly capable of wonderful things, but frequently hampered by indecision or a fragmented approach to reform.

The current challenges are well documented. The vaunted ‘parity of esteem’ between a truly high quality and accessible technical education system and academic routes remains an aspiration. The new T levels aimed at certifying technical skills at A level standard are still only part delivered, and it will likely take many years of hard effort to sustain employer engagement before parental perceptions can be truly re-geared.

In relation to skills for young people, critical voices are becoming louder around the apprenticeship levy on employers and the target for 3 million more apprenticeship starts in England by 2020. With falling starts the 3 million goal is looking increasingly unachievable, and the levy itself therefore underspent.

And on adults and lifelong learning, despite some good practice in localities, a strong national strategy for in-work progression for working age adults remains something of a chimera – economically essential, but still a rarity to find close to the top of the government’s in-tray.

The new national retraining scheme offers some hope, but still lacks a national strategy for lifelong learning to back it.

Local government continues to innovate in partnership with business and providers, despite the challenges this system presents. Examples abound of good practice in college improvement, and proper co-ordination of local skills strategies with T level preparations and curriculum reform.

We continue to press the case for devolution – not as a panacea for the system but, as the Association of Colleges has recently argued, to advance sensible solutions such as the top-slicing of the levy to enable its strategic use in delivering regional skills strategies, and to bring forward reform of the adult loans system.

In-work progression policies continue to evolve. Our own Career Advancement Service in Oldham, increasingly an essential component of our business support strategy, has now seen over 300 clients in its first pilot period, leveraging new adult skills funding.

It showed the pressing demand for all-ages labour market strategies to support sustainable improvement in skills acquisition. In response it aims to feed the labour market needs of companies requiring a qualified, experienced adult workforce.

In areas across the North of England where the local skills profile often raises scepticism from prospective businesses and investors, it is essential we have a joined-up approach to face these challenges.

Company X was convinced about Oldham not just because we could supply apprentices, but because we could answer the in-work progression question about the adult workforce, backed by strong partnerships with local skills providers.

But companies, as much as local authorities, yearn for coherence from a skills system suffering from the after-effects of piecemeal reform over too many years. Amid Brexit and other investment risks, we will have to work harder still to bring that coherence that businesses and our local populations need.

Tom Stannard, director of economy and skills, Oldham MBC

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