Press Story

Widening higher skills gap between North and English average is a major threat to national productivity growth

Colleges and FE providers in crisis as government funding halved between 2010/11 and 2020/21

UK employers spending half the EU average on training their staff

Government industrial strategy must place bigger focus on skills

Local leaders need more control with new ‘Skills for the North’ body established

The higher level skills gap between Northerners and the rest of England has widened since 2011 and the North is now 5 percentage points behind the English average. This represents a major concern for national productivity, says a new report by the leading think-tank for the North of England [1].

Meanwhile, adult skills funding has been badly hit by austerity. If current trends continue, Government funding for adult skills will be cut by half between 2010/11 and 2020/21, creating a serious challenge for many FE colleges and providers. Already total spending on teaching and learning fell by 32 per cent in cash terms between 2010/11 and 2015/16.

The growing skills crisis is compounded by the fact that employer expenditure on training has declined by 13.6 per cent since 2007 and the per head figure is around half of the EU average.

But the North of England is being hit hardest as research [2] shows big regional disparities caused by the apprenticeship levy which will stimulate the most training in London and the South East.

And the UK has fewer adults with a high-level Vocational Educational Training (VET) qualifications than other similar nations.

In 2018, as the Northern Powerhouse turns its attention to education and skills [3], today’s report serves as a timely reminder that skills are crucial to productivity, and to the prosperity of communities, businesses and individuals.

The report calls on Government to devolve more powers and budgets for skills to local business leaders in Local Enterprise Partnerships (LEPs) as part of the new industrial strategy. In turn, LEPs must play a greater role in supporting businesses to use their apprenticeship levy budgets and publish local ‘priority lists’ where there are specific skills needs.

The report also calls on Northern leaders to create a new body – Skills for the North – to co-ordinate efforts to address these growing concerns and put pressure on government to reverse funding cuts.

Senior Research Fellow at IPPR North, Anna Round, said:

“We welcome the new approach to technical education in the Skills Plan. But a centralised adult education system isn’t working and the time has come for a more devolved approach to stop the North falling further behind.

“The Industrial Strategy contains a commitment to boosting skills, as well as to a place and sector based approach but it’s time for Government to turn commitments into actions.

“Many LEPs have a strong track record of making a difference using limited powers. But local leaders in the North need more autonomy to co-ordinate and shape the skills system – and proper resources to do it.”

ENDS

Contact

Rosie Corrigan, Media and Campaigns Manager for IPPR North, on 07585772633 or r.corrigan@ippr.org.

Notes

IPPR North is the leading think-tank for the north of England, developing bold ideas for a stronger economy and great public services to really take back control in the North. For more information, visit ippr.org/north.

[1] Copies of the report, Skills for the North recommends that:

Further powers and budgets for skills should be devolved to LEPs including a role in supporting businesses to use their Apprenticeship Levy budgets.

To support skills devolution, LEPs need better opportunities to analyse data and labour market information and better resources to manage devolved systems.

LEPs should use this support to develop and publish regional Skills Priority Lists.

LEPs should continue to commission the Adult Education Budget using Outcome Agreements.

Sector Deals developed as part of the Industrial Strategy should include a skills investment element.

Business support provided by LEPs should include a focus on skills utilisation.

Skills devolution should be integrated with other devolved powers to improve place-based approaches to social and economic development,

Partnerships and networks should pay a key role in developing and implementing skills devolution.

A ‘Skills for the North’ body should be established.

[2] IPPR’s earlier report, Skills 2030, is available to download here. It finds a regional disparities caused by the apprenticeship levy, which will stimulate the most training in London and the South East. London and the South East also have among the highest qualified populations in the country, with 50 and 40 per cent respectively of their populations educated to level 4 and beyond, compared with 30 per cent for example in the North East and Yorkshire and the Humber.

[3] Education and skills are set to be high on the Northern Powerhouse agenda in 2018. Business North has launched a call for evidence on education and skills for business, whilst George Osborne’s Northern Powerhouse Partnership will hold a conference on Education and Skills in February.