Skills drive can bridge productivity gap

In a column for the Yorkshire Post, Roger Marsh OBE, chair of the LEP, argues getting the skills system right is one of the most important and powerful things we can do to improve productivity across the City Region, and help people into better, more fulfilling jobs.

12 August 2019

The Leeds City Region Enterprise Partnership is creating a Local Industrial Strategy to help improve productivity, boost businesses and protect the environment across the City Region, so everyone can feel the benefits of a strong economy.

All local enterprise partnerships in England have been asked to produce a local industrial strategy setting out how they will boost productivity and respond to the four ‘grand challenges’ identified by the Government. These are: the effects of data and AI; adapting to the needs of an ageing society; clean growth; and the future of mobility through zero emission and autonomous vehicles.

I believe our region is well-placed to meet these challenges. As the recent Yorkshire Day celebrations showed, there’s a lot to be proud of in Leeds City Region and a lot that we can build on to make the most of region’s enormous potential.

We’re a £70 billion regional economy, making us the largest contributor to UK GDP in the Northern Powerhouse and the largest regional economy outside London. We’re also one of the most diverse regions in the UK, with a rich cultural heritage that combines unspoilt rural landscapes with contemporary urban developments, making it one of the country’s best places to live, study and work.

Closing the productivity gap

But our productivity lags behind the rest of the UK – and the gap is widening. In 2008, the City Region’s output per hour was 90% of the UK average but by 2017 this had fallen to 87%, resulting in stalling living standards and fewer opportunities for people to get on in life.

Closing that gap could add a potential £11 billion extra to the economy. But improving productivity is about more than just a number - we will be able to create better-paid jobs and be able to offer people a better quality of life. Meeting this challenge will be tough, but it’s one we’re prepared to meet head-on, and skills have to be a central part of that.

As a region, we face a ‘skills double whammy’. We have shortages in some areas – particularly in digital, engineering and management skills and across skilled trades – and at the same time, too many of us are in low-paid, low-skilled employment.

This means some of our most dynamic sectors such as digital and healthcare technology risk being held back. Equally, a quarter of jobs across the City Region still pay less than the Real Living Wage of £9 per hour and employers continue to under-invest in training and development.

A national leader 

Despite this, we have an enviable record on job growth and one of the most diverse regional economies. The City Region is the UK’s leading centre for financial, professional and legal sector jobs outside London and we have the highest number of manufacturing jobs in the UK, with niche specialisms in textiles, food and drink and areas of advanced manufacturing.

We also have a growing strength in broadcasting and production, with Yorkshire landmarks an increasingly common sight on our screens. And with Channel 4 coming to the region we’re seeing a ‘halo effect’ with major producers setting up or scaling up here.

Around 40,000 people graduate from our region’s universities each year and we need to make sure our young people have the right skills and opportunities, so they won’t have to go over the Pennines or down to London to start or develop their careers.

That said, we also need to make sure opportunities are available to all. We have to make sure that young people in places like Bradford – which has one of the youngest populations of any UK city, but where a quarter of working age people are educated to just GCSE level – have the chance to develop higher skills and access to the better jobs that go with them.

Getting the skills system right for the future 

Getting the skills system right is one of the most important and powerful things we can do to improve productivity across the City Region, and help people into better, more fulfilling jobs.

To help address these issues and build on our successes, we have created the Future-Ready Skills Commission. It will examine how the UK skills system can be shaped to meet the needs of different regions whilst addressing the challenges and opportunities of the digital revolution in the workplace.

The Local Industrial Strategy is still in its early stages. We’re working with stakeholders and partners to make sure that our evidence and priorities reflect real life experience, and we’re working closely with the neighbouring York, North Yorkshire and East Riding Enterprise Partnership to maximise opportunities across the whole of North and West Yorkshire.

But we need as many different views as possible to help influence the findings and priorities of the local industrial strategy, which is why we're asking people to have their say by completing our survey.