Cllr Imran Khan, Bradford Council and Portfolio Holder for Skills, Key Cities examines the UK’s productivity puzzle, and asks what can we learn from the UK’s mid-sized cities?
Productivity growth in the UK has remained largely stagnant for the past ten years and is now 26% behind the United States and 15% behind the G7 countries’ average.
A recent OECD Report also placed the UK far behind our closest competitor nations in terms of the proportion of adults categorised as low performers in numeracy or literacy, ranking 18th out of the 29 OECD countries. While a variety of factors have contributed to lower productivity rates, the UK’s skills gap stands out as a significant barrier to increasing productivity levels.
Automation and globalisation are transforming the demand for skills in the workplace. A recent report by Universities UK, “Solving future skills challenges” highlights this, stating that by 2030, it is estimated there will be a talent deficit of between 600,000 to 1.2 million workers across the UK’s financial, business, technology, media and telecommunications sectors – a staggering figure which simply must not be ignored. Skills shortages are restricting firms from expanding domestically and, in turn, denying job opportunities to local people. At a national level, these shortages are a serious impediment to economic growth and a strong national economy.
Key Cities: Important lessons from the UK’s medium-sized cities
During the summer of 2013, the Key Cities Group was formed, a cross-party initiative comprised of middletiered cities from all corners of the UK.
Our ambition is to build resilient and high-value city economies, and residents who are in employment and see a future in their cities. With a combined Gross Value Added (GVA) of £149 billion and population of over 7.2 million Britons, we collectively have a unique perspective on ways to meet these challenges right across the UK at a local level.
To achieve our ambition, we must work in partnership – with government, employers and the range of local stakeholders. We are committed to joint working but also dedicated to providing local leadership.
As an example, Key Cities members Derby, Portsmouth and Southampton have all achieved productivity and export levels that are ahead of the national average; while Bradford offers the highest productivity per worker (£49,000) of any city in the Northern Powerhouse.
Whilst the economic profile for each city differs within the group, the need for skills and human capital to meet the demands of businesses is a challenge that unites us all. Both now and in the future, domestic firms, potential investors and emerging technologies will continue to require access to the highest levels of talent to ensure that the UK remains a competitive location for business.
An important first step in addressing these challenges is the principle of devolution of freedoms, powers and resources for Key Cities to deliver real change and improvement. As a group, Key Cities has a wealth of experience and the ability to draw unique insights from a range of sectors and demographics to drive integration, increase performance, realise efficiencies and deliver services that meet the needs of local people and employers.
It is also paramount to reap the rewards from Key Cities’ unique strengths – scale and greater agility, which enable the group to focus on very specific areas of competitive advantage and work with the government to provide the required levels of investment and lead local policy and interventions to address the skills gap and improve productivity growth.
Business services: a template for success
Employing more than three million people across the UK, the business services sector plays a crucial role in ensuring Britain’s workforce is equipped with the relevant skills and training programmes to help develop careers and, ultimately, deliver economic growth that is truly inclusive and benefits local economies.
Earlier in 2018, Key Cities announced a partnership with the Business Services Association (BSA) to deliver a range of initiatives to promote future skills development.
As part of this, Key Cities and the BSA held three regional workshop sessions in Bradford, Coventry and Southampton with a particular focus on skills development. These sessions have been incredibly effective and illustrate just one way in which Key Cities is helping to shape a skills system that works for the local communities, cities and industry.
Digital technologies are also another area of focus for Key Cities. Bradford has a thriving and innovative digital sector with 700 companies employing 4,500 people, digital skills are one of three priorities for the Leeds City Region Employment, and Skills Plan, This sector offers significant untapped growth potential, which, if used effectively, can rapidly improve productivity levels and develop new partnerships between firms across different sectors and regions.
Ready to solve the productivity puzzle
Working closely with stakeholders to develop local policy and practices that truly address the skills gap would not only make a huge difference to UK productivity but the overall economic health of the nation, too.
Key Cities are ready, willing and able to solve the UK’s productivity puzzle. We can only do this in partnership with government, employers and a range of local partners. However, these efforts will be more powerful and effective if Key Cities had the necessary devolved freedoms, powers, and resources to ensure that Britain’s cities are able to meet the skills requirements of its businesses.
Cllr Imran Khan
Bradford Council and Portfolio Holder for Skills