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Skills Reform Will Boost Economic Growth

 

The North East's largest business membership organisation has called for a few simple skills reforms to provide an enormous economic boost to the region.

The North East's largest business membership organisation has called for a few simple skills reforms to provide an enormous economic boost to the region.

The North East Chamber of Commerce today launches its skills policy report "Bridging the Gap", which provides an assessment of the North East skills profile based on consultation with businesses and providers.

The report has been produced by the North East Chamber of Commerce in partnership with Gateshead College and Teesside University.

Bridging the Gap urges unity between the private and public sectors, universities, colleges and Government to ensure the region's workforce has the correct training to carve out a future in high growth industries such as renewable energy and advanced manufacturing.

NECC also warns that failing to address this need will severely impact upon the future success of the North East as a world leading hub for these industries.

NECC President, John Mowbray, said:

"A skilled workforce is the most critical contributor to the success and growth of a business. Put simply, businesses with skilled employees are likely to be more efficient, more productive and more sustainable.

"Businesses must ensure they play their part in training employees to protect their competitive edge. This report demonstrates that they need to actively engage with training providers to ensure the workforce is equipped with the skills required for success and also that educational institutions must be open to business involvement as well as it is a two-way street. This is something that is improving, but we need to do more."

The report sets out recommendations which would help strengthen the regional skills profile by focusing on the key issues identified by businesses:

  • Funding: Reforms to current funding strategy to increase flexibility of skills funding
  • Education: Education system must increase work-relevance of teaching methods to meet basic skills level required by employers
  • Collaboration: Employers and providers need to work collaboratively to meet regional skill requirements.
  • Brokerage: Effective brokerage to allow businesses to make informed decisions about available training option

NECC is now urging businesses to be more proactive in working with educational institutions to influence the curriculum as well as providing students with high quality work experience and careers guidance.

Professor Cliff Hardcastle, Teesside University Deputy Vice Chancellor (Research & Business Engagement), who helped compile Bridging the Gap, said:

"At a time of increasing uncertainty about the economy this report provides a valuable insight into the impact that skills reform can have on the economy.

"Human capital is a major contributor to the health of any business and developing that capital is critical to its success. I am confident that this report will make a valuable contribution to understanding these important issues."

Mick Brophy, managing director of business innovation and development at Gateshead College, said:

"Getting the region's current and future workforces trained in key skills required by business is vital for the recovery and growth of our economy and I welcome the announcement of this report.

"We pride ourselves on the established partnerships we have with a wide range of employers in the North East, operating in different sectors. Experience tells us that employers require training providers to be flexible and employer led.

"I'd encourage all businesses to see investment in training as a key pillar of their competitiveness."

John Mowbray added:

"By forging successful partnerships between the public, private and academic sectors, educational institutions can become more responsive to business needs for core skills and specific engagement and ensure the promotion of high quality vocational qualifications.

"In turn we feel the Government and its agencies should focus on skills rather than qualifications; provide the information and resources needed for a demand-led system to operate effectively, and better incentivise businesses to invest in training."

Compared to the national average, a greater number of the North East workforce lack the skills demanded by employers. NECC's North East Business Barometer for Quarter 2 2011 identified that 20.7% of regional business respondents had encountered difficulties when recruiting skilled manual and technical employees, with a further 19% encountering difficulties when recruiting managerial or professional employees.

North East construction company, Esh Group, was selected as a case study for Bridging the Gap due to its range of collaborative training programmes.

Brian Manning, Group Chief Executive, Esh Group, said:

"Never has it been so important that business and education communities work together in the North East in order to prepare the workforce of the future.

"If we can put the extra effort in and provide a focused business led streamlined approach to skills this will send a powerful message to Government that we can lead in the North East."

The North East's skills profile

• 24.5% of working age people in the North East have Level 4 qualifications, compared to 30% for England. 44.7% have Level 3, against 48.8% for England.
• 75.4% have achieved Level 2 by age 19 in the North East, just above the 74.9% rate for England. However, while 49.4% in England have reached Level 3 by the same age, just 44.1% in the North East have done so.
• 19.6% of employers in the North East report skills gaps in their workforce, compared to 19% in England as a whole.
• 3% of employers in the North East report hard-to-fill vacancies, and the same number report skill shortage vacancies in their organisations. This mirrors the picture nationally. 24% of vacancies in the North East are considered hard to fill and 17% skill shortage vacancies, compared to 22% and 16% respectively for the whole of England.
• 6% of employers report staff as having skills gaps in the North East, compared to 7% nationally.
• Elementary, sales and customer services, and managerial, are the occupations most affected by skills gaps in the region.
• Skills most cited as lacking in the North East are technical and practical skills, customer handling and problem solving.
• 88% of employers had designated training funding for their staff for the financial year 2011/2012. Training spending per head in the region in 2009 was £2,925, slightly below the national average of £3,050.