Skills

      Tackling the Skills Crisis

   in the West Midlands Region

Skills are critical for business growth. Without a proper skills base in the West Midlands the future for business – and therefore for future prosperity – is bleak.

This paper praises the Government investment in skills provision but adds that the skills crisis is still prevalent across the region – and the continued focus of resources away from higher level skills is aggravating the crisis.

Business Trends

An analysis of the skills needs of the West Midlands region has to take into consideration the current and future trends in all business trends in the West Midlands region.

Despite the recent negative news for manufacturing in the West Midlands, this sector is the highest earner, by GVA, in the region. 25% of total regional GVA relates to the manufacturing sector. In terms of employment, nearly 20% of the workforce is involved in manufacturing (1).

Current trends predict a continued strong presence for manufacturing alongside growth in professional services, ICT and tourism.

Despite the current – and future reliance – of the West Midlands regional economy being reliant on high knowledge based business sectors – the reality is that the region is faces, today, a skills crisis.

Skills Crisis

1.1  million adults – 35% of the working age population in the West Midlands region – experience problems reading and writing.

18.7% of people in the region have no qualifications – that is a higher rate than the national average – with the rate being 15.1% for England and Wales.

While business trends demonstrate the need for higher level skills, the West Midlands region is a net exporter of graduates. A significant increase in the demand for people qualified to NVQ 4 and 5 of over 50,000 is projected over the next five years.

Despite this demand, the response is inadequate. Though there has been an increase in the proportion of working age population with NVQ4 or more qualifications from 19.2% to 21.1% over the period 1999-2003, this figures lags behind the respective figure for England and Wales – 24.9%.

With businesses needed people with basic and higher level skills, this is having an impact on companies trying to recruit skilled workers. The latest survey is that there are 17,000 job vacancies in the region that is directly related to the skills crisis (2).

Response to the Skills Crisis

The Government is to be congratulated on establishing the Regional Skills Partnership which is now developing solutions to tackle these problems.

The Business Voice WM also welcomes the Government’s intentions, as outlined in the Skills White Paper, to give Regional Skills Partnership Boards more flexibility in their response to skills difficulties. The increase in funding for basic skills is also to be welcomed.

Nonetheless, as recent national Learning and Skills Council guidance has shown, there is an emphasis on NVQ Levels 1 and 2 courses – and less of an emphasis for funding courses for NVQ 3 and above.

There is a clear need, in responding to the current and emerging business trends in the regional economy, to fund courses, which enables people to practically use their knowledge at work.

Without a focus on higher level workplace skills, rewarding job opportunities will be missed by many – at the expense of growing businesses.

With the expected reduction in the future number of working age people, the need to ensure up-skilling now will be critical for the future prosperity for every person in the West Midlands region.

That is why we would encourage the Government to look again at the funding for skills provision - otherwise the negative consequences for future growth and prosperity across the West Midlands region could be profound.

If you wish to know more about the Business Voice WM’s position on skills – or other business issues – or you wish to work with the Business Voice WM, please contact:

James Watkins – Executive Director

West Midlands Business Council

Albert House

Quay Place

92/93 Edward Street

Birmingham

B1 2RA

T: 0121 245 0140

F: 0121 245 0141

E: info@businessvoicewm.org.uk

W: www.wmbusinesscoucil.org.uk

Notes:

(1)   Unless otherwise stated, all statistics relate to the West Midlands Regional Skills Partnership Skills Baseline, West Midlands Regional Observatory – Spring 2005

(2)    National Employers Skills Survey – 2003