The Chancellor visited Birmingham and the Black Country yesterday to launch the Midlands Engine Strategy. When visiting Dudley College, where he spoke to students about their future plans, Philip Hammond said that much of the focus would be on skills development:

“The days when businesses needed to worry about where they got their money and their markets from is being replaced by where they get their skills. The ambition to close the skills gaps between the Midlands and the rest of the UK is essential for the region’s growth”.

Yes, Mr Hammond, there are skills shortages in some sectors of the economy, but these are high-level specialist skills such as science and engineering, which apply to the West Midlands eg JLR, but this represents only a minority of the WM economy (manufacturing is 13% of the WM economy).  

There is NOT a shortage of skills in most sectors of the economy, there is actually an UNDER-utilisation of qualifications and skills, as the UKCES reports demonstrate and the WM economy exemplifies.  

Industry no longer trains its workforce as it once did as a matter of course

A BBC review of the UKCES) UK Employer Skills Survey 2015 of 91,000 employers identified a large proportion of employers who feel they underutilise their workers’ skills, with 4.3 million people (16% of the workforce) over-skilled or over-qualified for their current roles. The survey also provided insight into skills mismatches, identifying members of employers’ existing workforces who were not “fully proficient” in their current jobs.

In part, Hatcher thinks, responsibility lies with the employers themselves: it is “a legacy of the engineering sector being locked into a low-skills equilibrium caused by a long-term failure to educate and train its workforce” (p594). It is also a legacy of low investment: the result in part of the nationwide failure of government to ensure sufficient qualified maths and science teachers.

Much of the city’s economy is low-value production which only needs low-level skills. Just think of the spread of zero-hours contracts, Uber taxis and delivery workers.  

He ends: “What is lacking – because big business would rather invest in city centre property – is investment in high-value high-skill production. Without it more improvement in school results and more skills development just means more under-utilised skills and more under-employed graduates”.