The North once again compared fairly unfavourably to the south in yesterday’s unemployment figures. It’s safe to assume it will do so again in next month’s figures, and the month after that. While political commentators note the UK’s slide towards a triple dip, most people outside London don’t need clinical economic definitions to tell them that money is tight.
But let’s be clear, this disparity is not a consequence of idleness, nor has it happened by chance. Public policy and investment decisions have made it all but inevitable. London has vast infrastructure spending exemplified by Crossrail, a Government proactively championing the city’s financial services and a local leader with a voice which cannot be drowned out. The majority of the country is not so fortunate. This is not to have a pop at London but to recognise the origins of its success and argue that they be replicated across the country. Nick Clegg in his Mansion House speech on Monday was right to note that the world’s most successful economies are driven not just by their capitals, but by multiple thriving centres. As one newspaper bluntly put it, cities in the North “have been left to wither by London bias”.
While inequitable infrastructure spending and lack of political voice have got plenty of attention, the largest issue holding back regions like the North is inadequate skills policy. Most people have local roots which mean they want to stay in their local labour market. Local commitments and responsibilities render jobs 300 miles away largely irrelevant. Equally – with the exception of graduates, senior managers and certain specialists – employers tend to look locally for new employees. Skill level disparities between different parts of the UK have widened over the past decade.
Our new report, published today, builds on our Northern Economic Futures Commission, and highlights how successful local skills strategies can help transform areas. Such strategies each have the same core elements: they take a long-term view; they aim to provide a bridge between employers and learners; they involve a broad range of stakeholders in the decision-making and organisational processes; they are backed by good intelligence and high levels of collaboration; and they form just one component in a wide range of economic development initiatives, albeit a very important component.
City regions are a sensible scale at which to engage with businesses in order to develop local networks of training providers, employers and employee representatives, particularly in key growth industries. A proactive local skills strategy can also help connect the disadvantaged with employment opportunities and encourage employers to better value skills training. Lifelong learning and work progression in turn have a key role to play in increasing social mobility and reducing in-work poverty. The report in addition argues for a push to double the number of young people in advanced (level 3) apprenticeships by 2015 and for devolution of a significant proportion of welfare-to-work funding to local authorities and their partners in city-regions.
The net migration of graduates towards London and the lack of economic investment in the North mutually reinforce one another. Two-speed austerity just exacerbates this, with unequal innovation spending and the new homes bonus transferring capital to the south, and public sector cuts and reductions in local authority budgets disproportionately haemorrhaging the north. How can the northern economy be expected to thrive with so much money being sucked out of it?
The budget is a month away. It will contain no Crossrail for the North, and may not even contain an enhanced version of the distributional analysis of how the budget will affect different localities). Announcing the intention to urgently implement the skills recommendations in the Heseltine Review and our report however would be a good start. Nick Clegg’s speech struck the right tone, but words from Westminster ring hollow outside the M25. Actions would speak much louder.
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* Graeme Henderson is a Research Fellow at IPPR North