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COMMENT: Government strategy hopelessly off-target for West Midlands

By Simon Penfold | Opinions | Published:

The apprenticeship levy and wider Industrial Strategy hasn’t been the white knight politicians hoped, and applicant numbers have collapsed.

Apprenticeship numbers have collapsed over the past year

We have had a week now to fully digest the proposals laid out in the Government's flagship Industrial Strategy. And pretty thin gruel it has turned out to be.

Ignoring Labour's response, which largely seems to be made up of throwing state money at the problem and putting unions on the board, the grand plan is slim on detail and often seems to miss the point.

To be fair, it is a White Paper, which means this is the Government setting out its proposals for the future. But a bit of serious detail would have been nice.

And what detail there is seems hopelessly off target.

Launching the Industrial Strategy, Business Secretary Greg Clark said: "The Midlands is vital to the UK economy and this strategy, through investment in infrastructure, skills, 5G connectivity and clean growth technologies, we will build an economy fit for the future.”

In terms of infrastructure, there is the £250 million for the West Midlands Combined Authority as part of the new £1.7 billion Transforming Cities Fund "driving productivity through improving connectivity".

That money will go towards expanding the Metro tram system to Brierley Hill and Wednesbury. All well and good, but in terms of practical assistance to improve business productivity, it scores a big fat zero.

Business Secretary Greg Clark has championed the Industrial Strategy

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What companies need is major improvements to the local road and rail system so that the raw materials they need and the goods they are trying to get to market aren't stuck in gridlocked traffic in Brierley Hill, Wednesbury or Walsall.

And as for investing in skills, there is the promise of greater investment in Further Education through T Levels. The 'T' is for technical, and much welcomed.

But there was nothing to address the elephant in the room, which is the staggeringly poor delivery of training places since the launch of the new apprenticeship levy.

The latest set of figures showed that, once the levy kicked in, the number of apprenticeship starts collapsed, falling 61 per cent from 113,000 last year to 43,600 in May and June. No-one seriously expects the next set of figures to be any better.

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The levy scheme isn't a bad one and can be made to work for companies benefit, but it's been poorly explained and most firms just see it as another tax.

Responding to the dramatic falls, a Department for Education spokesperson said in October: “Our apprenticeship reforms have put control back into the hands of employers so they will gain the skilled workforce they need to compete globally.

“We know that the last year has been a period of huge change for employers but it is right that they are taking their time to plan ahead and maximise the opportunities the apprenticeship levy can bring.”

Which sounds like a Government department ignoring all the feedback from the business sector and ploughing on regardless.

Apprenticeships are absolutely vital. There is a 20-year recruitment gap in most industries and anything that slows down attempts to tempt young people into manufacturing, construction or any other technical career isn't just a bad thing; it's potentially disastrous. Especially if we start losing more EU workers due to Brexit.

This must be hugely frustrating for West Midlands Metro Mayor Andy Street. While he has scored significant successes for the region in terms of rail and road, there has been no sign of progress in terms of his scheme to retain apprentice levy cash raised in the West Midlands but unused for training. He wants the money raised here to stay here so it can be used for other skills improving purposes, rather than dropped into the Treasury's bottomless sump of cash in Whitehall.

It's a good idea and gets to the heart of the West Midlands critical skills shortage. Support in the Industrial Strategy would have been evidence of a practical effort to help companies. It's non-appearance speaks volumes.

At least the Budget promised £5 million for a construction skills training scheme. It can't come soon enough for local building firms.

Possibly the best hope comes from proposals for developing local industrial strategies, tailored to the needs of particular areas, but that won't be until 2019. Quite why it takes two years is another matter entirely. If the Government bothered to listen to businesses or organisations like the Black Country Chamber of Commerce - currently in the middle of its own Manufacturing campaign – it could put together a list of practical moves to help West Midlands industry in about a fortnight.

Instead of pumping more money into universities and cherry-picking sexy new industries like autonomous vehicles and artificial intelligence – which are already attracting enough private sector money – it might have been more use to sort out apprenticeships, boost the R&D tax credit scheme by more than just one per cent and help firms improve their skills and technology so they can improve productivity.

A sound, practical, hard-headed Industrial Strategy is an absolute necessity for the West Midlands and the country as a whole. It'll be nice when we get one.

Simon Penfold

By Simon Penfold
Business Editor - @SPenfold_star

Business Editor based at the Express & Star's head office in Wolverhampton, looking for stories big & small.

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