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It is a point trailed many times before that a highly skilled population is a prerequisite for economic growth. Whilst not a unique point, it is an important one – particularly at a time when the UK is craving a good news growth story amidst a continuing challenging economic picture.

Critical to local economic growth is the capability of an area’s working population. With skilled workers high in demand, competition is fierce. In the period from March to May 2023, vacancy numbers in the UK sat at just over one  million, and it was the 11th consecutive period of fall after several years of post-pandemic impact.

Skills and labour shortages have exacerbated this problem. The Federation of Small Businesses found last year that 80% of small firms faced difficulty recruiting applicants with suitable skills in the previous 12 months, and COVID-19 also caused high levels of economic inactivity – something HM  Treasury continues to grapple with today.

It can be tempting to keep the debate on skills in a more cynical place, focusing on the negatives as to why this is such a problem for us here in the UK. Of course, we need to understand and diagnose the problems, which include an historic focus on academic rather than technical and vocational routes, the impacts of Brexit and the COVID-19 pandemic and a rapidly changing world that is fast creating the need for new skill sets.

However, with challenge also comes opportunity. Our net zero ambitions are already creating a whole host of new future skills needs, and the pandemic has introduced new ways of working and operating for many businesses which did not seem possible three years ago.

As places look to build their plans to drive economic growth, skills should be at the heart of any strategy. A good way for local areas to do this is by identifying the key growth sectors from which a compelling skills offer can be constructed, not to mention the obvious opportunity to create exciting propositions for potential inward investors too. From agritech in North Yorkshire to the creative industries in Coventry, every local place has its own story to tell.

Local areas know their skills needs better than anyone. Whilst national initiatives to boost skills have their place, closer collaboration between local partners could yield transformative results. With local authorities acting as a natural convener, businesses can report their skills-related needs, shortages and surpluses, with nearby further and higher education institutions then responding accordingly. This happens well in some parts of the country and less well in others.

A greater use of local skills not only benefits businesses, but it also allows local places to move away from ‘brain drain,’ where people skill up locally and then leave, even though many would love the opportunity to live and work in their hometowns.

Local places do not need to embark on this journey alone. There is considerable enthusiasm within the private sector to join forces with partners to regenerate and grow local areas, and getting the skills piece right will be a fundamental part of that.

Henham Strategy was recently commissioned by the North Essex Economic Board, consisting of six North Essex district authorities and the Essex County Council, to write a refreshed Economic Strategy and Delivery Plan. As part of that project, we worked with CB Heating, an air source heat pump installer based in Clacton-on-Sea, who have a successful partnership with EDF to roll out more products across the country and establish a Heat Pump Installers Network Academy, which has the capacity to train up to 4,000 new installers. For both parties, the collaboration is a win-win, and North Essex now benefits from a strong skills pipeline for its renewable energy regeneration growth sector.

The policy debate around skills does not need to be a bleak one. Closer and more open collaboration between key partners at a local level has the potential to paint a very different, and more optimistic, picture and one that sets out an exciting vision of the future for us all.

Kate Fairhurst is a Director at Henham Strategy and previously Head of Office at the London Assembly  

This article was published in the latest edition of Centre Write. Views expressed in this article are those of the author, and not necessarily those of Bright Blue. 

Read more from our August 2023 Centre Write magazine, ‘Back to business?’ here.