Devolution is best opportunity yet to tackle North East skills problem, says CBI chief

CBI chief John Cridland thinks increased decision making in the region could be improve productivity and reduce inequality

Simon Viet-Wilson John Cridland addressed an audience of business people at Northumbria University
John Cridland addressed an audience of business people at Northumbria University

A devolution settlement for the North East would provide an opportunity to better tackle the region’s skills challenges, Britain’s key business spokesman says.

CBI chief John Cridland spoke at Northumbria University dinner this week and said the region’s “world class” businesses were not matched by effective social policy — particularly in education.

In a trip to the North East late last year the business champion, who is soon to step down from his role as CBI director general, said urgent action was needed to raise regional living standards and close inequality with the South.

Speaking to The Journal ahead of his address, Mr Cridland said increased devolution of decision making power would help the regional to tackle the nuances of its own skills needs and ultimately improve productivity so that growth could be felt by everyone.

On inequality, Mr Cridland said: “It is still a major challenge. In some respects the North East is coming a bit from behind, but I think that’s mainly in the area of social policy and education.

“If you look at levels of qualifications up here, they are a little bit behind. It’s certainly not behind in the area of economic policy. The businesses here are absolutely world class and the challenge, as we move forward with more regional devolution, is to combine these two elements more effectively.

“With devolution we have an opportunity to leverage closer working between business, local authorities and universities and schools, through these devolution settlements.

“If we do this we can help to raise productivity levels in the North East be progressing skills. The resulting strength of the North East economy would mean meaningful growth for everyone. Like last time I was in the region, I think inequality is still an issue, but although it’s an issue there is a better opportunity than ever to address it through devolution.”

Mr Cridland was in Newcastle to draw attention to the CBI’s Tomorrow’s World report, which looks at strategies for getting more young people to study the science, technology, engineering and mathematics (STEM) subjects desired by some parts of industry.

The report includes proposals to get teachers into businesses to experience STEM in practice and a new Ofsted inspection framework to reward schools that get students engaged with STEM.

He drew a line between the current low productivity rate and the upskilling process which could counter the trend.

He added: “We need to be clear why we have a productivity problem. There is a structural problem and a problem of the moment. A lot of the structural problem comes back to weaknesses in our education system.

“I don’t think young people fail in education, I think the system fails young people. Those who are not in education, employment or training — the so called ‘NEETs’ — are people who have fallen between the cracks, and we really need to help them.

“In recent years we’ve actually done remarkably well in building up the amount of jobs here in the North East. More jobs often lowers productivity, as young people start in relatively low-skilled, low production roles, which pulls down the overall figures.”

Asked whether regional devolution could detract from overall economic growth, Mr Cridland was sanguine.

He explained: “I’m a big fan of the United, economic, Kingdom — that’s my business. There are certain things needed to glue us together. You need a single set of rules about banking, energy and labour markets. You need a single set of business taxation and you need excellent road, rail, air and digital infrastructure.

“There are other issues that are much more regionalised; issues like skills and local infrastructure. Once you get to the North East on the A1, the decisions about the A1 in the North East should be made here. As long as we understand the issues on which we’re a United, economic, Kingdom, we can then begin to focus on the things on which the people of the North East should decide for themselves.”

Northumbria University vice chancellor Andrew Wathey said the mission of the 21st-century university was a “triple helix of research, teaching and enterprise”.

Mr Wathey said: “The work between business and universities is one of the UK’s greatest success stories. Currently 34% of businesses work with universities, whereas the corresponding percentage in Australia is 3%. That gives you a sense of what we’ve achieved in this country.

“We continually work with employers and the business community to understand and respond to their needs.”

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer