The North East has a track record of supporting and creating apprenticeships.
But the Independent Economic Review of the North East, led by Lord Adonis and commissioned by the North East Local Enterprise Partnership, suggests a shift in investment is needed to increase apprenticeship numbers and investment in apprenticeships by employers to achieve growth in the economy.
North East LEP links with employers for skills growth
As one of only three areas in the UK selected by the Government to pilot a localised skills system, the North East Local Enterprise Partnership will test a model that gives greater influence over public funds that are spent on skills in the region. It will place employer need at the heart of future investment decisions.
The North East LEP and the North East Leadership Board of seven councils will work jointly with the Skills Funding Agency to develop the skills model, which could operate from as early as September this year through shadow arrangements with current skills provision.
Its success, however, will depend on a strong partnership with colleges and independent training providers. Employer input will also be critical and the aim is to improve outcomes for individuals and businesses when skills have been identified as the most critical issue for growing businesses.
Andrew Hodgson, North East LEP board member who leads on skills development, said: “It’s clear that we need to think and act locally to create and strengthen a workforce with skills clearly linked to the North East economy and its key sectors.
With the LEP, North East Leadership Board, businesses, colleges, and training companies working closely together we will help to drive growth through the capabilities of highly skilled people, trained and working in the North East.”
Employer ownership of skills
Employers also play an important role in driving up skill standards, anticipating future demands for their businesses and their industries.
The Government’s Employer Ownership of Skills pilot is already demonstrating that businesses in the North East are responding positively to address skills shortages in regional industries. Nissan and Siemens are among leading regional businesses that have secured funding through the first round of the pilot, and backed this with their own investment.
Every £1m of Government funding is matched and often exceeded by employer investment. Crucially, employers bring their industry expertise, capacity and networks to support individuals and other firms in their supply chain or in key markets. Round 2 of the Employer Ownership pilot scheme has seen the budget increase to £340m. Many bids will be run as national projects, but the North East is well placed to build on Round 1 success by working with key industry players and fostering strong relationships with the employers that will lead bids.
Bids are already well developed for the second round of the pilot and the Government will be making decisions on which business proposals will receive valuable government investment over the coming weeks. The North East LEP has fostered links with some key national projects under development that will boost the number of apprenticeships.
Long-term skills strategy from North East LEP
Despite the weak economic recovery and higher unemployment in the region, forecasts demonstrate that by 2020 there will be growth in job opportunities, with a significant proportion coming from replacement demand in the region’s key industries.
Research recently undertaken by Glasgow University on the skills system in the North East identified that without co-ordinated effort, the anticipated skills shortage will pose a major threat to employers in the region.
This research will underpin the development of skills strategy for the North East by the LEP and it clearly places an emphasis on the role of employers in skills provision. It recommends that there is better engagement with employers so that they can influence local skills provision.
As Beth Farhat, Northern TUC regional secretary said: “Britain urgently needs a long-term industrial strategy for growth and a social partnership of employers and unions, working together to boost skills investment, is the best guarantee of success.”