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The Skills Bill and Levelling Up
Author Hilary Salt for First Actuarial LLP Posted on July 28, 2021 11:08
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The Government’s Skills Bill is aimed at supporting its levelling up agenda by finding ways back to having skilled employees in long term, secure and well-paid employment in their local areas.

That all sounds great and I do welcome the move away from the target of 50% of school leavers going to university and the recalibration of the way we value different roles now we know who the essential workers are. But I think we need a wider and more honest debate on how to use the skills debate to set our priorities. It doesn’t help to start as Richi Sunak does with the assumption that pre pandemic, the UK economy was “fundamentally sound”. So what are the factors that should inform this discussion?

First, the real problem for the economy and job creation is stagnant productivity. ONS figures on productivity are all over the place at the moment but we can see that productivity gains have been stubbornly low since the 1980s leaving the UK with the lowest productivity of the G7 countries. As Andy Haldane put it this is “a long tail problem” as we have a big legacy of “just about managing” businesses – generally with high debt, outdated processes and a lot of employees doing what David Greaber termed “bullshit jobs”. We need to clear these zombie companies out – whilst providing support and direction for those who then lose their employment. Then we need to invest in new industries. As we all know in pensions, the problem here isn’t a lack of capital – we all know that pension schemes are desperate to find investments that will produce an inflation plus investment return. With capital so easily available why aren’t we investing in new businesses? I think this is part of the problem of they way we view risk – hurdle rates for new projects remain stubbornly high despite rock bottom interest rates reflecting a negative view of the future and an willingness to make decisions that might be criticized. We won’t get good, secure employment for people without tackling this problem whatever the level of skills people have.

Second, Government needs to recognise its wider role. Mazzucato has argued convincingly about the importance of the State as the investor of first resort in each wave of technological progress. We need national and local governments to lead a partnership with the private sector and the educational institutions (universities and training providers) to forge innovations in research and production. The Skills Bill puts employers at the heart of the new training agenda but are existing employers best placed to lead this? Isn’t there a danger that the agenda will be set by today’s zombie companies rather than by today’s start ups and the companies of tomorrow?

And third, I’m a bit nervous that the levelling up agenda turns very parochial. So it argues that we need to create new employment opportunities in say Blackburn. I’m not against that but why at the same time doesn’t a big hotel chain sponsor an academy in Blackburn to turn out multilingual students who can staff their hotels in the summer holiday and maybe make a long-term career with them? Or perhaps work as the head of export in that factory in Blackburn? And levelling up should include levelling up within communities. Care work would be a great area to introduce sectoral pay and training bargaining. So if you want to provide care services you commit to paying an agreed national rate of pay and the training providers develop an agreed national training programme that is also a foundation for a nursing career. That means we have to address the problem of how we pay for social care. But a care sector with better pay, better training and a national purpose is more likely to be something we all see the value of.

The Skills Bill opens up the chance to debate how we create a better future for work so let’s make the most of that opportunity.