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Why we’re keeping the spotlight on skills and productivity

by Graham Hasting-Evans, NOCN Group managing director

The unrelenting public, political and media focus on Brexit is stifling discussion on major problems we would be foolish to neglect.

This is why we are restarting the conversation about UK productivity with a major new report, Skills to Drive a Productive Society, written and researched in partnership with the Learning & Work Institute. In it, we outline an inclusive National Skills Strategy that will boost productivity, improve literacy and numeracy and drive greater social mobility.

And this help is needed. Urgently:-

  • the productivity gap with other comparable nations is around 30%
  • the UK has trailed fellow G7 countries for years and, in 2016, output per hour worked here was 15.1% below the average for the rest of the economies
  • indeed, it now takes British workers five days to produce what their German or French counterparts manage in four
  • the UK economy, unlike those of other countries, has not recovered from the financial crisis. Instead, it has virtually flat-lined.
  • if the ramping improvements we were enjoying pre-crisis had continued, UK PLC would be 25% more productive now than it is.

Huge productivity gaps exist in vital sectors, among them retail; logistics and distribution; IT/AI; financial services; construction; manufacturing; mining; and utilities. They blight the East of England, East Midlands, North East, North West, South West, Yorkshire & Humber and Wales.

Meanwhile, poor literacy and numeracy threaten the country’s ability to seize the opportunities presented by the accelerating tech and digital transformation. They also impact individuals’ abilities to cope with the changes to millions of jobs and the wider employment landscape.

All this just as most developed nations are raising literacy and numeracy levels - with industrial titans, China and India, churning out hundreds of thousands of STEM graduates every year.

All this would be bad enough at any time, but we are currently also marching towards the colossal uncertainties that Brexit will bring. It means we simply must up our game and increase productivity rates dramatically or find ourselves on an even wobblier trap door, where the risks of failure are multiplied and their consequences ruinous.

If productivity remains low, or declines still further, it will hit living standards, social mobility and the funding of the public services that hallmark a decent, stable society – making it an issue for the whole of society.

Skills to Drive a Productive Society was launched at a joint NOCN/New Statesman event at the Labour Party Conference, 24th September.
In line with NOCN’s philosophy throughout the charity’s 30 years of creating employment opportunities, we detail how skills linked to investment is the key to improving productivity, whilst also addressing the challenges of AI and social mobility.

The better equipped the national labour pool is with relevant, right-up-to-date, properly validated, internationally recognised skills across key sectors, the more productive workers will be, the more productive their employers will be and the more productive the nation will be – and so better able to compete in global markets.

Our report sets out some 23 recommendations for significant change, among them:

  • an integrated National Skills Strategy supporting everyone, including the self-employed, unemployed and atypical workers
  • accelerated apprenticeship and technical education, making them relevant to AI and powered by sufficient investment in literacy, numeracy, cognitive, digital and employability skills to match the practical needs of employers
  • improved skills for managers who design and implement productivity
  • reviewing the Apprenticeship Levy’s operation to ensure more short-term flexibility
  • continued transition to online learning and assessment
  • positive action on social mobility and FREDIE
  • one nationwide organisation to drive implementation of the National Skills Strategy, working with key sector players and local accountable bodies, such as the Combined Authorities.

Ensuring the UK is fit for purpose for 2025 with re-designed apprenticeships and technical qualifications is not optional. If the country produces people at that time with skills that were needed in 1995, we will probably have fallen so far behind that we will never catch up.

Although there has been skills investment for thirty years or more, problems persist because of poor institutional focus. We lack an integrated strategy for skills development; not enough attention has been paid to literacy and numeracy; and we have not sufficiently deployed management productivity training across all businesses and sectors.

Skills to Drive a Productive Society spells out how the UK can reverse the decline and meet the challenges soaring tech will bring, hyper competitive global markets and an age of uncertainty at home and abroad.