Bernard Ginns: Shortage of skills having big impact on growth of UK plc

The biggest issue facing Yorkshire businesses today involves human capital and the shortage of it.

Our education system is producing thousands and thousands of school leavers who simply do not have the basic skills that businesses need. That has to be a cause for huge concern.

A Leeds-based manufacturer told me: “The skill problem is on the shop floor. It’s getting guys to work in that part of the business. It’s a real problem for small manufacturing companies.

“We all have the same problem. We are all concerned about how to bring youngsters through to work in the factory environment.”

Not only does it make it harder for our companies to be productive and competitive, but it also increases the number of disenfranchised young people, storing up social problems for the future.

We are already in danger of losing a generation to worklessness.

To their credit, those at the top of our local authorities recognise there is a problem and efforts are underway to tackle the problem.

Last week, the local enterprise partnership for Leeds and the surrounding region launched a new campaign to get more young people into work.

The 5-3-1 campaign urges businesses to increase investment in skills and boost employment.

This is most definitely needed as the city region grouping of 11 local authorities has a higher than average level of unemployment with 8.8 per cent, versus 7.9 per cent in the rest of the UK.

The LEP campaign wants businesses to invest more in skills, enhance links with education, offer work placements to unemployed people, offer apprenticeships and mentor budding entrepreneurs.

Gary Lumby MBE, a board member, told the Yorkshire Post: “Government is concentrating on cutting back public expenditure. Therefore we can’t rely on Government to create opportunities for these young people and adult learners. We have to do it ourselves.”

Campaign backers have set a target for 1,000 businesses to sign up this year.

It might cost a little more than budgeted, but it has to be considered a worthwhile investment.

Leeds City Council is setting up an apprenticeship company and is looking at setting up a new academy to provide young people with vocational skills.

Over in Sheffield, the city council wants to tackle the skills issue by trying to win control of all skills funding from Whitehall.

Critics claim that the current system encourages colleges to concentrate on courses that are cheaper to run, regardless of whether they are useful to industry.

One leading Yorkshire industrialist said: “We don’t need more hairdressers in Sheffield city region – we need engineers and high-value skills for the sectors we are majoring on.”

Ken Torres, managing director at Torres Pumps, told a chamber meeting last month that manufacturers “are not able to deliver on exports” because of a serious shortage of skilled workers.

Andy Tuscher, regional director of the Engineering Employers’ Federation, has confirmed that the skills issue is near the top of the agenda for members “with regard to hindering growth”.

John Mothersole, the council’s chief executive, met with the Cities Minister Greg Clark last week to push Sheffield’s case.

He said that the council wants to create an employer-led system where businesses have a bigger say in the type of skills training in the area.

Everyone has a deep-seated interest in getting to grips with this tricky issue.

n A little knowledge is a dangerous thing. In the hands of a politician, it can be devastating. And amplified through the national media, the consequences can be lethal.

Take the storm around bankers’ bonuses. The importance of the financial services industry to UK plc gets totally lost. Instead, there is near hysteria.

Martin Jenkins, the senior partner for accountancy firm Deloitte in Yorkshire and the North East, raised the issue in conversation on Friday.

“There’s a danger that we end up with an environment that is actually not at all conducive to encouraging and supporting business in this country,” he told me.

“How we end up there if we are not careful is through an extreme focus of the populist agenda around bonuses and remuneration, which obviously need to be covered but not to the extent that we miss some of the other key trends that are important drivers of the recovery that we need to see in this country.

“Our manufacturing industry is performing very well. You don’t have to look very far to find some really outstanding success stories in manufacturing. Look no further than Fenner to take one example in our region.

“What I would like to see is a little broader perspective that looks as hard for the positive as we appear to do for the negative.”

@bernardginns