Levelling up after lockdown

21 July 2020 -

Speed gauge

We can’t allow Covid-19 to accentuate regional economic disparities. Insights from a recent CMI expert roundtable

Matthew Rock

For a short period at the beginning of the Covid-19 lockdown it felt as if the pandemic might be a tipping point, a moment when long-standing economic and social inequalities in the UK were finally addressed.

Large swathes of the workforce were now on a level playing field working from home. Low-paid workers such as nurses, delivery drivers and retail staff were lauded as national heroes. Managers were redeploying as frontline workers. We were all in this together.

But as the crisis deepened, it became clear that Covid-19 was actually sharpening inequalities. Yes, every school was closed, but some children were enjoying a far better lockdown education than others. The Coronavirus Job Retention Scheme was designed to support all workers and organisations but, as the weeks passed and the data flowed in, we learned that the much-hailed scheme was largely being used for the lowest-paid workers.

And as the UK tiptoed out of lockdown, many of the areas where Coronavirus has spiked have – surprise, surprise – been those already suffering from economic decline, low productivity and social disadvantage.

‘Levelling up’ was already the organising mantra of the UK’s government under Prime Minister Boris Johnson pre-pandemic. Now, despite the enormous financial challenges presented by high unemployment and unprecedented government borrowing – it will surely become more important still. To put it in blunt political terms, if Covid-19 is seen to accentuate economic and regional disparities, then the Conservatives can wave goodbye to those ‘red wall’ seats won in the 2019 General Election and – far worse – many regions of Britain will continue to decline in economic terms.

Levelling up is often associated with spending on energy and transport infrastructure. At a recent CMI roundtable for expert partners and stakeholders, the focus was on levelling up skills and access to skills development. After all, if York is to be the new home of the House of Lords, it’ll need the people with the capabilities to support such an ambitious plan...

ENABLE SKILLED PEOPLE TO STAY CLOSER TO HOME

If we do see a lasting shake-up in the way people work, this could have huge and positive effects on access to opportunity around the UK. Instead of relocating to a large city where property is unaffordable, many of us may choose to stay nearer to home, friends and support networks – and still be able to do their job and progress.

Martyn Kendrick, Deputy Dean and Head of Derby Business School at the University of Derby, says that if cities and regions are able to retain talent and not see a brain drain to a handful of urban centres, this could be a hugely positive outcome of the Covid-19 crisis. “Right now, around 70% of students in Derby remain in the Midlands area after graduation, but for some regional universities they have less than a quarter of their graduates still working locally 3 -5 years after graduation. Maybe increased ‘working from home’ will allow people with higher level skills to be able to remain in their regions rather than gravitate to the big cities. Retaining skills in an area is a key issue,” he says.

To achieve such a positive result, the UK needs to nurture vibrant ‘clusters’ of innovation and economic activity, says Neil Reynolds from CMI Cymru. “A lot of Silicon Valleys.” These should be focused around existing universities and other educational and business infrastructure. Cambridge and Oxford are role models in this regard, though there are other examples such as Bournemouth where a group of colleges and universities have built a world-leading videography and animation ecosystem.

While Kendrick agrees with this point, he points out that neighbouring universities must overcome their traditional fierce competition – which will likely be intensified by Brexit and a reduction in available funding – and instead cooperate around building robust local economies. He, like others, forecasts some consolidation in the higher education sector that may aid this process.

DON’T REINVENT THE WHEEL

Educationalists seem to agree that it’s unhelpful to tinker with existing schemes. Euan Blair from the apprenticeship education provider Whitehat said recently: ““[When it come to skills programmes] you’ve got to look at existing mechanisms like apprenticeships; then free up the funds.”

Joe Fitzsimons, head of education and skills policy at the Institute of Directors, points out that degree apprenticeships – which have been shown to boost productivity – have provided important support to help employers invest in training and skills. With skills imbalance across the country, apprenticeships will be a vital tool for the levelling-up agenda.

Amy Kendrick, COO at The Headmasters' & Headmistresses' Conference, says there’s an important role for the regional boards of organisations such as CMI to build a ‘developmental culture’ in which every employee and employer understands the importance of continuing professional development (CPD).

BUT WHERE’S THE JOINED-UP POLICY?

Is it the job of central government to coordinate regional development? Or should the process be left to the regions? Which government department should set the strategy – the Department for Education; BEIS; Digital, Culture, Media & Sport; Communities? Or is all this so central to this government’s identity that it’s bound to be set by 10 Downing Street? What to do about the Apprenticeship Levy system to make sure that funds are, first, actually spent; and second, that the skills development is well distributed around the UK? Has devolution created an environment in which everyone goes off and does their own thing? The policy debate around skills and the regions can get obscenely complicated and lose public ‘cut through’ as a result. When it comes down to it, it’s surely about creating a well balanced national economy in which each region is able to build its own robust economy that offers opportunities to many.

Shonaig Macpherson CBE CCMI, President of the Scottish Council for Development and Industry, says: “There should be flexibility for development of skills programmes at local level. There are good examples in Scotland as well as Wales that can demonstrate how responsive local partnerships can be to meet local industry skills shortages.

“How this is balanced against the complaint by many large UK employers that they have to adapt to different systems across the four nations of the UK, as is the case with the Apprenticeship Levy, should be considered.

Mandy Crawford-Lee, director of policy and operations at the University Vocational Awards Council, says that we have to ditch the old turf wars – particularly the divide between higher and further education. “We need to be more aspirational,” she says. Think about the purpose of skills policy and focus on developing the skills that employers actually need – “what do we actually want as an outcome of our institutions?”

The policy team at CMI produced a powerful and illuminating background paper for this roundtable. For anyone with an interest in the ‘levelling up agenda’, you can read it here.

You can also listen to the follow up discussion with Joe Fitzsimons on the CMI podcast.

Chartered Management Institute · Levelling Up