The Chamberlain News

‘Quiet revolution’ for GBSLEP, but skills gap still major cause for concern

The fifth annual meeting of the Greater Birmingham and Solihull Local Enterprise Partnership promised a ”quiet revolution” and featured some impressive job creation and investment figures.

But beneath all of the razzmatazz lay a most inconvenient fact – this region still lags behind the rest of the country in terms of economic output and workplace skills.

Of course, there is good news, and plenty of it.

During 2015 the West Midlands exported £29 billion worth of goods, more than any UK region outside of London and the south east, some 20,200 new businesses were formed, Birmingham was named the top UK regional city for quality of life, and more people moved to Birmingham from London than any other city in the country.

Amid the backdrop of a growing economic renaissance, GBSLEP helped to attract 73 foreign direct investment projects (FDI) to the area in 2015 – the best performance of any LEP.

But, the millstone around the neck of Greater Birmingham hangs as heavy as ever.

Our industry simply isn’t productive enough. There is a £3,451 gap between GVA here and the national average. On the skills front, the news is terrible. The gap between the working age population in the West Midlands without NVQ3+ qualifications and the rest of the country has widened from 2.7 per cent in 2010 to 3.1 per cent today.

Andrew Cleaves, the GBSLEP board director responsible for skills, was honest enough to admit that if the workforce qualifications performance was being marked, the region might scrape a B-minus.

GBSLEP Deputy Chair for Delivery Steve Hollis described the GVA gap as “increasing and unacceptable”.

However, commenting on the LEP’s overall record, he added: “The progress we have made is beyond our wildest expectations, but do not under estimate the significant challenges that lay ahead.”

No analysis of GBSLEP’s performance would be fair without a brief appraisal of the journey so far. Five years ago, when LEPs replaced regional development agencies, no one really had a clue how things would turn out, not least the Business Secretary Vince Cable who described the LEPs as “Maoist” in that they were making up a revolution as they went along.

In 2011, LEPs had virtually no money, no real idea where they were heading, and much of the business community remained sceptical about the value of the new organisations.

Today, GBSLEP has millions of pounds in growth funds at its disposal and is a member along with the Black Country and Coventry and Warwickshire LEPs of the West Midlands Combined Authority. The LEPs are playing a key role in regional governance, and from next year will work with a metro mayor who will have statutory responsibility for addressing the skills crisis.

Business leaders have seen the value of GBSLEP and want to play a role.

GBSLEP chair Andy Street – real job, managing director of John Lewis – gave his usual polished performance, full of passion and hope. Every time Mr Street gives a presentation, the question inevitably arises as to who could lead GBSLEP when he finally stands down. These will be big shoes to fill for certain.

Mr Street announced that Chris Loughran, Vice Chairman of Deloitte UK, will be joining the partnership as Deputy Chairman for Delivery.

This year’s AGM was not quite so self-congratulatory as usual, although much use was made of words like “phenomenal, incredible story and exciting journey”.

The event began with a curious video proclaiming that the LEP was heading a quiet revolution, with no flag waving. Good change was happening, but you couldn’t see it. The change was “in our heads and our hearts” and we were being invited to “liberate our ambitions”.

Mr Street declared GBSLEP had made its mark in a “modest and humble, not boastful” way and that the organisation was “about doers and achievers”.

Several themes emerged, but by far the most important is around the “game changing” arrival of HS2 and the potential that will bring for regeneration and new jobs in the vicinity of the Birmingham Curzon and Birmingham International stations, although there will be too many West Midlanders unable to take advantage of this if the skills gap isn’t closed smartish.

A Youth Promise Plan, funded by £50 million of European money – take note, EU leavers – has already helped several thousand 15 to 29-year-olds to find jobs or training.

The Birmingham Enterprise Zone, funded over 30 years through business rates uplift, began life as a £275 million investment programme but is now worth £2 billion and will take in the £500 million Paradise regeneration project as well as the Smithfield transformation of the Wholesale Markets site in Digbeth, said to be the largest regeneration programme in Europe and a “once in generation opportunity we cannot afford to squander”, in Mr Street’s words..

The Enterprise Zone has helped so far to create 1,700 jobs and levered in £325 million of private sector investment.

Mr Street also announced that the LEP will be working on a spatial plan for growth concentrating more on local town centres and less on Birmingham. This plan will help to identify new housing “which is necessary for a vibrant economy” and will, presumably, marry in to planning strategies being worked up by the West Midlands Combined Authority, and from next year the metro mayor.