The only way is up!
For many years the West Midlands has recorded some of the worst skills figures in the country, with the region having the highest percentage of people without a qualification in England and the third lowest percentage with a level 4 qualification or above. But if the region’s performance is poor, then so is the nation’s. According to the Government’s Industrial Strategy, “England is the only OECD country where 16 to 24 year olds are no more literate or numerate than 55 to 64 year olds”.
Industrial Strategy and Education
That the situation has remained resistant to significant improvement is, needless to say, a cause for concern. The Industrial Strategy is one of a long line of interventions aimed at raising qualification levels. The second of ten pillars, the Developing Skills strand aims to ensure “everyone has the basic skills needed in a modern economy”, creating a new technical education system, boosting STEM subjects (science, technology, engineering and maths), and “raising skill levels in lagging areas”. Despite this prominence, the Business, Skills and Industrial Strategy Select Committee were unimpressed, saying the skills elements of the strategy were “deeply disappointing”, calling for the “proper coordination between business and education and skills policies” and further devolution to councils and Local Enterprise Partnerships (LEPs).
Ring-ring goes the bell - school funding winners and losers
Bearing in mind the importance of this connection, it’s worth noting that one of the key supporting initiatives name-checked in the Industrial Strategy is the new National Funding Formula for Schools. Last week the Education Policy Institute (EPI) published its analysis of the formula’s effects. Across the country, although there would be winners and losers at both school and local authority level, most authorities should gain from the formula. The funding formula is complex however, and the EPI note that there is “no consistent pattern” to the authorities that would gain. Across the West Midlands, the effects were estimated by EPI as follows:
|National Funding Formula change||Local Authority|
|+2.0% or more||
Solihull, Stoke-on-Trent, Telford, Worcestershire, Wolverhampton
|+1.0% to + 2.0%||Staffordshire|
|+0.5% to +1.0%||Dudley, Shropshire, Warwickshire|
|-0.5% to +0.5%||Herefordshire, Sandwell, Walsall|
|-1.0% to -0.5%||-|
|-1.0% to -2.0%||-|
|loss greater than -2.0%||Birmingham, Coventry|
|Source: EPI 2017|
At the regional level it appears only London would experience a net loss in funding. The West Midlands also fairs relatively poorly, its funding increasing by 0.3%, only better than London and the North West.
… but even the winners are likely to lose
The changes arising from the funding formula are not the whole story, however. As a result of other cost pressures the EPI suggest that all schools are likely to be ultimately worse off than now, even those gaining from the formula. Indeed, it seems that half of all primary and secondary schools face significant “real cuts in funding per pupil of between 6 and 11 per cent” by 2019-20. Bringing the figures to life, the EPI say this would mean an average loss of two teachers from each primary school and six from each secondary. The funding pressures estimated by EPI for the local authorities in the region are set out here:
|Average real terms per pupil funding pressure by local authority||Local authority|
|Greater than 10%||-|
|8% to 10%||Birmingham, Coventry|
|6% to 8%||Dudley, Herefordshire, Sandwell, Shropshire, Warwickshire, Walsall|
|4% to 6%||Solihull, Staffordshire, Stoke-on-Trent, Wolverhampton, Worcestershire|
|2% to 4%||Telford|
|Source EPI 2017|
Reach for the stars
If funding for schools is any indicator of the outcomes for young people, then the challenge of connecting education and skills to the economy may well become more difficult. In this context, it’s probably worth taking a look at where the job prospects for young people will be in the near future.
Around the country local growth strategies are setting ambitious job creation and productivity targets. Achieving these will depend, among other things, on a suitably skilled workforce. For example, the West Midlands Combined Authority’s economic plan, which covers three of the wider regions’ six LEPs, has the challenging target of adding half a million new jobs by 2030. Against a 2013 baseline, that would equate to around 30,000 jobs a year. While the area covers by far the most populous part of the West Midlands region, delivering on this aspiration will be a tall order. ONS figures show that 25,000 workforce jobs were added across the whole of the West Midlands in 2016.
If producing the volume of jobs is challenging, then raising people's qualification levels to meet their demands will be equally testing. Last year’s Working Futures report by the recently defunct UKCES (UK Commission for Employment and Skills), reported that nationally the strongest job growth would be in the professional and technical roles needing level 4 qualifications or above, an area the region is particularly weak in. UKCES foresaw some 2 million more of these jobs being created between 2014 and 2024. With the ONS (Office of National Statistics) figures showing the West Midlands recording a fall in disposable incomes and bucking the national trend of falling unemployment, more and better-paid jobs would undoubtedly be welcome.
At the other extreme, the UKCES also suggested that there would be growth of around 400,000 jobs in often low paid, low skilled sectors such as caring, leisure and other service roles - sectors which already employ a high percentage of young people. While it suits some, a significant number of these jobs are insecure. According to ONS figures, 22% of all zero hours contracts are in the accommodation and food industry and a further 20% in health and social work.
The squeezed middle
Creating something of a schism in the employment market, it seems it is the jobs requiring mid-level qualifications that will be squeezed. UKCES foresaw net job losses for administrative, skilled trade and process, plant and machine operative occupations to the tune of a collective 520,000. In the past, these might have been the sorts of relatively secure jobs which many young people would have moved into or aspired to. The strength of the region’s manufacturing sector suggests this picture may not be exactly mirrored in the West Midlands, but even so, those moving up the qualifications ladder may well be squeezed in these areas with many finding there is no corresponding rung on the employment ladder. Ensuring that we have an economy that does indeed work for everyone is clearly no short-term task.
Look out for the full March issue of WMiC in your inbox soon.