Skills and the Sub National Review: A City Region

Perspective……………….Paul Thomas

Manchester Enterprises

Friday 15th February 2008

Presentation Format

• UK context• City regions• Greater Manchester• Sub National Review and Leitch• Implications for GM and other City/Sub-Regions

• Implications for HEIs and higher skills

UK Economic Context• Huge turn-round since 1970s• Growth of services sector• Improvements in manufacturing too• Growth supported by immigration• But:

– Growth unevenly distributed– Concentrated in London/SE– Other regions lagging– UK productivity still poor– Underlying skills problems– Worklessness and social exclusion

Annual GDP Growth in the World, the G7, and the UK

0

1

2

3

4

5

6

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Per

cen

t

UK World G7

Percentage of Working Age Population (15-64) in Employment

55

60

65

70

75

80

85

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Per

cen

t

Germany France UK United States G7

GDP Per Hour Worked (UK = 100)

90

95

100

105

110

115

120

125

130

135

140

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

France Germany USA G7

UK City Region Movement

• Began in mid 1990s• Core Cities Group: Birmingham, Bristol, Leeds,

Liverpool, Manchester, Newcastle, Nottingham and Sheffield

• Led by local authorities• Prompted by:

– Regional disparities– Recognition of importance of clusters and City Regions – Concern re excessive centralisation of UK and concentration of growth in

London/SE

• Reinforced by Scottish/Welsh devolution

High Performing City Regions

• High value sectors predominate

• High levels of R&D

• Strong entrepreneurial culture

• Concentrations of international HQs

• Higher level skills

• Less reliance on public sector

• Efficient transport infrastructure

Greater Manchester andits City Region

Geography

2010

miles

0

Congleton

Vale Royal

Trafford

Stockport

Tameside

Salford

Wigan

Bury

Oldham

Rochdale

Bolton

Macclesfield

High Peak

Warrington

Map data: Crown CopyrightCrown Copyright is reproducedwith the permission of the controller of HMSOand the Queen's Printer for Scotland

Greater Manchester

Economic Strengths• Manchester is the key driver for the City Region and

NW Regional Economy; rapid growth in GVA within last decade

• £50.5bn GVA delivered within the MCR in 2004; representinghalf (50.4%) of NW total; 5% of UK total

• De-industrialisation: Loss of jobs in manufacturing; but significant growth in value added and Advanced Manufacturing

• Rapid growth in services: F&P; ICT Digital / Communications; Creative/Digital/New Media; Life Sciences; Public Sector

• Rising employment and employee wages over last decade

• +100,000 extra jobs forecast within the MCR over next decade (GMFM 2007), but downside risks emerging

Business

• Significant and diverse business base

– 115,000 workplaces in MCR; 88,000 in GM (2004)

• Business productivity levels above regional

average

• Entrepreneurship & new business start-up strong

• Long term business survival lags UK average

• Inward investment successes

• University base is internationally competitive

Labour Market• The largest Travel to Work Area outside London

• Significant labour pool:

– MCR 1.5m economically active residents (GM 1.1m)

• Population growth forecast to continue:

– MCR 0.1% pa growth 1998 to 2003

– 0.3% pa 2006 to 2021

• Worklessness still a big challenge

Skills

• Qualification levels of employees within GM compare well with regional and national averages

• However qualifications levels of residents lag behind national averages

• Lower level attainment remains a significant brakeon economic performance

• Demand for higher levels skills will continue apace

• 75% of job opportunities will require NVQ level 2; 50% level 3 or above, over next 10 years

Benchmarking Performance

• GM GVA per capita in 2003 exceeded:

– West Yorkshire (Leeds and Bradford)

– South West Scotland (Glasgow City)

– Lille (Northern France)

– Barcelona (North East Spain)

• But lagged ‘aspirational’ economies:

– London

– Munchen

• Economic disparities within the MCR

Performance Benchmarking: GVA Per Resident Capita (Index of 100 for the UK Average in 2004)

155 122 88 68 93 98 109 95 93 89 77 72 77 78 97 101 128 1861150

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INDEX UK=100excluding extra-regio

UK average = 100

International benchmarks based on GVA Purchasing Power Parity data

Source: Eurostat

Key Assets

• Sector “Accelerators”

– Financial and Professional Services; Life Science Industries; Creative, Cultural and Media; ICT/Digital/Communications; and Manufacturing

• Manchester Airport

• Concentration of world-class Universities

• Dynamic Private Sector

• Local authority collaboration

• Strong public/private partnership

Sub National Review and Leitch

SNR: response to Core Cities and Lyons report

Key elements of SNR (and related Leitch):

• Economic development remit for LAs

• Revised remit/role for RDAs

• Recognition of importance of skills

• Transfer of LSC budgets to LAs

• Employment and Skills Boards

• Encouragement to City/Sub Regions to collaborate

• Multi Area Agreements as key vehicle

SNR and Leitch: NW Response

MAA proposals submitted by:

• Greater Manchester

• Liverpool City Region

• Fylde Coast

• Pennine Lancashire

Decisions by June 2008

MAAs

• A mechanism for achieving significant changes that could not be made in other ways

• Inability of Local Area Agreements to meet economic targets, as the effects of economic development policy occur at higher spatial levels

GM MAA

MAA will:• Contribute towards Greater Manchester achieving its

economic goals • Cover enterprise, growth, skills and employment =

the pillars• Be focused on strategic outcomes• Be flexible and incremental

MAA: • An important mechanism for improving city

governance, but not the only one

City/Sub-Regions: the Future

• Keen interest across country

• Bigger role in large /diverse regions such as NW

• Scottish devolution etc may give extra impetus

• Effective public/private partnership is vital

• Incremental development of governance

• Some cooperation between City Regions

• Complementing or competing with SE?

Implications for HE and Higher Skills

• Skills are central to City Region agendas

• Importance of higher skills recognised more and more

• Employers will want to include higher skills in ESB agendas

• Aligns with Govt pressure for HE employer responsiveness

• Likely to affect some HEIs more than others , because of

different missions

• But all will be affected

• Need to develop new partnership mechanisms and links,

where these do not already exist

Questions?