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Mr. Gordon Marsden (Blackpool, South) (Lab): It is a great privilege and pleasure to serve under your chairmanship, Mr. Gale. I am delighted to have the opportunity to open this debate on initiative, skills and economic recovery in Lancashire. I shall draw on my experience as an MP for Blackpool and Lancashire, where, as Members will know, regeneration has been key to everything that we have been trying to do over the past six to eight years to broaden our skills base and opportunities. That regeneration has been not just of buildings but of human capital, which I shall focus on today.
I shall also draw on my experience in recent months as a member of the Select Committee on Innovation, Universities, Science and Skills and as chairman of the all-party group on skills, which works with the National Skills Forum. Several reports are highly relevant to the issues that we shall discuss today. The Select Committee report, Re-skilling for recovery, was produced in the aftermath of Lord Leitchs report. It emphasised the role of bottom-up initiatives, which are particularly important to regional and sub-regional skills policyLord Leitch did not deal with that significantly in his final reportand how small and medium-sized enterprises respond to the Leitch agenda.
The all-party group and the National Skills Forum have produced two reports. The first, Closing the gender skills gap, was published in February. It looked specifically at more flexible working, which women need, as well as more child care support and cover, and challenging gender stereotypes. It focused on what sector skills councils could do, particularly in respect of apprenticeships.
The most recent report from the all-party group and the National Skills Forum is Progression through apprenticeships, which looked at clearer mapping between diplomas and apprenticeships, easier access for apprentices to higher and further education, recognition of the need to reform funding for the over-19s, and good information, advice and guidance. All those issues are relevant to the situation in Lancashire in terms of skills initiatives and how we combat the downturn.
The north-west has a strong and proud history of industrial development and manufacturing, but at present, skills levels in the region are below the average for England and Wales. That is not surprising, given global economic changes that have seen UK priorities shift away from manufacturing and towards the service and financial sectors. The north-west and Lancashire have made strong strides in those areas, but compared with London and the south-east there is still a gap to be plugged.
Skills levels in Lancashire generally share the greatest similarity with the UK average for the region. Wealthier areas of Lancashire have benefited from the growth of Manchester as the economic hub of the north-west. Shifting populations have been a key factor in the past 20 years, with many people leaving economically challenged areas of the region for other parts of the country such as the south-east.
The north-west matches the national average for people with low and mid-level skills but has a smaller proportion of those with skills at the highest level. The average in
England and Wales is 19 per cent. with skills at level 4 and above, but it drops to 17 and 16 per cent. in areas of Lancashire and the lakes. Therefore we need to do a great deal to encourage those with higher level skills to remain in or to move to the area. That is particularly true for what, for the sake of this debate, I will call second-level towns and cities in Lancashire, although I believe that the phenomenon is countrywide.
That view of skills and skills needs was confirmed relatively recently in statistics produced for the Lancashire Economic Partnership in a report on skills in Lancashire that came out in November 2008. It stressed the importance of improving the quality of the education offer, particularly at further and higher education level, of attracting and retaining people with higher level skills in Lancashire, and of upskilling the existing work force. It identified three sub-areas in Lancashire: the Fylde coast, which covers Blackpool, Fylde and Wyre; Pennine Lancashire, which covers Burnley, Blackburn, Rossendale and Pendle; and mid-Lancashire, which covers Lancaster, Preston, Chorley and South Ribble. The key issues for all those areas are changes in the future skills profilethe skills levels of 300,000 people in the region will probably need to be improved by 2015and demographic changes, which mean that the majority of those people will have to be of working age.
Rosie Cooper (West Lancashire) (Lab): My hon. Friend mentioned areas of Lancashire but one that I did not hear mentioned in any of the three cohorts was the area of west Lancashire that includes Skelmersdale, which is an area of high deprivation. As it desperately needs investment in skills, I was sad not to hear it mentioned in the list that he read out.
Mr. Marsden: My hon. Friend chides me for a purpose. I saw her in the Chamber but did not know whether she wished to intervene or speak on the issue. She is absolutely right, of course. Historical problems in Merseyside have had a strong impact on that area, but as she may wish to mention later, there are some encouraging signs in that area of her constituency, not least in the construction industry.
Big numbers need to move in terms of skills levels, and level 4 is one of them. Lancashire is well placed for that because of its proximity to large higher education institutions in Greater Manchester and Merseyside, but there are other areas such as level 2. By 2015, about a third of the demand will be from hotels, restaurants and distribution.
It is true that small and medium-sized enterprises dominate the Lancashire economy. That means that all the problems nationally in getting small and medium-sized enterprises to train exist and may be magnified in the Lancashire area. As I have already said, and as the report points out, we need to attract new non-Lancashire graduates but also to encourage Lancashire residents who study outside the region to return when they complete their studies.
One of the things that we have to ask ourselves in a recession or downturn is what we are training people for. A key task for the Government and business and education institutions during a recession is to refocus learning opportunities around enabling skills, and to give people credit, in both senses of the word, for training that does not necessarily lead directly to employment.
Research has shown that people are most ready to believe that they can retrain or re-enter employment during the first few months of unemployment, so intervention should be made early during the economic downturn. The recent Government announcements in the Budget in that respect were very welcome. There will be significant consequences for Train to Gain. More flexibility needs to be built into the programme to ensure that many more unemployed people will be able to access training or ongoing education, andthis is particularly true for Lancashirethe Government or their agencies, not necessarily employers, will increasingly need to co-ordinate and sponsor ongoing education and training, at least for temporary periods. That will prevent Train to Gain being snatched away from people who are facing redundancy.
Another report that has just appeared looks at the skills that will be needed for an upturn in the north-west. It draws on experience statistics, which are modestly encouraging for the north-west as compared with other regions. It expects a smaller contraction of the economy in the north-west than elsewhere in the UK, especially London, and a stronger recovery in 2012-13. Some of the reasons for that are resilience in the engineering and the aerospace sectors, which are very important in my part of the world; new opportunities from renewable and low-carbon technologies; and a likely increase in self-employment and micro-enterprise. I can vouch for that in Blackpool, where we have the important Get Started unit as part of the enterprise centre. It is funded from a local enterprise growth initiative and £30 million that was given by the Government to Blackpool. I was told recently that, of the 300 to 400 people who came through its doors who got on to self-employment or micro-enterprises, 80 per cent. are still trading after a year. For anyone who knows the statistics for small businesses and start-ups, that is an encouraging sign.
There are other initiatives in my constituency, including in Bloomfield ward, where Jobcentre Plus has been doing an interesting and positive pilot looking at a small number of people, who are nevertheless important, who have been out of the work force for a long period. It is just as well that we have taken that approach, because there is a structural weakness in, or structural challenge for, second-level cities and towns in dealing with some of the current problems.
In January, the Centre for Cities highlighted as potential problem areas in the regionparticularly in LancashireBlackpool and Warrington, because of leisure and distribution redundancies, with Blackpool again, and Bolton, in terms of construction. We have to recognise that although we have done fantastic things in the regeneration of our big cities over the past 10 to 12 years, regeneration has not always trickled down to second-level towns and cities; in Lancashire, for example, we are talking about Preston, Burnley and Blackpool.
The phenomenon does not exist just in Lancashire. On the other side of the Pennines, the same thing can be seen when comparing Bradford with Leeds. We cannot assume that city regions, however dynamic they are, will automatically trickle down their activity to such areas. It is even more important to recognise that fact in a recession. That is why public sector jobs, which are continuing to move out of the south-east as part of the Governments strategy, need to go not just to major cities, but also to second-level areas. In Blackpool and
the Fylde, for example, we have enormous experience over 50 years of public sector jobs, including in the civil service. At the moment, the town council, with the ReBlackpool scheme, is redeveloping the Talbot and Brunswick gateway, which we hope may be a recipient of the net outflow of jobs from the south-east.
I have mentioned already the concentration of aerospace industry in Lancashire and the importance of employment in that sector. That employment is holding up, but it is all the more important to support the supply chain and smaller companies, because the ratio of direct to indirect jobs that are dependent on the sector is anything between 1:3 and 1:5. The executive director of the Northwest Aerospace Alliance, Martin Wright, said at the beginning of April that improvements are needed to the credit available to the 1,500 small firms making up the supply chain in the region if we are to maintain the support of companies such as BAE Systems, which is involved in a major way in fighter jet-building programmes: not just the Eurofighterthe Typhoonbut the Americans F-35 jet-building programme.
The report also highlighted the importance of educational infrastructure in raising skills levels, especially given the rising demands of employers. Importantly, it also highlighted issues to do with retirement and replacement. Industries in the north-westin Lancashire in particular, the engineering, chemical and nuclear industriesall have significantly ageing work forces, so it is important to look not just at how to bring new young people in, but at how to retrain and reskill older workers.
The report also identified the need to underpin skills in the so-called STEM subjectsscience, technology, engineering and mathematicsand in respect of innovation. I was encouraged to see that my hon. Friend the Secretary of State for Innovation, Universities and Skills, on his recent tour of the north-west, visited a number of areas and looked at clean technologies, high value-added manufacturing and emerging technologies and, in particular, the apprenticeship centre at the Springfields nuclear fuel plant, which is one of the leading apprentice training centres in the UK. Close to 2,000 people are employed at Springfields, including a large number of my constituents. With the change and development in the economy towards nuclear power, that is a key area for development. I praise the nuclear academy at Springfields, in particular, and the sector skills council Cogent for taking those things forward and developing them. That is a bright side to what is going on.
Companies looking for new staff in a recession will be overwhelmed with quality applications from people with experience and the knowledge and qualifications to match it. Recent graduates and those in entry-level jobs will thus find it more difficult than ever to push forward with their careers and may decide to stay put on a lower salary until the recovery starts. The downturn offers new opportunities not just for Government, but for businesses to consider ways in which young people may want to do some volunteering and offer them time for community courses and other activities. Those are not just things worth doing for the sake of society; they build up practical skills and experience.
The downturn must not be an excuse for pushing young people out of the classroom and into the job market. Education and training continue to offer a strong route to success for young people and should not be seen as expendable. Promises or suggestions about
slashing public spending as a knee-jerk reaction to a long-term problemsuch as those made on occasions by the official Oppositionare not the answer. Now is the time to invest in young people entering the job market. We must not cut them adrift.
I was pleased with several announcements in the Budget that will benefit us in Lancashire. The extra support to help people find work quickly, providing a guarantee of a job or training, is needed. The £120 million for work-focused re-employment training will provide unemployed 18 to 24-year-old youngsters with real help for 12 months to find work and get into work in sectors with strong future local demand. The funding for traineeships in the care sector and the spreading of business rates over three years are both important initiatives.
In April, the Government announced the results of the economic challenge investment fund, which was set up with the Higher Education Funding Council, for universities to bid for money to set up schemes to help individuals in business through the downturn. The total value of the 77 bids accepted by HEFC, a number of which come from Lancashire and the north-west, is important, because it is in addition to the £148 million that HEFC is providing over three years to support universities and colleges to respond to employer demand for courses and training, and to raise work force skills to higher levels. The north-west is well placed to benefit from such initiatives. The regional focus of higher education in the north-west, as I shall mention shortly, is much stronger than in some other regions.
I want to say a few words about the importance of apprenticeships in skills development and in tackling the downturn. I have already mentioned the changes in demography, which have been well advertised by the head of the UK Commission for Employment and Skills, Chris Humphries, and several others. We know that demography will ensure that the profile of apprenticeships will have to change significantly from 2010, which means that we will need more flexibility in delivery. Sadly, as things stand, some of the apprentices who have been tempted into SME work under Train to Gain are now finding themselves in difficulty because of the downturn and they will need to benefit from being picked up and sheltered via universities and the further education sector, as is happening already in one or two universities in the north-west and in Lancashire.
Skills and apprenticeships were at the heart of the policies needed before the recession and that remains even truer now. Regeneration is about reskilling people as well as being about buildings and structures. What does that mean in practical terms? Apprenticeships need to prioritise a solid skills base for service and manufacturing in Lancashire, specifically in areas of growth, such as construction and green-collar jobs, but we must also ensure that teachers and employers regard apprenticeships as viable alternatives to A-levels and for higher education entry.
The signs so far are that the Governments strong, consistent investment in apprenticeships is beginning to pay off. We can certainly say that that is so in Lancashire. There is a higher number of apprenticeship starts in Lancashire than in most areas. Work-based learning grew by 30 to 35 per cent. between 2005-06 and 2006-07 significant and important figures. We have to consider
in this mix whether a greater combination of on-work and apprenticeship activity and possibly a more modular approach in some cases will increase completion rates.
Further education college leavers are achieving their aims at a wide level under Train to Gain in Lancashire and the north-west, but I want a much more energetic and proactive examination of some of the missing or neglected areas. The National Skills Forums recent report on women and skills suggested that the Government should ask the National Apprenticeship Service to explore ways of increasing the number of part-time apprenticeships, which would benefit women who want to take apprenticeships but are unable to commit themselves to full-time work.
The expansion of manufacturing apprenticeships and the Governments new manufacturing strategy provide the opportunity to develop green-collar jobs throughout the UK, and specifically in Lancashire. Expanding apprenticeships in a low-carbon economy is a vital first step in ensuring that we are prepared to take advantage of the upturn. Lancashire can benefit from investment in green jobs during the downturn, particularly in manufacturing and wind farm projects, a number of which are posited for Lancashire and the north-west, and will create jobs for sheet metal workers, machinists and truck drivers. Increasing the energy efficiency of buildings will require roofers, insulation installers and electricians. The issue is also about reskilling people with green credentials, as Chris Humphries of the Commission for Employment and Skills highlighted.
Many of the issues that I have talked about, such as older workers, soft skills and graduate output and retention in the region, can be met via further education. I shall refer to SQW Consultings recent report to the Northwest Regional Development Agency on the impact of further education in the north-west. It emphasises that apprenticeship starts are consistently higher than in any other region, and that the proportion of 16 to 18-year-olds at sixth form and further education colleges is much higher than elsewhere, but that 37 per cent. of businesses still believe that their existing work force has skills gaps, which emphasises the need to upskill and retrain the existing work force, particularly women. Leadership and management skills are still lower than elsewhere, despite good Train to Gain figures in Lancashire and the north-west. The north-west has the highest number at 4,900 in 2007-08, while the figure for Blackpool in the same year went up from 400 to 900.
The report also emphasises the point that further education colleges are key to the economy of the north-west and Lancashire. In the north-west, they employ the equivalent of 24,000 staff, their input to the north-wests economy is estimated at £1,450 million, and they bring in learners who contribute £277 million per annum to the regions economic activity.
Much of the growth in level 4 will come from people already in employment and often supported through an employer.
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