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Government's Industrial Strategy: This all-saving battle plan is just a damp squib

By Simon Penfold | Business | Published:

We have had a week now to fully digest the proposals laid out in the Government’s flagship Industrial Strategy. And pretty thin gruel it has turned out to be.

Apprenticeship numbers have collapsed over the past year

Ignoring Labour’s response, which largely seems to be made up of throwing state money at the problem and putting unions on the board, the grand plan is slim on detail and often seems to miss the point.

To be fair it is a White Paper, which means this is the Government setting out its proposals for the future. But a bit of serious detail would have been nice. And what detail there is seems hopelessly off target.

Launching the Industrial Strategy, Business Secretary Greg Clark said: “The Midlands is vital to the UK economy and this strategy, through investment in infrastructure, skills, 5G connectivity and clean growth technologies, will build an economy fit for the future.” In terms of infrastructure, there is the £250 million for the West Midlands Combined Authority as part of the new £1.7 billion Transforming Cities Fund “driving productivity through improving connectivity”.

That money will go towards expanding the Metro tram system in the Black Country. So in terms of practical assistance to improve business productivity in Shropshire, it scores a big fat zero.

What companies need are major improvements to the local road and rail system so that the raw materials they need and the goods they are trying to get to market aren’t stuck in gridlocked traffic on a dual carriageway or a country lane.

And as for investing in skills, there is the promise of greater investment in Further Education through T Levels. The ‘T’ is for technical, and much welcomed. But there was nothing to address the elephant in the room, which is the staggeringly poor delivery of training places since the launch of the new apprenticeship levy.

While the private sector is putting its money where its mouth is with projects like the recently opened Marches Centre of Manufacturing and Technology in Bridgnorth, the latest set of figures showed that once the Government’s levy kicked in, the number of apprenticeship starts collapsed, falling 61 per cent from 113,000 last year to 43,600 in May and June. No-one seriously expects the next set of figures to be any better.

The levy scheme isn’t a bad one and can be made to work for companies’ benefit, but it’s been poorly explained and most firms just see it as another tax.

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Responding to the dramatic falls, a Department for Education spokesperson said in October: “Our apprenticeship reforms have put control back into the hands of employers so they will gain the skilled workforce they need to compete globally. We know that the last year has been a period of huge change for employers but it is right that they are taking their time to plan ahead and maximise the opportunities the apprenticeship levy can bring.”

Which sounds like a Government department ignoring all the feedback from the business sector and ploughing on regardless.

Apprenticeships are absolutely vital. There is a 20-year recruitment gap in most industries and anything that slows down attempts to tempt young people into manufacturing, construction or any other technical career isn’t just a bad thing; it’s potentially disastrous. Especially if we start losing more EU workers due to Brexit.

And that shortage of workers is a particular concern for Shropshire’s agricultural industry. Agriculture did get a mention in the new Industrial Strategy, hailing the work of research and offering more money to develop technology and aid in exports. That included £90 million for Centres for Agricultural Innovation to support adoption of new technologies and ways of working, a £70 million Agri-tech Catalyst fund to help companies take projects from laboratory to market and a dedicated UKTI Agri-tech team to boost exports.

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But it seems a drop in the ocean in terms of an industry worth about £24 billion a year and employing nearly half a million people, let alone the value of the associated food processing and transportation industries.

At least the Budget promised £5 million for a construction skills training scheme. It can’t come soon enough for local building firms.

Possibly the best hope comes from proposals for developing local industrial strategies, tailored to the needs of particular areas, but that won’t be until 2019. Quite why it takes two years is another matter entirely. If the Government bothered to listen to businesses or organisations like the Shropshire Chamber of Commerce it could put together a list of practical moves to help agriculture and manufacturing industry in about a fortnight.

Instead of pumping more money into universities and cherry-picking sexy new industries like autonomous vehicles and artificial intelligence – which are already attracting enough private sector money – it might have been more use to sort out apprenticeships, boost the R&D tax credit scheme by more than just one per cent and start spending some serious money on solving transport bottlenecks right now.

A sound, practical, hard-headed Industrial Strategy is an absolute necessity for Shropshire and the West Midlands, and for the country as a whole. It’ll be nice when we get one.

Simon Penfold

By Simon Penfold
Business Editor - @SPenfold_star

Business Editor based at the Express & Star's head office in Wolverhampton, looking for stories big & small.

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