News | Wednesday, 27th February 2019

National skills policy needed to tackle the UK’s productivity problem

New report recommends measures to address the utilisation of skills in the workplace

Local policy is needed to address people management and work design, the report argues
Local policy is needed to address people management and work design, the report argues

The development of a national skills policy is needed to tackle the UK’s productivity conundrum, according to a new report on workforce development.

The recommendation is one of a range outlined in the report into the effective utilisation of skills in workplaces across the country, conducted by Manchester Metropolitan University and the Chartered Institute of Personnel and Development (CIPD).

Researchers have analysed the extent to which skills held by individuals match those required by their job.

As well as calling for a policy that supports the devolution of skills management to a local level, the report also outlines the need for flexible post-Brexit funding streams to respond to local needs.

Professor Carol Atkinson, Associate Dean of Research at Manchester Metropolitan University, said: “The UK experiences high levels of skills mismatch, with either under-utilisation of workers’ skills or workers who are inadequately skilled for their roles.

“Poor skills utilisation, alongside poor management quality, is generally held to be a central part of the UK’s productivity problem. Our report recommends a co-ordinated and coherent approach to local skills supply, which addresses the current divisions in policy and the lack of resource and infrastructure.”

Poor skills utilisation, alongside poor management quality, is generally held to be a central part of the UK’s productivity problem.

Central to the report, researchers at Manchester Metropolitan’s Decent Work and Productivity Centre analysed the role of Local Enterprise Partnerships (LEPs) in delivering local economic growth and addressing the UK’s skills utilisation challenge.

Professor Atkinson added: “The capacity of LEPs to deliver on their remit, given their size and resources, has often been questioned.

“While LEPs vary widely across the country, many operate with a supply and demand for low-level skills. This creates a negative cycle of firms operating low-road approaches and failing to invest in the workforce and their skills.”

In an effort to address this, the report calls for skills utilisation to be positioned more effectively within national policies, addressing both skills supply and demand as part of the remit of the LEPs and equivalent organisations.

Local Industrial Strategies, it is argued, will support this while providing opportunities to build local partnerships with a place-based approach and vision to local economic development.

Lizzie Crowley, Skills Policy Advisor at the CIPD, said: “Our report supports wider research that suggests the UK offers a high proportion of jobs that require few or no skills and that existing policy on skills supply, with its presumptive link to improved productivity, is unlikely to effectively address this.

“We believe the UK can learn from international examples, such as Finland, where national policy harnesses local policy to address people management and work design, using local employer networks and anchor institutions to create both inclusive growth and improved productivity.”

The full report, “Productivity and Place: The role of LEPs in raising the demand for, and use of, skills at work”, is available at www.mmu.ac.uk/decent-work-and-productivity/publications.

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