Friday 15 th February 2008

1. Skills and the Sub National Review: A City Region Perspective……………….Paul Thomas Manchester Enterprises Friday 15th February 2008

2. 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

3. 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

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

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

6. GDP Per Hour Worked (UK = 100)

7. 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

8. 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

9. Greater Manchester andits City Region

10. Geography

11. 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

12. 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

13. 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

14. 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

15. 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

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

17. 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

18. 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

19. SNR and Leitch: NW Response MAA proposals submitted by: • Greater Manchester • Liverpool City Region • Fylde Coast • Pennine Lancashire Decisions by June 2008

20. 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

21. 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

22. 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?

23. 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

24. Questions?