THE recovery is taking hold, says Chancellor George Osborne, and the number-crunchers are providing figures to back up his case with forecasts of higher growth than hitherto predicted.
Yet this is a curious kind of recovery in which higher productivity will be offset by stubbornly high levels of public debt, unemployment, continuing cutbacks as part of the ongoing austerity drive and – crucially – chronic skills shortages.
There are deep-seated worries about who will be the winner and losers in an economy that instead of being “rebalanced” seems to be on a twin-track journey. The south-east of England, and the city states of London, Aberdeen, Edinburgh, and one or two other relatively prosperous conurbations, continue to thrive as a result mainly of Britain’s continuing reliance on financial and professional services and, in Aberdeen’s case, a buoyant oil and gas sector. Meanwhile, the hinterland that is the rest of the UK economy struggles to find a purpose, and the business of “making things” remains on the endangered list.
One theme that emerged from a round table discussion last week on the future of engineering was the ongoing disconnection between the supply and demand for skilled labour. The Royal Academy of Engineering has produced a report which reveals that 39 per cent of UK engineering employers are planning to expand and recruit and that there is a requirement for 1.28 million jobs in science, engineering and technology by 2020.
The problem for employers is finding these people. Engineering continues to suffer from a poor image, a failure to understand that it is behind the development of iPads as well as the production of ball-bearings. There is an unwillingness by females and their parents to see it as a preferred career choice, and – as our discussion last week indicated – a long-standing failure to bring education and industry into line so that supply and demand move closer to some sort of equilibrium.
The Scottish Government has published an interim report from the Commission for Developing Scotland’s Young Workforce which addresses the need for more vocational training. Some progress is being made. Apprenticeships are regaining some of their popularity. But who should fund them? Some firms have taken it upon themselves to reinstate such programmes, but it is ad hoc and patchy. There are questions over the validity of number-targeting policies by politicians over the quality of training that potentially would be more rewarding.
The demise of large engineering companies must be factored into the decline of a sector that once made Britain the workshop of the world. They provided a conveyor belt of trained welders, riveters, electricians for smaller companies to tap into. Now those small companies are left to train their own or wait for the state to provide them with ready-made labour.
But this is not happening on a big enough scale. Hence, the skills gap. And the need for governments north and south to put skills at the heart of an industrial strategy that would underpin a more sustainable economic recovery.