Wednesday 11 May 2016 6:34 am

Northern Powerhouse: Businesses and government have a collective responsibility to end youth unemployment and close the skills gap

With youth unemployment three times the national average, and businesses across all sectors citing the skills gap as one of the biggest barriers to growth, the talent pipeline is one of the most pressing issues facing England’s economy.

It is for this reason that today’s announcement by the secretary of state for education, Nicky Morgan, of a new steering committee of head teachers to help shape the future of careers and enterprise provision in England is incredibly important.

The secretary of state’s announcement will be made at an event in Liverpool to an audience of business and education leaders. It is being hosted by The Careers & Enterprise Company, the government-backed organisation launched to ‘join the dots’ in careers and enterprise provision across England.

I am becoming more and more aware every day of the crucial need to strengthen links between employers and education providers.

Analysis of data from our Prioritisation Indicators report, for instance, shows that three of the five regions in England with the highest economic growth (The Black Country, Manchester and Birmingham) are also ‘cold spots’ for enterprise and careers provision.

The Black Country, for example, showed a 4.5 per cent growth in GVA (Gross Value Added by industry), far above the national average of 3.1 per cent. But it is also one of the ‘Coldest Spots’ in England for careers and enterprise provision. 

Why is this important? Businesses need access to a sufficient talent pool in order to innovate and grow.

Access to a skilled workforce is also essential in encouraging investment in these areas, and is vital to the region’s growth. Without engaged and suitably-equipped future employees ready to take these jobs on, growth will suffer.

The lack of STEM skills, which are applicable to more jobs than ever before, is particularly worrying. The industry is crying out for talent. Over half (53 per cent) of businesses in the engineering sector expect difficulty in recruiting STEM-skilled staff in the next three years.

I’ve experienced this first-hand; the average age of a National Grid employee is around 47, meaning we are on the brink of an exodus of talent which we desperately need to fill.

There is clear evidence on how to fix this issue. We need to inspire and inform young people while they are still in education. Research shows young people who have multiple encounters with businesses while in education are significantly less likely to become NEET and can increase their earnings by 18 per cent.

Yet only in 40 per cent of schools are businesses interacting with young people once a year. This means young people do not have access to the information they need to make informed decisions about their careers, or the inspiration to enter STEM industries.

If a reversal of these worrying trends is to happen, businesses must do more. YourLife recently found that interest in STEM subjects drops significantly throughout secondary school, but enabling businesses to engage with young people may counter this.

The Careers & Enterprise Company launched its Enterprise Adviser network to do just this. It is linking every school and college in the country with a senior business volunteer to help join these dots. We also announced the winners of a £5m investment fund which –boosted by a further £4.5million of matched funding – will help more than 250,000 young people including those in ‘Cold Spots’ such as The Black Country, Manchester and Birmingham, through programmes which boost employer engagement.

There is a collective responsibility to end youth unemployment and close the skills gap.

For lasting change we need more businesses to take action. If more businesses across the country make a concerted effort to engage directly with local schools or colleges, we will be able to avert a potential skills crisis, and ensure every young person is given the opportunity they deserve.

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