The Impact of Brexit on our Northern Regional Skills Base

The Northern Powerhouse is the second largest economic region of the UK. However, the challenges it faces in terms of delivering the housing and infrastructure necessary to continue to drive the northern economy are unprecedented. From industry attrition and demographic constraints to the impact of Brexit and the perceived general attractiveness of the industry, there are numerous risks that could impact future growth potential. Yet it is also true that with risk, comes opportunity.

The Size of the Problem

Britain must recruit over 400,000 people each year between now and 2021 – equivalent to one worker every 77 seconds – if it is to create the homes and infrastructure the nation needs. 81,000 of these people and up to 27% of UK infrastructure skills gaps are in the North of England. Historical issues around low levels of productivity and the high numbers of people moving away from the region further exacerbate the situation.  

In the event of a ‘hard’ Brexit scenario – for instance, extending the points-based system currently in place for non-EU migrants – the number of EU construction workers entering the UK could fall at the rate of attrition. If this were to play out, 215,000 fewer people from the EU would enter the infrastructure and house building sectors between now and 2020, further exacerbating the existing labour shortage.

What does this mean for the Northern Powerhouse? 

The topic was vigorously debated at our recent business roundtable event in Manchester, where we launched our Talent Scale Report to the region.  

Participants agreed that the onus is on everyone operating in the Northern Region to look at how we can begin to meet the challenge around skills shortages. It is clear that definite changes will need to be made. 

If we look at the Arcadis data, it is possible to assess those skills which are in greatest demand. It is these skills and competencies that most need to be embedded in the various academic curriculums offered by the region’s major educational institutions. If we are to improve the attractiveness of the industry, we must provide more detailed programmes and information about the sector and extend a better work experience and mentoring scheme to school leavers, apprentices and graduates. 

The Northern Powerhouse Partnership, in consultation with Arcadis and led by the Former Chancellor of the Exchequer, George Osbourne, will bring forward analysis that will map employer needs to skills, This will enable businesses, educational institutions and other stakeholders to begin to organize themselves around this challenge. For example, this information can be used to develop academic content that more closely aligns industry needs with future skills. Coupled with a strong employer advocacy programme, the tide will begin to turn. 

However, while everyone in attendance agreed that this is an essential step, there will still be some significant challenges for the region. With other contributory factors coming into play, including early retirees from the sector, the legacy of questions around the attractiveness of the industry, and the impact of the gig economy diverting full time equivalents away from the sector, the challenges facing the region look set to continue.  

What does the future hold?

We need to start to map, in detail, employment needs against skills provision. This will give us a baseline requirement against the skills gap challenge, providing a quantifiable basis from which to develop aligned academic content and achievement. In this way, closer industry working and cross sector support will add significant weight to the process of improvement.

It would also be beneficial for employer groups who are looking to mediate these problems to volunteer and engage with the Northern Powerhouse Programme. They should look at participating in the mapping exercises and follow up with strong employer and sector advocacy schemes. 

No one believes this issue can be resolved immediately, but a sustained approach needs to be embedded as a key part of business-as-usual planning.  In this way, a solution will begin to deliver the desired results and enable the northern economy to achieve its housing and infrastructure outputs. 

Jonathan Moore

City Executive Manchester Ask me a question
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