Matthew Fell, CBI Chief of UK Policy

@CBItweets - Action to tackle skills gaps, attract investment and improve digital infrastructure is needed to tackle pockets of low productivity.

England’s regions continue to be blighted by wide disparities in productivity and opportunity which must be tackled if levelling-up ambitions are to succeed. South West ranks fifth out of nine English regions assessed for productivity but is gaining ground.

A new study by the CBI, supported by Lloyds Banking Group, has analysed the comparative economic health of each of the country’s regions, assessing their strength in key criteria around business activity, education, employment, connectivity and social outcomes, through a series of scorecards.

The scorecards – part of the organisation’s wider Reviving Regions work – are published today (Monday), and highlight key successes, as well as the challenges which must be overcome to revive regional economies in the wake of COVID-19.

For many regions, increasing productivity is a clear priority. CBI metrics show huge variance in regional outputs, resulting in deep social inequalities, stagnant economic performance and stunted opportunity. Many of these factors have been exacerbated over the past year by the pandemic and resulting restrictions.

The data has enabled the CBI to draw up bespoke recommendations for each region which aim to enable a swift recovery and lay the foundations for sustainable future prosperity.

These recommendations call for leaders in business and government – at all levels, including newly-elected metro mayors – to work together on regional growth priorities identified in the Reviving Regions project. These include creating vibrant local labour markets, improving physical and digital infrastructure, and attracting innovative, world-class businesses to invest across the UK.      

Matthew Fell, CBI Chief of UK Policy, said:

“Economic disparities across England are sadly nothing new, but inequalities have deepened during the pandemic, and action to address the issue is now more urgent than ever.

“Building back quickly and effectively is essential, but a recovery driven only by limited pockets of productivity is far from a real recovery, and hardly the basis for a brighter future. It is therefore essential to target a recovery which ensures future prosperity reaches all corners of the country.

“Every region has strong sectors and clusters of excellence around which it can rebuild. To do that, they must have access to appropriate infrastructure, a pipeline of talent and a culture of growth and investment. 

“Government and business must therefore work together to make the necessary long-term investment in the critical structures, training, and innovation needed to support jobs and quality of life around the UK. This long-overdue levelling-up can lay the foundation for a better, greener and fairer economy for all.”

Jo Harris, one of Lloyds Banking Group’s 10 Ambassadors for the Regions and Nations, said:

“These scorecards are an incredibly useful tool for helping all of us who want to help our regions recover from the effects of the pandemic tackle the tough challenges which lie ahead. They set out where the strengths and weaknesses lie and provide a route towards addressing the specific issues as they affect each part of the country. They also shine a light on the differences within regions as well as between them, which is important in helping to drill down to where most work needs to be done.

“Most importantly of all though, they clearly demonstrate the need for everyone, private as well as public sector, to work with their communities and help them grow their way from crisis to recovery and we at Lloyds Banking Group stand ready to play our part.”

Key levelling-up priorities include:

  • Tackling skills gaps by uniting business, local government and academia to develop a future workforce for growth sectors such as advanced engineering, digital and green technologies.
  • Improving digital infrastructure through full-fibre rollout, easing pressure on physical infrastructure and accelerating decarbonisation.
  • Inspiring world class businesses to invest in the region by improving access to targeted business support and capitalising on high quality regional universities to grow R&D and low-carbon industries.

CBI data shows the South West is rated as number one out of the nine English regions for business innovation, as well as for life satisfaction among its residents – aided by low levels of unemployment and short commuting times.

However the South West is not a region without challenges – including on the key metric of productivity. Investment is needed to address patchy digital connectivity, low numbers of firms offering in-work training contributes to skills gaps, and the region rates below average for deprivation and export income.

Ben Rhodes, CBI South West Acting Director, said:

“The South West is one of England’s most vibrant and diverse regions, boasting strength across a wide range of sectors such as cyber and defence, high value manufacturing and aerospace, fintech, maritime and creative industries.

“It also has the potential to excel in industries of the future. This is a region that is well equipped to play a leading role in the UK’s push for net-zero, supported by a high-performing higher and further education sector, and regional assets such as the  UK Met Office, GCHQ and the National Composites Centre. There is much to build upon.

“Yet there remains work to do if the South West is to reach its full potential. Long overdue investment in digital and physical infrastructure is crucial, alongside action to tackle skills gaps.

“Leaders in business and at all levels of government must show the ambition and vision needed to foster a culture of growth by investing in the infrastructure, people and skills this region needs.

“Effective partnership between public and private sectors will be essential in enabling the South West to rebuild from the economic ravages of COVID-19, drive up its productivity, and lay the foundations for a better and more prosperous future for all.”

Jeremy Hayward, Lloyds Banking Group’s Ambassador for the South West of England, said:

“There is some extremely good news in the scorecards for the South West and we should capitalise on our strength in areas like business innovation and life satisfaction. These means the brightest and best from the region will be encouraged to stay, while others will be attracted by what we have to offer.

“However we cannot be complacent – there is work to do to address skills gaps in some parts of the South West and while we are gaining ground in terms of productivity, differences in output between parts of the region mean the public and private sectors must work together to make sure no communities are left behind.

“We at Lloyds Banking Group are working across the region on a range of initiatives, including virtual work experience and career taster sessions, which are designed to encourage and inspire the region’s future workforce and we will continue to find ways to play our part.”

The CBI hopes its study can help focus minds in business and government – at all levels, including the newly-elected West of England mayor – on regional growth priorities ahead of the release of its Seize The Moment economic vision next week.

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