The National Assembly for Wales’ Economy, Infrastructure and Skills Committee is today calling for the Welsh Government to empower Regional Skills Partnerships (RSPs) to work more closely with Small to Medium size Enterprises (SMEs) to help tackle ‘low skills traps’, which it says leads to low pay and low productivity.
RSPs are responsible for analysing the economy and likely growth areas to identify the skills needed in the Welsh workforce. With influence over almost £400 million of funding for training services, they can make recommendations that can impact on tens of thousands of learners and employers. The Committee carried out an inquiry to look at these partnerships because of their increasingly central role in Welsh Government education and economic policy.
Today’s Committee report includes recommendations to clarify the role of RSPs and improve their focus on low-skills traps. It also outlines how establishing deeper partnerships with universities and apprenticeship providers will empower RSPs in their key role of advising the Welsh Government on reducing skills shortages and stimulating employer demand for highly skilled jobs. As part of making their role clearer, the Committee recommends that RSPs be renamed Regional Skills Advisory Boards (RSABs).
Low skills traps
Parts of the Welsh economy suffer from low skills traps, stalled by a cycle of low employer demand for higher skills and a low-skilled workforce that has little incentive to upskill. The result are low pay and low productivity. The Committee believes that the challenges for Wales are not just in increasing the average qualification level of the population and meeting immediate skills needs, but also in stimulating employer demand for higher level skills. The Committee is recommending that the new RSABs should have a clear focus on low-skills traps.
Engaging small businesses
Working with all types of employers is essential to understanding their skills needs and stimulating demand for more highly skilled workforces. As part of their inquiry, the Committee heard evidence from experts explaining that much current RSP employer engagement ends up focused on large businesses and organisations that have the staff and time to attend their meetings. However, the Welsh economy is dominated by small to mid-size enterprises (SMEs) and the Committee heard concerns that their voices are not being heard.
Engaging with the many small businesses across Wales is a considerable challenge, but the Committee believes that the Welsh Government should leverage its £132 million apprenticeship provider network, and the networks own extensive employer and SME contacts to help the new RSABs better understand regional skills needs and reduce skills shortages.
Russell George AM, chair of the Economy Infrastructure and Skills Committee said:
“Low skills traps are a blight on the lives of people in Wales, blocking progress and stifling innovation. Despite increasing average qualification levels in Wales we heard that parts of the economy continue to experience ‘low skills traps’ where employers don’t need or value higher level skills; this in turn hinders progress and doesn’t create the incentives needed for employers to invest in a highly-skilled workforce. The result is a vicious circle, meaning our economy stalls and people are trapped in low income jobs.
“Regional Skills Partnerships make recommendations that influence how taxpayer’s money is spent, aimed at upskilling our workforce. They must work to tackle low skills traps and be better supported in engaging with the small and medium sized business that provide the bulk of jobs in Wales. We must get the basics right and hear their voices, and work with them to break low-skills traps.
“For us to move the economy forward our workforce must be equipped and ready for what employers need, and in turn employers should also be encouraged and supported to create highly-skilled and highly paid jobs. It’s a challenge that the Welsh Government and the new Regional Skills Advisory Boards must meet.”
Ben Cottam, FSB Wales Head of External Affairs, said:
“We welcome the committee report on Regional Skills Partnerships, particularly regarding the emphasis on proper engagement between RSPs and Wales’ SMEs.
“In FSB Wales’ evidence to the Economy, Infrastructure and Skills Committee earlier this year, we recommended that RSPs would benefit from having a clarified role, and to hold more consultation events with SMEs in their regions to help them understand how they can directly influence skills provision. This would help RSPs become more accessible to SMEs, although it is important to bear in mind that RSPs must be properly resourced for this be effective.
“We have an opportunity to really open up RSPs to small firms in Wales, to tackle low-skills traps and to deliver on regional economic development which in turn will boost pay and productivity.”