Greg Clark MP: City Deals - delivering the skills that employers need

Greg Clark is the Financial Secretary to the Treasury and MP for Tunbridge Wells. Most Tuesdays he will be writing this new 'Letter from a Treasury Minister' for ConservativeHome readers. Follow Greg on Twitter.

Last week I escaped the confines of Westminster to meet with business and city leaders in Liverpool, Hull, Stoke-on-Trent, Wolverhampton and Coventry. The main topic of discussion was the City Deals programme, which is all about decentralising resources and responsibilities from Whitehall to local communities.

The idea of the City Deals is that economic policy should have a dimension that reflects the different strengths and opportunities of different parts of the nation – and a big part of making sure that happens is to empower local decision makers.

In a country like Britain, where so much economic and political power is concentrated in one city, the London establishment often overlook the local factors that matter so much to our other great cities. 

This was certainly something I was reminded of last week. 

In all the meetings I had and places I went to see, I was struck by how often employers mentioned skills shortages in their particular locality as one of their most important worries over the long-term.

It is therefore no wonder that for the eight City Deals already in place and the twenty cities bidding to be part of the second wave, developing a closer link between the skills that growing employers need and those available locally is a consistently high priority. 

This week, I’ve been in Berlin and Frankfurt, along with a number of other UK ministers. A key issue in the discussions I’ve had with employers and policy makers over there is Germany’s record on technical and vocational education. It is a key strength which ensured that the German rate of youth unemployment stayed low even through the financial crisis. 

The story was very different in Britain. Even before 2008, the numbers were already rising and rose even faster once the crisis hit.

Despite the worst of legacies, British youth unemployment is now falling. Nevertheless, to sustain progress over the long-term we must become as successful in preparing young people for the world of work as the Germans have been. Michael Gove’s farsighted, far-reaching reforms to our schools are foundational to this goal. The expansion of apprenticeships achieved by John Hayes, and being continued under Matt Hancock, represents another big step forward. 

A lot has already been achieved, in the most challenging of circumstances. This stands in contrast to how little was achieved by Labour. With all the resources and all the power they needed they could have implemented the education and training reforms that would have helped young Britons to weather the economic storms as successfully as young Germans did. 

Making up for this lost opportunity means ensuring that, alongside the right national policies, there is the local action to deliver the skills that employers need in order to grow. That is exactly what the City Deals are designed to achieve.