GuildHE welcomed the opportunity to respond to the UK government’s consultation for ‘Invest 2035: the UK’s modern industrial strategy’

We focused on evidencing the strong capabilities of specialist and vocational higher education providers to enable higher productivity in all eight high-growth sectors through the development of high-level skills and collaboration with businesses. 

We also highlighted the need for a regional approach that considers socioeconomic gaps, in addition to the measures proposed in the paper, to support high-growth sectors. The Industrial Strategy must drive equality of opportunity and recognise the strength of smaller-scale partnerships between small and medium sized enterprises (SMEs) and higher education providers. Read our full response to the consultation.

Our key recommendations for the development of the Industrial Strategy are: 

• Prioritise collaboration between specialist and vocational institutions and employers to boost regional skills and innovation – Vocational and specialist institutions, especially those serving high-growth sectors and training in-demand occupations, should be incentivised and supported to collaborate with businesses, colleges and local public services with a flexible apprenticeship levy and central involvement in the development of Local Growth Plans. Collaborations with SMEs should also be incentivised through the innovation funding system.

• Prioritise boosting creative clusters outside of London and the South East, including in rural and coastal settings – Creative industries, and the interventions they offer that have potential to be commercialised for tourism, are associated with higher living standards, population growth and equity according to research by the Creative Policy and Evidence Centre. We recommend that the Industrial Strategy has a clear focus on boosting creative clusters in the North of England as well as the Midlands and South West. This should also include rural settings, not just cities and urban areas. This will stimulate foreign direct investment (FDI) and other investment, as demonstrated in London, for UK regions and expand opportunities.

• Commission a review of innovation funding to identify strategic gaps where growth is currently constrained through formula funding – Current funding for innovation (HEIF) does not recognise or reward many specialist, vocational and technical institutions due to a bias towards large scale research in the formula. This means opportunity is unequally spread, limiting regional impact and constraining the potential to scale up excellent innovations.

• The Industrial Strategy must inform Skills England activity and vice versa. This insight into future occupations, skills and growth sectors should have cross-departmental influence – The first report from Skills England identified that education, healthcare and construction were top occupations in demand. The Industrial Strategy does not identify either of these sectors to focus on growth. This highlights the gap between sectors with high-growth potential and those in the most need. The decision to defund Level 7 apprenticeships, which many NHS, teaching and construction learners undertake, is a missed opportunity for joined-up policymaking and one that will undermine the Industrial Strategy’s ambition to support wider economic growth.

• Ensure growth plans in the Industrial Strategy are geographically inclusive to effectively meet ambitions to drive up living standards, economic stability and security – The Industrial Strategy should amend its methodology to include an assessment of regional inequities, skills gaps and low living standards in addition to its proposed measures to identify priorities. Whilst we agree that identifying high-growth potential through concentrations of employment, high outputs, productivity and innovation is a logical and acceptable methodology, it is important that the strategy realises the risks that a sole focus on established success poses to increasing the wealth and prosperity gap between urban areas and rural regions.

Drawing from examples of good practice across our membership in driving skills development, innovation, partnership and organisational resilience in our submission, we call for a coherent and regionally inclusive approach to growth. Impactful regional growth is essential to the national effort for economic growth with specialist and vocational training, skills and innovation at the forefront.

Dana Gamble, Policy Manager (Skills, Innovation and International), GuildHE