Improving skills and education key to boosting productivity in West Midlands, finds KPMG report

KPMG launches inaugural UK regional productivity report.

Improving skills and education across the West Midlands could be one of the main drivers to unlock productivity in the region, according to a new study by KPMG UK.

Ahead of the Chancellor of the Exchequer’s Autumn Budget, KPMG has launched its inaugural UK regional productivity report. The research assesses some of the potential causes of the UK’s overall poor productivity performance (i.e. the efficiency of production) and examines how different regions fare in each of these areas. Productivity overall plays a key part in the long term economic prosperity of the UK.

In this report, KPMG has looked at the West Midlands on three of the principle drivers of labour productivity: characteristics of businesses (e.g. the size and export propensity of regional businesses), infrastructure, and skills and education. The findings of the research highlight the following:

  • Many employers across the region have stated that one of their prime concerns for future growth is the low level of basic skills and education of their applicants. Investment in education and skills could make a substantial difference to the levels of productivity seen across the UK workforce.
  • Housing is another vital component in unlocking productivity across the West Midlands, with a need for regional infrastructure investment to be linked to housing plans.
  • The need for better digital infrastructure. The region has a lower percentage of households with internet access compared to London, with users in the West Midlands being able to access 4G connection only 52.3% of the time.

 Karl Edge, Birmingham Office Senior Partner and Midlands Regional Chairman at KPMG UK, commented on the findings:

“The West Midlands is booming, and to match the growth that our local economy is experiencing, productivity must improve. What this study finds is that improving the quality of education and increasing the overall skills level is key to unlocking the region’s true productivity potential. At the moment, there are links between employers and educational institutions, but we could make so much more of these through a wider range of routes into industry and enhanced work experience schemes.

“Housing is another crucial piece of the region’s productivity puzzle. Better links between infrastructure investment and housing planning could be game-changing, as this would improve connectivity between housing and jobs, particularly in areas like the Black Country. 

“I strongly believe that speaking with one voice on these subjects leverages great opportunities for the Midlands to be seen as an attractive place to live, visit and work. This in turn will attract new talent and give confidence to those who live and work here that we’re continuing on an upward trajectory.”

The report shows that performance of all the regions is crucial to the future success of the UK. KPMG believes that the economic impact of Brexit on national productivity is yet to be felt and a coherent and region-specific policy programme is crucial to the UK avoiding a weakened economic future. Therefore the study points out that the Budget should focus on investment in the economy’s long term future by prioritising measures that encourage improvements in productivity across all parts of the UK.

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