The Competitive Economic Performance of English Cities

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The Competitive Economic Performance of English Cities48.0 per cent in 2004. While the English average also increased during the sameperiod, improvements in Derby have been more marked, with a rise in theranking from 31st to 21st out of 56. Similarly, there have also beenimprovements in the ranking on the education domain of the Index of MultipleDeprivation (IMD), from 31st in 1998–1999 to 26th in 2001. However, boththese indicators suggest that the city could do better in terms of educationalattainment.4.4.33 In terms of the skills of the adult population however, Derby is performing well,with an increase in the percentage of the adult population with degree levelqualifications from 9.8 per cent in 1981 to 13.2 per cent in 1991 and up again to18.9 per cent in 2001. Although the 2001 figure is just below the English average(of 19.9 per cent), Derby ranks a respectable 15th in terms of performancerelative to the other 56 cities in this research, suggesting a relatively high-qualityresident workforce. This is despite the fact that the percentage of HE/FEstudents in the adult population is relatively low, at 6.9 per cent in 2001 (27thout of 56), compared to an English average of 7.3 per cent. Similarly, thepercentage of 17 year olds in full-time education is relatively low, at 52 per centin 2001 (41st out of 56), compared with 58 per cent nationally. Again, theseindicators suggest that the city could do better in encouraging post-16 and post-18 year olds to stay on in higher education. The percentage of the adultpopulation (16–74) with no qualifications (30.5 per cent) is also higher than theEnglish average (28.9 per cent), giving a ranked position of 28th out of 56.Thus, although the overall picture on human capital in Derby is encouraging,there are still some concerns and challenges related to the attainment and skillsof the workforce.Factors affecting human capital4.4.34 The views of respondents confirmed the positive aspects of human capital inDerby, in particular the relatively high proportion of graduates in the workforce.There is a high level of engineering skills in the city, but there are also arelatively high proportion of graduates in the public sector such as in the healthservice and the local authority. Major employers cite a good skills base (andsupply base) as key reasons for investing in Derby. However, although there areover 11,000 students in the city, low graduate retention rates were also cited asa concern, with the city losing out on two counts: school leavers tend to moveaway to study, and don’t return when they graduate, and graduates from DerbyUniversity tend to move elsewhere to take up their first job. There is no stronglocal tradition of employers working with Derby University to establish links andpartnerships (a force for continuity) that might help to address this issue.4.4.35 The largest private sector employer in Derby is Rolls Royce with around 7,000employees, with a mix of grades and functions. However, even at Rolls Royce,there is a move away from manufacturing per se (i.e. blue collar work), tohigher value-added elements such as design, R&D, administration and HQfunctions. At the higher end of the skills continuum, Rolls Royce runs a globalrecruitment campaign taking on approximately 200 graduates a year fromaround the world. At the lower skill levels, the company draws on the locallabour market, working in partnership with Derby College to tap into their180
The Competitive Economic Performance of English Citiessupply of engineering skills (diploma, BTEC, HND and NVQ). Rolls Royce itselfinvests heavily in workforce development, around £30 million a year,approximately a third of which is spent in Derby, in pursuit of its up-skillingpolicy (a force for change and upgrading in the urban economy).4.4.36 The private sector high performance engineering companies within Derby workclosely together, as they recognise that the supply of high-skilled labour iscrucial for their businesses. However in harder times, when forward orderbooks look emptier, many companies are tempted to lay off employees to savecosts. For example, in the light of 9/11, orders for aircraft engines plummeted,and Rolls Royce was faced with the decision to cut large numbers of itsworkforce. Although the company laid-off 20 per cent of its workforce in Derby,it also realised that with a quality workforce that had been trained to a highstandard in-house, that it was important to try and keep contact with redundantworkers. Rolls Royce therefore set up a partnership with Toyota, as it recognisedthat the basic skills were generic between the two companies. As members ofthe Midlands Engineering Industry Redeployment Group (MEIRG) which wasset up in 2003, the two companies created a skill sharing scheme, with the aimof keeping the skilled workforce in related employment in Derby. Businessesrecognise the importance of being able to access a supply of high-skilled labour,and given the related industries and transferable generic skills, have developedthis scheme to share their workforce in pan-business redeployment, to ride theinevitable peaks and troughs that hit the industry. This new institutional form(MEIRG), developed due to changes in markets and the competitiveenvironment, appears to be an effective way of responding to shifts in globalconditions, supporting flexibility in the labour force that should help to avoidlock-in and inertia in the urban economy.4.4.37 The recently completed City Growth Strategy identifies skills shortages as anissue for local businesses, particularly in the manufacturing and engineeringcluster, and it was recognised by some respondents that this could also be aproblem in the future, particularly if any of the major employers introduce aprogramme of redundancies. It was felt by some that there has been an elementof complacency that has slipped into employers’ attitudes, with the perceptionof a workforce that is adaptable, and the current low unemployment ratesbringing a false sense of security (a force for continuity). However, this situationcould quickly change, as Birmingham, Coventry and Liverpool’s recentexperience with local car plants has demonstrated, and there are thereforeconcerns about skills deficits in the future that could lead to lock-in.4.4.38 There was awareness that the skills of the unemployed need to be tailored tomeet changing demands in the labour market. The development of the newshopping centre in Derby is anticipated to offer up to 3,000 new employmentopportunities in the retail sector, an area that is being targeted in the local skillsprogramme Supporting Derby, developed by Job Centre Plus, the Learning andSkills Council, the City Council and Derby City Partnership. There is thereforecertainly an understanding of the changing needs of the local labour market,and a realisation of the need to adapt skills to meet shifting demand. This needsto be put into practice successfully to promote upgrading of the urbaneconomy.181
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State of the English CitiesThe Comp
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The Competitive Economic Performanc
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Executive summary1. What is the con
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Chapter 1. IntroductionSummaryFor t
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Chapter 4. Responses to change: con
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