Andy Street: Our experience in the West Midlands shows how skills drive economic success

7 Oct

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

Covid-19 has hit the West Midlands hard. Livelihoods and life chances have been impacted by a pandemic that stopped our economy in its tracks – but we are determined to do what we can locally to get people back into work. Improving the skills of our people will be vital if we are to fill the new jobs we create.

The Conservatives have always been the party of opportunity – encouraging ambition and social mobility. We must return to that guiding principle and drive a revolution in skills and training to rebuild our economy.

I was encouraged last week when the Prime Minister put skills front and centre of the Government’s agenda, with a commitment to provide free courses for those without A-level or equivalent qualification. This commitment came alongside a package of other measures, including expanding the “digital bootcamp” concept pioneered here.

In the West Midlands, we know how improving skills can help build a strong economy. Before the pandemic struck, our economy was growing faster than any other part of the UK other than London. We had record jobs numbers and were setting records for housebuilding and productivity.

A significant part of this economic success was down to improving skill levels. Much work has been done to turn around a skills gap that, in 2007, branded us the worst qualified UK region. Back then, a fifth of young people here left school with no qualifications at all.

When I became Mayor of the West Midlands, this was an unacceptable situation I was determined to put right. As the work of the Social Mobility Commission has shown, an individual’s skills determine their long-term social mobility. What’s more, poor skill levels can lock families into disadvantage for generations. As someone who grew up here, this issue gnawed at me. I have tried to provide business-like leadership to tackle the problem head-on and deliver real results.

Our seven member boroughs of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton have worked together to address the skills issues we faced. While we still face challenges, the improvement has been marked.

By last year, more than 50 per cent of local people were qualified at level three. In the Black Country, where the gap had been the most pronounced, more residents are now educated to degree level or above than ever before. The percentage of people with no qualification continues to reduce.

As we work to create new opportunities and jobs in the wake of the pandemic, the UK must take a similar approach. Because as the economy resets, those new jobs will emerge – and they will often have new requirements in terms of skills.

Our digital bootcamp, now backed by a further £1.5 million of funding, provides twenty-first century skills for thousands of people. Launched in September, the free to all ‘School of Code’ bootcamp is full-time and takes a learner from novice to software developer in just 16 weeks – before helping them find their first role in tech.

In a similar way, we are determined to ensure local people have the skills to benefit from jobs created by major investments like HS2 and the Commonwealth Games. We have set up our “Construction Gateway” which is training people to build the transport infrastructure and homes needed for our region’s future. The Gateway provides recognised qualifications and work experience to join the construction workforce as we Build Back Better.

One of the most notable successes of the West Midlands’ skills resurgence has been apprenticeships. Here, we use unspent apprenticeship levy from big businesses like HSBC, Lloyds Bank and Enterprise Car Hire to fund apprentices at smaller businesses. This unique arrangement means instead of unspent levy disappearing back to London it stays in the West Midlands, growing businesses and helping them ‘skill up’ local people.

Young people are among the hardest hit by the economic effects of Covid-19, which is why we are also launching six youth hubs, working with the Department for Education and the Department for Work and Pensions to link employment and training services to make sure they target young people. In just a few weeks, the first job placements for 16 to 24 year olds under the Kickstart Scheme are likely to begin. Kickstart, and our hubs, can provide direct and tangible help, providing work and teaching skills.

Of course, to deliver these skills, we need a properly equipped higher and further education sector. While our colleges have been backed by guaranteed funding throughout the pandemic, we have also pressed ahead with developments like the Institute of Technology in Dudley and Wolverhampton’s National Brownfield Institute.

Funding of almost £12 million will start to rejuvenate our existing college buildings too – but this represents only the first down payment of the five-year £1.5 billion capital investment announced by Gavin Williamson in March. I will be lobbying to ensure the West Midlands gets its share of this vital funding.

While our colleges work brilliantly together – and have been at their responsive best throughout the pandemic – the West Midlands is also lucky to have a remarkable higher education sector. Behind almost every economic success story lies one of our universities, which lead the way in all kinds of emerging sectors, from electric vehicles to life sciences. They will play their part too.

And, as we invest in the bricks and mortar of training and education, we are also embracing the lessons of lockdown – and the growing importance of online learning. We’ve teamed up with provider Coursera to offer 3,800 online courses, offering top class skills and qualifications to anyone who is unemployed, recently made redundant or furloughed.

The West Midlands Combined Authority has owned the devolved Adult Education Budget, ensuring every pound delivers more qualifications that employers actually want. Now we need to see more of these funds devolved. We have shown what we can do.

These are just some of the ideas that helped turn the West Midlands from the worst qualified area in the UK to the nation’s fastest-growing regional economy. When I was 18, this was a place that talented young adults often felt they needed to leave to realise their potential. Now, well qualified individuals want to move here. We are proof that better skills drive economic success.

Our focus, right now, must be on driving down the infection rate to defeat Covid-19. But as we plot our economic recovery, we must show we are the party of opportunity, and provide people with the skills needed to rebuild our economic fortunes.

Richard Walton: The Government must act to prevent Coronavirus fraud

12 Jul

Richard Walton is a Senior Fellow at Policy Exchange and a former Head of Counter-Terrorism Command of the Metropolitan Police.

In normal times, the NHS loses £1.27 billion a year to fraud, which is the equivalent of fulfilling the Conservative Party’s manifesto pledge of employing an additional 50,000 nurses. New research by Policy Exchange in a paper entitled Daylight Robbery – Uncovering the true cost of public sector fraud in the age of COVID-19 has found that fraud and error during the Coronavirus crisis will cost the Government an eye-watering sum about three and half times that – in the region of £4.6 billion.

Fraud is only exacerbated in a crisis, such as the pandemic we are facing now. It has been well documented that disasters are a magnet for fraud, as crisis management involves an outpouring of government aid, typically accompanied by low levels of due diligence to allow funds to reach recipients quickly.

In a foreword to the report, David Blunkett warns that criminals will use the Covid-19 crisis to “dip below the radar in order to be able to take advantage of unusual and unforeseen circumstances, and bank on attention and resources being focused elsewhere”.

Detecting and preventing fraud is a key element of sound public finances, and should therefore be a priority for this Government. It is not reasonable to expect the public to hand over a share of their income month after month if it’s not responsibly managed. Considering the pressure that will emerge after the Coronavirus crisis to keep costs down, reducing fraud will be one of the most equitable and achievable options available and will help the Government to achieve other objectives, such as levelling up the UK economy.

Unlike Covid-19, there is a dangerous perception that fraud does not have much impact on victims. There is a particular tendency to see public sector fraud – fraud committed against the government – as a crime that doesn’t affect ordinary people.

This is wrong. It affects the future of children when income tax is diverted from their education and is funnelled towards organised crime networks. It affects the most vulnerable in our society when they have to wait longer to receive benefits, because the Department of Work and Pensions is busy filtering through the almost one in five Universal Credit applications that are fraudulent.  It can even result in substandard treatments from an NHS doctor who lied about his qualifications on his CV. The Government believes that fraud and error cost the taxpayer anywhere between £2.8 billion and £22.6 billion in 2017-18 alone. This level of fraud is damaging to the fabric of society and cannot be allowed to continue.

While the Chancellor’s rapid action to save the economy has been a welcome necessity, the generosity and speed with which support schemes were introduced has left them open to exploitation by fraudsters. Furthermore, the increased use of third parties and digital channels have raised the opportunities for fraudsters to infiltrate the system.

For example, the speed with which Bounce Back Loans are approved (82 per cent of loans approved compared to 50 per cent for the Coronavirus Business Interruption Loan Scheme), and the potential to make multiple applications poses a particular fraud risk, which is compounded by the poor quality of Companies House data.

When face-to-face assessments for Universal Credit (UC) were suspended in July 2018, there was an almost 15,000 jump in the number of monthly referrals of suspected advances fraud over the course of the following year, costing up to £150 million. We can therefore expect the decision to suspend face-to-face assessments again due to Covid-19 to have a similar effect.

The Government has implemented a range of measures to try and tackle this, with the Cabinet Office forming a Covid-19 Counter Fraud Response Team and the NHS Counter Fraud Authority, the Home Office and the National Cyber Security Centre offering advice.

Nevertheless, over the course of the Coronavirus crisis, HMRC has already received 1,800 reports of furlough fraud and the NHS has been subject to numerous PPE scams. Last week, the HMRC Fraud investigation team arrested an individual in the Solihull area as part of an investigation into a suspected £495,000 fraud of the Coronavirus Job Retention Scheme.

The issue of tackling fraud is compounded by the difficulty of detecting it, and the complex nature of recording and reporting it. According to the Crime Survey for England and Wales, almost two thirds of fraud goes unreported, and the Government believes that it is currently detecting less than two per cent of public sector fraud. The services available to report fraud are linked to a complex web of organisations, which must be streamlined to become more effective. Even when fraud is eventually detected, it is underreported as unwittingly complicit employees fear the stigma around fraud, while government departments are wary of the negative media attention it attracts.

Fighting fraud effectively is expensive, but it is imperative that the Government continues to invest in this field, regardless of other fiscal pressures. It will be essential that the Government conducts thorough post event assurance in the wake of this crisis, a process that should be overseen by a new ‘Covid-19 Economic Crime Hub’, run by the National Economic Crime Centre, with a Minister for Economic Crime appointed and accountable for the outcomes.

According to Sajid Javid, who also backed the report, “now is a good time to join up counter fraud measures to keep it to an absolute minimum”. Technology will play a critical role in enabling investigators to operate at a sufficient scale and the Government must make use of the latest innovations in anti-fraud technologies, while ensuring the Covid-19 Economic Crime Hub has access to cross-government data.

Looking beyond the pandemic, it will be vital that the Government learns the lessons from this crisis, which has exposed weaknesses in the UK’s digital infrastructure. In particular, the limitations of public sector identity assurance systems has enabled fraud at a larger scale than necessary.

The Government should therefore accelerate the creation of digital identity solutions, such as the Departmet of Work and Pensions Confirm My Identity scheme. Furthermore, the use of AI and Document Review Technologies, which are the most promising counter-fraud measures available, should be encouraged. In one Serious Fraud Office case, these saved 80 per cent of the costs and time required for an investigation, which settled for £671 million.

However, these programmes rely on high-quality data to operate effectively and their success will also be dependent on improved public and private sector data-sharing practices. The constantly evolving nature of fraud will require continuous investment and commitment from the Government to fighting it.

Chris Greany, a former UK National Police Coordinator for Counter Fraud & Economic Crime described to Policy Exchange the scale of the challenge of public sector fraud as needing a joined up effort with “real bite”  to “recoup lost funds, prevent further crime and deter others from this unlawful and immoral behaviour”. The Government will need to act quickly to prevent fraud scandals emerging from the embers of the Coronavirus crisis.