Member Article

Skills drain from Lancashire sees the region lose billions of pounds each year

The Lancashire economy is potentially losing billions of pounds each year, because of skills drain out of the region, according to new research.

In a study by the Lancashire Institute for Economic and Business Research (LIEBR) at University of Central Lancashire (UCLAN) it has been found that the 800,000 commuters who work outside of the region could be taking some £4.3bn out of the economy each year.

The research, commissioned by Accrington based online value retailer, Studio.co.uk, presents a multi-faceted approach to evaluating the determinants, extent and consequences of skills drain from Lancashire.

It found that a lack of high-skilled jobs in the region could be costing the Lancashire economy £7bn each year, due to people seeking employment elsewhere.

Leaving Lancashire: An evaluation of skills drain from Lancashire, looked at the potential impact of a seven key economic factors.

The report is believed to offer the most up-to-date and clear view of skills drain from Lancashire and constitutes the only evidence available of this sort for Lancashire. It found that contributors to skills drain were:

1. Commuting out of Lancashire - £4.3bn yearly – Nearly 80,000 (1 in 7) commute to work outside of Lancashire
2. A smaller, ageing workforce - £1.2bn over the next 10 years – A diminishing workforce due to decline in population size
3. Migration outflows - £19.7m yearly – Approx 360 workers moving out of Lancashire
4. Lower productivity - £122m – 4% gap in median earnings between Lancashire and the North West might induce around 2200 workers to find jobs in better paying areas outside Lancashire
5. Skills mismatch (lack of high-level jobs) is costing £7bn annually – Approximately 130,000 are not able to find jobs matched to their higher skill level
6. Higher education students - £626m yearly – Nearly 11,500 graduate students moving out of Lancashire
7. Residents with poor perception of the area - £1.7bn – 4.6% of workers would be most dissatisfied with their neighborhood and become potential movers

Paul Kendrick, Managing Director at Studio.co.uk, commented: “To think that this region is potentially losing out on billions of pounds is very disappointing. By uncovering the true impact of this issue, we hope everyone with financial or emotional connection to Lancashire, will consider the steps they can take to minimise this drain.

“As one of the largest employers in the region, we are committed to supporting and growing the workforce as our business grows. We know that there is a wealth of smart, savvy and ambitious people in the region and we want to keep them here.

We believe it is the job of all employers to look at ways we can collaborate with business, local government, education providers and the Third Sector, to determine how we can reduce this economic drain and help Lancashire to flourish.“

Professor Philip Whyman, co-author of the report, added: “The largest contributory factor, identified by our analysis, relates to skills mismatch, as more highly skilled individuals find it difficult to find suitable employment opportunities in the local area and either commute or relocate in search of greater opportunities and/or income.

Reversing this trend will require action, by local policy makers and business leaders, to create more high skill jobs within Lancashire, through a combination of attracting high productivity firms, facilitating the growth of new industries and/or encouraging those existing SMEs with high growth (scale-up) potential.

Leadership programmes to share best practice with business leaders, the creation of high-performance clusters in new rapidly expanding areas of the economy (such as digital, healthcare IT and/or renewable energy) and creative solutions to partner local businesses with higher education institutions to enhance retention of graduates within the local economy, can all make a difference.

Skills investment is a necessary component of any growth strategy for the region, but by itself it is not sufficient without having created the kind of high skill, high performance economy that can make the most out of this enhanced skills base.“

Studio.co.uk is now calling on all MPs and businesses to act on the findings and minimise this drain.

This was posted in Bdaily's Members' News section by Chloe Smith .