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June 9, 2016updated 27 Mar 2023 3:42pm

England’s new metro mayors could transform local jobs markets

By Alastair Reed

The recent local elections saw mayors elected in Bristol, Salford and Liverpool. But only London’s new mayor, Sadiq Khan, could lay claim to anything even close to the power base of mayors in the US.

That could change this time next year, when at least nine new “metro mayors” will be elected across the country. The new kids on the block won’t quite oversee an area the size of London’s 32 boroughs. But the West Midlands’ mayor will sit above seven local authorities and cover almost 3m people; Greater Manchester, the North East and Sheffield City Region will all have mayors too.

In the murky world of devolution deals, George Osborne’s cards have at least been on the table. Agree to a metro mayor covering an area that reflects how your local economy functions and you’re in business. Don’t and you’re at the back of the queue – if you’re even in the building.

It’s this that explains why Greater Lincolnshire beat Leeds – one of the UK’s biggest cities – to a deal. Whilst other local leaders have put their differences to one side, Leeds still has three rival bids: one for Leeds City Region, one covering West Yorkshire, and one covering the whole of Greater Yorkshire. (That’s not to mention another bid nearby covering York, the East Riding and Hull.)

Khan may look on with envy: not long after taking office, the new mayors will get their slice of the £1.5bn adult education budget. Sadiq’s manifesto has called for at least the same powers to be devolved to the capital, to help link up Londoners to the jobs being created. But it remains to be seen whether he can prize this from Whitehall’s grip.

Greater Manchester’s new mayor will also be responsible for the area’s £6bn health and social care budget – that too is something Khan won’t see anytime soon. No wonder then that politicians, both local and national, are already jostling for position in the race for these powerful new jobs.

It’s not clear why London is lagging behind in the race for devolution. The city has had a metro mayor for 16 years. Perhaps lobbying for control of Whitehall budgets was not a priority for Boris Johnson – or perhaps personal rivalries with the chancellor got in the way.

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Tilting training

Local leaders have long thought they can do a better job than Whitehall civil servants in dishing out funding, for example by linking support for the unemployed with training.  

And skills shortages are the biggest barrier holding back many local economies: construction firms struggle to build houses, high-tech firms struggle to recruit people to scale-up, and manufacturers have to rely on an ever-ageing workforce of engineers.

So, armed with these big skills budgets, mayors could transform local labour markets, tilting entire training systems towards what will give people the best career prospects locally. Courses like electrical engineering add an average of £6,000 to someone’s wages after three years – and that’s just for those deemed of equal difficulty to an A-level.

At present, the adult education budget is mainly spent funding basic education at GCSE-level for those let down by the school system. It would be wrong for that to change anytime soon – but nonetheless, it’s still a big funding lever which will give metro mayors greater influence over the skills providers on their patch.

That is not to claim that we should start some kind of Soviet-style planning down to the last training place and job. The instruments are too blunt for that, and of course people move between areas. But where it is clear there is a shortage of skilled people, or where a big local investment is in the pipeline – think Crossrail 2 or Hinkley Point – we need to respond.

So what are mayors likely to do with the money? The short answer is not much unless they have a firm grasp on what training is currently on offer and what employers want.

Analysing mismatches between supply and demand locally is complex and requires a “big data” approach. It is something that the Centre for Progressive Capitalism has been working with local economies on over the last few months. Some parts of the country are better prepared than others. But worryingly a recent government review looking across the country found that “a lack of detail on demand and supply” for skills was a major issue thwarting infrastructure projects.

We’ll hear a lot from potential candidates as the competition hots up. But if their manifesto pledges aren’t to fall flat, each of the nine metro area needs to work fast to build their capacity. Let’s hope the new mayors don’t get a nasty surprise on day one.

Alastair Reed is a senior policy researcher at the Centre for Progressive Capitalism, a new cross-party think tank.

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