Investing in skills to get us out of recession

Last Wednesday, I was in Llandudno giving a speech to the Colegau Cymru/Fforwm conference, the annual gathering of further education colleges of Wales.

While discussing the general state of the economy, the real message I wanted to put across was that of the importance of investment in skills and training in ensuring that we not only survive this recession, but are better prepared when we hopefully begin to emerge out of it sometime in the second half of next year.

Ironically, the very same morning when I was talking about the dangers of unemployment in Wales hitting 150,000 by the end of the year, the Joseph Rowntree Foundation was publishing a damning indictment of the regeneration policies of the successive Assembly Governments since 1999.

Essentially, the report shows that much of the economic gains experienced by the most deprived areas in Wales were built on quicksand and instead of benefiting from the funds provided, they are now experiencing unemployment and benefit claims at levels last seen during the 1990s.

This is despite spending more than £2.5 billion of funds provided by European Objective One funding and matched public and private sector contributions, as well as hundreds of millions of more of Assembly money during the last ten years

Therefore, it would seem that any of the temporary gains in employment and prosperity have been largely unsustainable, especially within the South Wales Valleys.

More critically, there has been an abject failure in dealing with any of the traditional unemployment blackspots that have blighted some local communities for decades.

For example, the claimant rate in Blaenau Gwent is the highest for any local authority in the UK and all South Wales Valley authorities have some of the highest proportion of claimants in Wales.
Perhaps the real tragedy of the report is the finding that half of those who are unemployed in Wales are below the age of 25.

Indeed, at a time when 6% of all working-age adults in 2008 were unemployed, the comparable rate for 16-24 year olds was 16%, creating a potential timebomb for the future of the communities in which they live.

Of course, at a time when we have a public sector deficit in the UK of £175bn, politicians will turn around and say that, despite the best intentions, there is no money available to invest in these areas and that everyone must feel the pain of the recession.

Given this doom-laden scenario, it is easy to forget that despite public sector cuts looming, Wales is in the extremely fortunate position of having £2 billion of European funding that is ring-fenced for the development of the Welsh economy.

I say fortunate because we have only received this money because we are one of the poorest nations in the European Union.

Of this £2 billion fund, 40%, or approximately £800 million, has been earmarked for skills development under the European Social Fund programme.

However, it has been argued that despite the programme being initiated over two years ago, very little of this has found its way to skills providers such as universities or, more relevantly for those groups of unemployed young people, further education colleges.

Indeed, the report from the last economic summit stated that not one project led by the FE sector have been approved to date. At a time when Wales is crying out for skilled workers, colleges are being frozen out of the last great opportunity to kick-start the Welsh economy.

That is clearly unacceptable at a time when the Government needs to make every effort to support our most deprived communities which are being hardest hit by the current recession.

Remember, this is not a Whitehall issue but one for us in Wales, especially when we are blessed with devolved powers for economic development, education and skills, billions of additional funding from Europe and some of the best quality further education colleges in the UK.

Indeed, I believe that despite the gloom of the Joseph Rowntree Foundation report, Wales has the potential for real recovery if only our politicians had the courage to finally make a real commitment to a significant investment in skills and education and adopt an innovative and realistic approach to our current problems.

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