‘A Better Recovery for the West Midlands’

This report by the TUC was launched online on 6 July 2020 by Frances O’Grady (TUC Gen Sec), Annmarie Kilcline (Unite), Ravi Subramanian (Unison), Lee Barron (Midlands TUC Gen Sec) and Liam Byrne (Labour candidate for WM Mayor). (The GMB speaker was unable to attend.)

 It is now nearly a year old, but it is the most recent TUC report on economic recovery for the West Midlands.* What we need urgently now is an update on what actions have been taken and what progress has been achieved. We are publishing key local extracts to help see where more action and stronger policies are needed.

2.3 The impact of the pandemic

2.3.1 Key workers

The pandemic has highlighted the vital role that key workers play, and the poor pay and conditions that too many still face.

There are 507,380 key workers across the West Midlands, of whom 42 per cent are paid less than £10 an hour.

2.3.2 Workers relying on the Job Retention Scheme and Self-Employment Income Support Scheme Across the West Midlands TUC analysis estimates that around 882,100 workers, or 32 per cent of those in employment, are reliant on government schemes to support incomes during the pandemic, with many facing an uncertain future.

Birmingham

  • Claimed SEISS 32,500
  • JRS 122,800
  • Total JRS and SEISS 155,300
  • In employment on a scheme 32%

3.1 A West Midlands industrial strategy

Nationally, the TUC are calling for a recovery that:

  • charts a path towards a net-zero economy that delivers a just transition for workers across the economy
  • rebuilds the UK’s industrial capacity that will be necessary to deliver this transition, including by investing in the skills of the workforce
  • uses this programme to tackle the UK’s regional inequalities that rest on the failed deindustrialisation policies of the past.

However, regional level industrial strategies will be key to levelling up and delivering change on the ground. There are enormous strengths and opportunities in the West Midlands, manufacturing and higher education for example, which political leaders in the region can seize and build on.

To build on these opportunities and develop strong local recovery strategies, the WMCA and LEPs should:

  • develop new sectoral boards, bringing together employers, unions and other stakeholders to support productivity improvements and better jobs across key industries.

These sectoral boards would provide strategic guidance for each sector, looking at and planning for:

  • opportunities for growth
  • resilience of the sector and the key employers within it
  • local labour supply
  • development of robust supply chains in the local economy
  • education and training that enables local people to access the skills required for key sectors
  • provision of workforce development and training, pay and conditions and career progression.

There is clear potential to support the development of more high-skill, high-productivity jobs by expanding the West Midlands’s role in low-carbon technologies. The West Midlands’ strong advanced manufacturing sector and strong academic links place the region in a strong position to lead in this field.

The West Midlands’ industrial strategy should aim for 50 per cent of energy to come from renewables by 2030 and should map the potential for new technologies, areas of growth and coordinate support for workers and investment around a long-term plan for a just transition to a low-carbon economy.

The West Midlands’ industrial strategy must also include an approach to driving up productivity, pay and conditions in those parts of the local economy that play a key role in the community and employ large numbers of local people but are often characterised by low pay and poor employment standards, including social care, retail and hospitality. The TUC believes that sectoral approaches will be essential here, with new bodies that bring business, unions and Mayoral combined authorities and other local political leaders together to forge joint working on improving training, progression and productivity.

3.2 Delivering good jobs through infrastructure investment

It’s clear that infrastructure investment in the West Midlands should focus on delivering a green revolution. Therefore, support should be prioritised to employers and programmes leading the way in the march to a low-carbon regional economy.

A green revolution in the West Midlands should focus on:

  • House building.

The WMCA’s existing £350m Housing Deal aims to deliver 215,000 new homes by 2031. In order to provide a much-needed significant economic stimulus, additional funding should be sought to either increase the number of homes to be delivered by 2031 or speed up the delivery of the 215,000 homes.

The housing programme should look to provide a good mix of affordable and social housing to provide opportunity for existing residents. Crucially, the programme should lead the way in terms of green construction and become an exemplar that can act as a beacon for the rest of the UK’s house building sector.

Such an approach would demonstrate how radical green construction can work in practice and help move the industry away from the poor standards that too often plagues the house building sector. It would also equip thousands of workers with the skills and experience needed to acquire roles in the green house building of the future. The imaginative implementation of the programme could also support many of the smaller house builders in the region who, too often, are crowded out by the large house building companies.

  • Retrofitting.

In addition to the house building programme a mass programme of retrofitting should be undertaken, with priority given to social housing in the first instance.

All local authorities across the region should come together and look at how their planning policies can be updated to entrench principles that incentivise green construction and low-carbon housing.

  • Transport.

Geographically located at the heart of the UK, the West Midlands holds a strategic advantage. Yet too often the region suffers from congestion that stifles our economic potential. We must realise the potential of increased connectivity that HS2 provides and ensure rail, tram and bus provision is ramped up.

In so doing, the WMCA and local authorities should look at bus regulation in particular, and a more joined up transport network in general, to deliver greater coordination, flexibility and opportunities for residents.

A programme of investment to deliver a new suite of electric buses, battery factories and electric charging points should be undertaken, generating the quality green jobs as well as providing the fundamental infrastructure needed for the transport system of the future.

  • Broadband:

Covid-19 has shone a spotlight on the importance of high-speed broadband as a modern key infrastructure requirement and a programme of investment should be undertaken.

  • Clean energy:

We need to see the development of green energy supplies across the region and should be supported through grants and progressive planning policies. The strong manufacturing base in the region, allied to the research potential of our universities, means there is no reason why the West Midlands could not become home to a cluster of green energy companies in the future.

However, investment alone won’t guarantee that good jobs are accessible to the people who need them. The WMCA and LEPs have a crucial role to play in shaping how infrastructure is delivered to maximise good job creation and create a virtuous circle of green growth and good jobs.

The WMCA and LEPs should work with community and workforce representatives to ensure that infrastructure and regeneration is delivered in a way that meets genuine need and enhances wellbeing in those communities – not just in terms of identifying the infrastructure that meets that need but in shaping the way it is constructed and delivered in a way that maximising community benefits; consultation must be an on-going process that provides a feedback loop from communities and the workforce to the relevant delivery partners, to relevant local authorities and LEPs.

The WMCA and LEPs should also work with trade unions to ensure that every investment programme comes with an Olympics-style plan for decent jobs attached. All infrastructure projects, including house building, should include framework agreements that maximise employment and training opportunities for local people and deliver great jobs, employment standards and positive industrial relations. HS2 has been a good example of how framework agreements and social dialogue can work. The WMCA, local authorities and LEPs should learn these lessons and embed them into all future infrastructure projects such as tram extensions and significant house building programmes that are desperately needed.

3.3 Leveraging public procurement to support local economies

Public sector organisations, such as the nine universities in the West Midlands, have significant spending power. To give an indication, total public sector spending in West Midlands in 2018–19 was £74bn. This spending can be used as a powerful economic lever to stimulate and restructure the region’s economy.

The WMCA and LEPs should work with anchor institutions in the region to coordinate strategic procurement spending in support of the local economy, aiming to make the creation of great jobs and the promotion of high quality employment standards central to spending by public bodies and anchor institutions in the West Midlands.

These objectives should be a key measurable outcome and condition of the financial support co-ordinated by combined authorities, local authorities and LEPs through City Deals, the Local Growth Fund and the forthcoming Shared Prosperity Fund.

  1. Decent work and a new way of doing business

Unions have had a role to play in the WMCA since its inception in terms of promoting good quality jobs and has led to the adoption of the apprenticeship charter and the Dying to Work Charter at the WMCA. The West Midlands recovery strategy should build on these steps and seek to embed social partnership into all areas of work and use its civic leadership role to encourage the wider adoption of collaboration across all sectors of the economy.

4.1 Promoting great jobs through public procurement

Just as public procurement can be a valuable lever for creating jobs in the region, so it can also be used to drive up job quality.

To maximise the potential of procurement to drive up job quality across the West Midlands, the WMCA and LEPs should:

  • work with commissioners and decision makers across the public sector – including the health service and local government – to promote, implement and monitor a more dynamic approach to social value procurement in support of great jobs and inclusive growth, including best practice from devolved governments in Wales and Scotland; as outlined above this could support the development of the green revolution, the ceramics industry and the extension of progressive employment standards across our region as examples.

This will involve the use of voluntary agreements and charters, including employment charters, to promote high quality service delivery, decent employment standards and to protect against exploitation of the outsourced workforce and supply chain.

4.2 Worker voice

Worker voice must be embedded in any recovery plan, whether through the promotion of collective bargaining at a workplace level, sectoral agreements or using a social partnership model to ensure equal voice between government, workers and employers.

Collective bargaining delivers at a workplace level. Workers in unionised workplaces have better pay, more training, better work-life balance policies, better pensions, and are less likely to leave their job.

But more and more evidence shows that collective bargaining also delivers for workers across the economy too – particularly when workers can bargain with employers to set standards across a whole industry or sector. The OECD has published evidence showing that collective bargaining can help tackle inequality, boost business productivity, and help groups who are discriminated against in the labour market get and keep jobs. It also says collective bargaining is at the heart of how governments can deliver better work.

To embed this kind of good practice and increase workers’ voice in the long term, the WMCA and LEPs should:

  • set a headline aim to increase employee and trade union engagement, explaining the benefits that this can bring for productivity, and use commissioning, procurement and the allocation of specific funding streams to require evidence of effective workforce engagement
  • build employee, worker and trade union engagement by promoting the value of social partnership through collective bargaining and workforce voice in strategic decisionmaking; this could take the form of establishing greater information and consultation mechanisms with recognised trade unions or through other forms of employee engagement in non-unionised workplaces; the WMCA and local authorities should work with LEPs to jointly promote this as a core objective of the recovery strategy
  • build on the experience of Greater Manchester, Liverpool City Region and other areas, in developing structures and mechanisms for engaging trade unions and other stakeholders in the heart of regional decision-making and economic strategy.

4.3 Equality at work

The impact of Covid-19 has had a clear disproportionate impact on certain groups. BME communities have been hit more severely by the virus than other groups, in part because they are more likely to work in frontline jobs that expose them to the virus. There are also reports that the economic impact of the virus has so far been worse for women, with paid hours of work falling more for women than men and more women dropping out of the workforce, something likely related to women bearing a greater share of caring responsibilities.

Immediate steps must be taken to address the adverse impact on people with protected characteristics and to tackle discrimination and disadvantage in the longer term. This is crucial to making sure that inequalities are not increased and entrenched by the expected economic downturn.

There is also much that can and should be done by the WMCA, LEPs and local authorities. The WMCA should use its procurement and leadership powers and policy levers such as employment charters and the public sector equality duty to enact the following recommendations and encourage employers to adopt them:

  • Employers with 50 employees or more should be encouraged to report on their gender, disability and BME pay gaps, and develop an action plan to reduce them; employers with 250 or more employees, who are legally required to report their gender pay gap figures, should be encouraged to develop time bound and target driven action plans informed by detailed monitoring.
  • All employers in the area should be encouraged to carry out regular pay audits for a better understanding of how to address the root causes of pay inequalities in their organisation.
  • There should be adequate funding for specialist domestic violence services and centres where government cuts have significantly reduced provision and access in the area.
  • The partial devolution of some skills funding should be used to ensure apprenticeships and routes into jobs and training are designed and delivered in a way that is truly accessible to the most underrepresented groups (e.g. women, BME workers, disabled workers).
  • Mechanisms should be built in that ensure wider consultation of stakeholders who bring in underrepresented group such as women, BME people, disabled people and LGBT+ people in a local area to ensure diversity of views and accountability, so local policy isn’t decided behind closed doors.
  • Employers must be encouraged to promote and adopt a zero-tolerance approach to sexual harassment and other forms of discrimination, including developing clear disciplinary procedures, in partnership with trade unions.
  • Employers should ensure their equality policies are inclusive of lesbian, gay, bisexual and trans (LGBT) workers.
  • Employers should consult with their disabled staff and their trade unions on the best way to remove barriers and address the disability employment and pay gaps. Employers should also consult and work closely with recognised trade unions.
  • Employers should be helped to better understand their Equality Act obligations, and to put in place reasonable adjustments for disabled workers. This should include adopting the TUC’s model Reasonable Adjustments Disability Passport to ensure their disabled workers adjustments are maintained through times of change.
  1. Meeting the skills challenge

Regional and local responsibility for skills provision means that the WMCA and LEPs have an opportunity to drive change in skills provision in the region. They should:

  • use procurement and advocacy and soft powers to ensure that the recovery strategy has a core aim of driving up employer engagement in training, with a view to increasing:

– the number of employers providing workplace training

– engagement with unions on the learning and skills agenda, including the use of workplace learning agreements negotiated with relevant trade unions – the number of employees provided with time off to train

  • ensure local skills strategies are aligned with infrastructure and investment decisions – the WMCA, local authorities and LEPs should develop retraining opportunities for all workers as well as expanding quality apprenticeships across the region whilst exploring how to guarantee access to apprenticeships to workers both from economically vulnerable and underrepresented groups.
  • develop a local job guarantee scheme to prevent a generation of workers being scarred by long term unemployment. The local job scheme should offer:

– secure contracts of at least six months

– pay at least the real living wage

– provide training opportunities to help people move into longer-term work

– guarantee access to trade union representation

– contribute to wider community benefits

– be additional jobs that would not otherwise be created by employers.

To ensure these conditions are met a working group involving businesses, unions, HE, FE and third sector social partners from should be created to oversee the implementation of the programme.

The WMCA and LEPs should also:

  • secure employment and training opportunities for local communities through intelligent procurement and framework agreements such as those used for the London Olympics and HS2, including making sure that apprenticeships and other training opportunities are established across supply chains.

The WMCA has signed the TUC Apprenticeship Charter and should now work with LEPs, business groups and other stakeholders in taking this further by engaging employers to ensure every apprenticeship has purpose, is paid fairly, with high-quality learning and training elements and access to trade unions.

Too often the agencies involved in the skills agenda are disparate and it is confusing for working people to navigate meaning many people don’t access the support presently available. The WMCA should look again at skills provision and ensure access is easy to understand for working people. This should also be supported through additional investment to ensure that professionals in this field are able to provide individual, tailored and ongoing support as opposed to generic ‘off the shelf’ advice.

Colleges across the West Midlands support over 250,000 students from across the region’s constituencies, including 74,000 young people, 145,000 adults and 27,000 apprentices, and support the productivity of over 12,000 employers, many in the region’s priority sectors. As such, the WMCA, LEPs and local authorities can play an important role in ensuring that further education (FE) colleges are at the centre of serving the needs of the regional economy.

Colleges West Midlands (CWM) is the formal partnership of all 21 further education colleges situated in, and adjacent to, the West Midlands Combined Authority area and are ideally placed to work strategically with the WMCA to meet the skills challenge. CWM has calculated that investment of some £636m is required over the next five years to provide the infrastructure needed to deliver against the existing regional skills plan and national education priorities. £471m is needed to ensure the FE estate is of a good or better standard, £89m would fund development of new facilities and resources for advanced and higher skills and £75m would secure essential digital capacity and capability.

  1. Rebuilding public services

While issues such as pay and funding will require action by national government, regional and local authorities can take important steps to improve the resilience and quality of public services by:

  • adopting a policy of all service provision being publicly managed ‘in-house’ by default in all public sector organisations, only outsourcing where there is a strong public interest for doing so
  • reviewing existing contracts with a view to renegotiating and/or terminating such contracts where this is demonstrably in the public interest
  • basing all commissioning decisions on a public interest test, with clear, measurable “make or buy” criteria to ensure the delivery mechanism chosen best promotes:

– a public service ethos

– accountability to service users and elected representatives

– value for money in the round

– quality service standards

– long-term sustainability of the service

– high-quality employment conditions, pay and pensions

– integration of services.

Where there is a public interest case for going to the market, a social value procurement strategy should be put in place across all public sector bodies in the West Midlands and voluntary agreements and charters, promoted by trade unions and others, used to promote high quality service delivery and decent employment standards.

————-

* apart from ‘Freelancers and the cultural recovery out of Covid-19 in the West Midlands’, a report by the TUC Midlands Cultural & Leisure Industries Committee, comprised of Equity, Musicians’ Union and BECTU (A Sector Of Prospect), 17 December 2020.

You can read the full 24 page report here: https://www.tuc.org.uk/research-analysis/reports/better-recovery-west-midlands

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