University of Gloucestershire invites debate on County’s productivity
16th September 2019
Over 20 representatives from local organisations including GFirst LEP, NHS Trust, QuoLux, Hazlewoods, Gloucester Quays and Creed Foodservice gathered to take part in a wide-ranging debate, examining why Gloucestershire has an estimated 6.4% below UK average productivity rate and is expecting a shortfall of 48,000 unfilled jobs within 20 years’ time.
The University of Gloucestershire’s School of Business and Technology has hosted a special conference for private and public sector leaders from across the County, who were invited to join academics to discuss challenges and future solutions for entrepreneurial growth in Gloucestershire.
A lack of affordable housing, planning red tape, weak school education, poor business leadership, outdated recruitment practices and a view of Gloucestershire as a rural haven which proves unattractive to young employees were all issues identified in a discussion that asked ‘what next?’
A UK productivity lag
Welcoming guests, Malcolm Prowle, Professor of Performance Management at the University’s Centre for Innovation and Productivity, introduced the discussion by outlining the productivity challenges facing Gloucestershire.
“There is a lot of confusion about what productivity actually is,” he said.
“In short, for any production process, the definition of productivity is outputs, or an organisation’s products or services, divided by inputs, which could be things like labour, plants and equipment, or buildings and space.
“Unfortunately, productivity is an area where the UK is having a major problem and in the business world, this is seen as being probably our biggest economic challenge.
“Government figures show the UK has the biggest productivity gap when measured against other leading western economies, dating back to when modern records began in the early 1990s.
“In 2014 output per hour in the UK was 18 points below the average when compared to the other six members of the G7 group of industrial nations. This gap has shown a marked deterioration since the 2007-9 financial crisis.
“More recent figures indicate that while the UK has narrowed the productivity gap against other developed nations, it still lags well behind the USA, Germany and France.”
More for less
“We measure productivity in many different ways, from counting activity such as operations or outpatient clinic attendances, through to considering less tangible outputs such as patient experience and health outcomes,” explained Deborah Lee, CEO of Gloucestershire NHS Trust which, with a £520m turnover and over 8,000 staff, is Gloucestershire’s largest employer.
“The NHS funding framework is established to require us to deliver more for less, each year through an expected level of efficiency,” she continued, “this year we have 96p for every pound we had last year, so a requirement that we will become 4% more efficient by doing more for the same money, or spending less on doing the same.
“Gloucestershire is a fabulous County and we are fortunate in the quality of the people we attract and retain, but ensuring a sustainable workforce, and reducing a considerable financial deficit, are huge challenges for us.
“The historic bursary for nursing and allied health professional degrees has gone and now students face the same £9,250 a year loan as other students. This has impacted on the numbers applying for these programmes. While 18 year-olds aren’t necessarily so worried about this, it can look like a big debt to a 35-year-old with children and a mortgage and, historically, around 40% of the entrants to nursing are mature students. I’m hopeful that the apprenticeship programmes will go some way to addressing this as a route into the profession
“Professionals who are mobile, such as doctors can work anywhere. It’s a ‘sellers-market’ and they take into account our local schools, infrastructure, ease of travel and the cost of housing. We need incentives that make it easier to live and work in Gloucestershire so we attract and retain the best.
“We definitely need to make it a County which appeals more to young people so the students we attract stay and work here and those that study elsewhere come back.”
At the same time Martin Sanderson of Prima Dental, a specialist provider of dental drill burs and Gloucester’s second-largest manufacturing employer, felt that the process of measurement itself was the biggest hindrance to better understanding and improving productivity.
He said: “National and regional productivity figures do not cascade well to manufacturing companies as the metrics are not standardised. Does a company really know the impact their factories are having on national and regional productivity figures?
“This makes it difficult to truly understand the root cause of productivity performance and to create aligned strategies for improvement. The opportunity for improving productivity is, therefore, better realised by benchmarking manufacturing and management practices. At Prima, we are investing in growth, whilst identifying opportunities for continuous improvement of our existing processes.”
A place to live
The issue of affordable housing was also raised by Ben Westran of Mears Group, which repairs, improves, builds and manages new, affordable housing.
He said: “Productivity is a very specific issue for us. It’s about how long it takes to turn around a property and get it ready for occupation.
“We see an opportunity to fill the gap left by local authorities, and with six District Councils and one County Council in the region, at the moment it’s all about finding the necessary funding.
“We’re a bit of a stopgap and the private sector is helping us fill the void in council housing alongside the flexible care services we provide for older and disabled people.”
Education and skills
With the further education sector having seen funding cutbacks of up to 30%, Gloucestershire College principal Matthew Burgess believes the County is facing a huge divide between children who have done less well in school, and those from more affluent households.
“By and large employers don’t spend much on training,” he commented. “80% invest less than £5,000 in total each year and the assumption that young people are naturally tech-savvy is misleading.
“The Government’s Industrial Strategy needs skills that are layered with technical instruction and additional investment to make businesses more productive. A focus on higher-level technical skills is in order and there needs to be a difficult conversation on educational attainment.
“We have to ask ‘how do we engage the segment of society that is disengaged?’ For many, college is a liberating experience in a safe environment that enables them to progress and succeed. At the same time, there are too many who’s start in life just isn’t good enough.”
Chris Creed of Creed Foodservice, an employer of 400, advocated his business as a model of investment in people development. “We spend a huge amount of money on training, but we are still encountering 16 year-olds who struggle with their communication skills, and this is a problem” he said.
“If we don’t get people who are educated properly and ready for work, we are not going to improve our productivity. Similarly if they can’t find accommodation and the roads aren’t improving we’re not offering them an attractive place to work and live.”
Scott Lawrence, a partner at Hazlewoods, one of the largest accountancy firms in Gloucestershire with 360 employees, believes that young people appreciate a social working environment.
“In my opinion, under 25s do not want to be working from home, they want to work with other young people,” he noted. “Getting the right people, simplifying what they are doing and removing cumbersome processes should make their careers much more interesting and encourage them to stay in Gloucestershire.
“We also need better infrastructure in the County. There is one road in and out of the Forest of Dean, car parking in Cheltenham is sparse, and while we have a public transport system, it is not suited to the young professional.”
Bureaucracy slows growth
When it comes to building, a steady influx of European labour has made the UK market complacent, according to Simon Carey of Barnwood Group, one of the largest construction and fit-out companies in the County, employing 250 staff.
“The payback from Brexit is really going to hit us in the next few years,” he said, “but we can overcome the construction part with technology. The real problem is the bureaucracy associated with the building.
“Getting land designated quickly and with planning permission from councils is vital if we want to be a County that’s open for business. We need factories to create jobs for people to stay.”
Similarly, Simon King of Hartpury University asked ‘why business processes to enable development aren’t working more quickly?’ “I do challenge the work ethic we have as a country,” he said.
“I travelled to and worked in Australia recently. They seemed to work longer hours across private and public sectors and certainly appeared more productive as people. In this country we have some highly qualified and experienced professionals, such as the police, who are encouraged to retire from the workforce after 30 years, therefore losing essential experience and knowledge.”
For Antonia Shield of BPE Solicitors in Cheltenham, the future looks bright where technology is a factor.
“Technology is huge for us. The biggest challenge is that artificial intelligence (AI) is expensive and we’re a relatively small business. The question is how do we compete against larger organisations? Additionally AI will take away a lot of the everyday work which our less experienced colleagues learn from, so we will need to develop our people differently to cope with this, which will have various impacts in the future.
“Increasingly it helps if we have trainees who’ve grown up in the County and who will stick with us,” she commented. “We’re also taking on lots of apprentices and have some brilliant 18 years-olds, several of whom we’ve promoted to paralegal over the last few months.”
A burden of growth
Stuart Barnes of leadership and strategy development specialists, QuoLux, believes the future of Gloucestershire lies in the hands of a surprisingly small number of organisations.
“There are 1,450 companies in the County with more than 10 employees,” he said. “We should be looking at what can be done to build a bridge to help them because it is these businesses that are facing the burden of growth.
“This all points to leadership and the need to develop and deploy effective policies. We have to understand what the strategy is, how we implement it, and how we get people to engage? Fortunately, people in this County are prepared to work together.”
Rounding up the discussion Professor Kamal Bechkoum, Head of the University of Gloucestershire’s School of Business and Technology, concluded that there are clear pathways that businesses and the University of Gloucestershire can pursue to improve the County’s prospects.
“Bringing our best leaders and their companies together has been an incredibly useful exercise,” he said. “There are recurring themes throughout our discussion. Productivity is a key focus and we clearly need a group of people who can act and take things forward.
“More needs to be done to proactively promote Gloucestershire’s successes. Housing and infrastructure needs investment and improvement, as does educating skills-ready employees and entrepreneurs.
“We’re proud of the excellent things our County already does well. We will now be further engaging with our partners to consider what changes need to be made to take us to the next level.”