North Lanarkshire Skills Assessment January 2016 SDS-1163-Jan16
Acknowledgement The Regional Skills Assessment Steering Group (Skills Development Scotland, Scottish Enterprise, the Scottish Funding Council and the Scottish Local Authorities Economic Development Group) would like to thank Ekosgen for their highly professional support in the analysis and collation of the data that forms the basis of this Skills Assessment Update.
Introduction What is this report? This is a specific skills summary report for the North Lanarkshire local authority area, one of a series of 32 local authority reports across Scotland. These follow the preparation of 2015 summary Regional Skills Assessments (RSA) which have been developed by Skills Development Scotland (SDS), in partnership with Scottish Enterprise (SE), the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development (SLAED) Group. The preparation of local authority-specific reports are designed to help support local authorities and partners with skills investment planning by providing local authority level data where this exists. The reports also support SDS in planning its provision for individuals and businesses. This series of local authority reports sits alongside the 2015 RSA update reports which highlight some of the key messages for the regions. The local authority and regional updates are summary reports, underpinned by the full data matrix, available at sds.co.uk/what-we-do/partnerships/regional-skills-assessments/. The data matrix has been redesigned to be more user-friendly, and accompanying guidance on how to use the matrix can be found alongside the full data matrix. What has changed since 2014? The economic situation in Scotland has continued to improve in the last year, and the recovery evident at the time of the last RSA is more firmly established, with rising GVA and falling unemployment. Against many indicators, Scotland has returned to prerecession levels. There continues to be a rise in the participation of women and older workers, and youth unemployment previously apparent has started to fall. Still, underemployment remains an issue and productivity growth in Scotland (and the UK) remains weak and largely consumer-driven. In policy terms, a new Economic Strategy for Scotland is in place. This puts the 4 I s Internationalisation, Investment, Innovation and Inclusive Growth as central to the strategy. Increasing exports continues to be a key policy objective, and the prominence of Inclusive Growth reflects the desire for a re-balancing form of economic growth. Innovation, including workplace innovation, continues to be highly important. Investment continues to be necessary for firms to be successful. Existing strategies and policies also remain important, including the 2010 Skills Strategy and the 2014 Developing the Young Workforce - Scotland s Youth Employment Strategy. The 2015 RSA update seeks to reflect some of these policy developments. For the first time the data matrix includes deprivation indicators, and there is greater attention paid to inequality issues such as age, disability and gender indicators. There is also more detail on school-level provision, migration, travel to work/study, claimant counts and employment projections. 2
Selected headline indicator changes North Lanarkshire Previous year Most recent year % change Economic performance Gross Value Added (GVA) ( m) 5,207 (2012) 5,403 (2013) +3.8% GVA per worker 33,600 (2012) 34,400 (2013) +2.4% Number of businesses 9,110 (2013) 9,330 (2014) +2.4% Profile of the workforce Total employment 124,800 (2013) 133,300 (2014) +6.8% Professional occupations 19,100 (2013) 22,400 (2014) +17.3% People and skills supply Total population 337,700 (2013) 338,000 (2014) +0.1% ILO unemployed 16,400 (2013/14) 12,900 (2014/15) -21.3% 16-24 unemployed 2,064 (2014) 1,211 (2015) -41.3% Deprivation Workless households 24,200 (2012) 24,437 (2013) +1.0% % of children with free school meals n/a 38% (2015) n/a Education and training MA starts 2,005 (2013/14) 2,075 (2014/15) +3.5% College provision (headcount)* 21,600 (2012/13) 25,674 (2013/14) +18.9% Higher Education provision (headcount)* 4,210 (2012/13) 4,123 (2013/14) -2.1% Skills mismatches % of employers recruited in past 2-3 years 66%** (2014) (next updated 2016) n/a % of employers reporting not all staff fully proficient 18%** (2014) (next updated 2016) n/a *Please note, this data is only available at the RSA 2015 regional level, covering North Lanarkshire, South Lanarkshire and East Dunbartonshire. **This data is only available at the RSA 2014 regional level covering Glasgow and the Clyde Valley. This includes East Dunbartonshire, East Renfrewshire, Glasgow City, Inverclyde, North Lanarkshire, Renfrewshire, South Lanarkshire and West Dunbartonshire local authorities. 1 Economic performance North Lanarkshire generated a modest but significant proportion of Scotland s total GVA output, 4.6% in 2013, in line with the previous year. GVA output is dominated by the production sector (32% of the total), public administration sector of education and health (20%) and distribution, transport, accommodation and food (18%). The GVA of 3.8% in 2013 was above the 2.9% in Scotland, and up from 1.8% in 2012. Productivity levels in North Lanarkshire remain below the Scottish and UK averages. GVA per worker was 34,400 in 2013, 27% below the Scottish average of 47,000 and 33% below the UK average of 51,000. GVA per worker rose by 12% between 2006 and 2013, although lower than in Scotland (18%) and the UK (17%). Most recent (2014) data shows that full time jobs in North Lanarkshire, at 489 per week, pay below the Scottish ( 519) and UK ( 518) averages. This remained broadly the same as 2013, in contrast to a 2% increase across Scotland. Those living in North Lanarkshire also earn below average, 482 per week for full time work. 3
Business Base by Sector, 2014 Source: UK Business Counts Construction Retail Professional, scientific & technical Business administration & support services Arts, entertainment, recreation & other services Accommodation & food services North Lanarkshire 0% 5% 10% 15% 20% Scotland businesses than the Scotland average. There were 9,330 VAT/PAYE registered businesses in 2014, up 2.4% from 2013, just below the 2.8% Scotland increase. Since 2010, the base has grown by 4%, below the 5% growth in Scotland and 6% in the UK. The largest sector in the business base in North Lanarkshire business base is the construction sector (12%), followed by retail (11%) and the professional, scientific and technical sector (10%), although the latter is below the proportion across Scotland. North Lanarkshire however has a greater proportion of business services sector 2 Profile of the workforce Total employment in North Lanarkshire continued to grow strongly between 2013 and 2014, to 133,300. This was an increase of 6.8%, more than double the Scottish average of 3.2%. Total employment was 3.3% higher in 2014 than it was in 2009 when a number of areas have struggled to recover to pre-recession employment levels. There was a 1% increase in employment across Scotland over the same period. 105 100 95 90 85 Index of Total Employment, 2009-14 Source: Business Register and Employment Survey 2009 2010 2011 2012 2013 2014 Health accounts for the largest proportion of total employment, some 20%, or 26,200, well North Lanarkshire Scotland GB above the Scotland (16%) and Great Britain (13%) proportions. North Lanarkshire has a high employment concentration in a number of sectors, including construction, production, health and business services, which are also the largest employment sectors in the area. Although smaller, transport and storage and wholesale employment are also concentrated in the area. A number of sectors are underrepresented, including higher value added sectors such as the professional, scientific and technical sector and information and communications. Sectoral specialisation exists for those sectors with a value which is above 100%. Transport & storage (inc postal) Construction Wholesale Health Business administration & support Motor trades Public administration & defence Production Retail Arts, entertainment, recreation Information & communication Professional, scientific & technical Accommodation & food services Education Property Financial & insurance Agriculture, forestry & fishing Sector Specialisation, 2014 Source: Business Register and Employment Survey 0% 50% 100% 150% 200% 4
North Lanarkshire generally has higher proportions in lower skilled occupations. More of those resident in the area employed in care and leisure (12%), sales and customer service (10%) and as operatives (8%) than in Scotland. Further, there are fewer in higher skilled occupations, 14% or 22,400 below the Scotland and UK averages of 20%. The profile by occupation reflects the sector mix of the area. Process, plant and machine operatives Caring, leisure and other services Managers, Directors & Senior Officials Occupational Profile, 2014 Source: Annual Population Survey Elementary occupations Sales and Customer Service Skilled Trades Occupations Administrative and Secretarial Associate Prof & Tech Professional Occupations North Lanarkshire 0% 5% 10% 15% 20% 25% Scotland 3 People and skills supply At an estimated 338,000, the 2014 population has not increased since 2011, while the population of Scotland grew by 1%. Overall, however, there has been an increase of 4% in North Lanarkshire since 2004, compared to 5% growth in Scotland and 8% growth in the UK over the same period. 110 105 100 95 Index of Total Population, 2004-14 Source: Mid-Year Population Estimates 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 The employment rate for North Lanarkshire in 2014 was 71%, in line with the 2013 rate, although North Lanarkshire Scotland UK this is slightly below the 73% for Scotland and Great Britain. In 2014/15 there were 12,900 ILO unemployed (those out of work and actively seeking work), down from 16,400 in 2013/14 (and 22,700 in 2012/13). The ILO rate in 2014/15 was 8% in North Lanarkshire, above the 6% in Scotland and the UK. In 2015 there were 1,211 unemployed young people aged 16 to 24, a substantial decrease of 41% since 2014. The proportion of school leavers entering Higher Education in 2014/15 was 39%, two percentage points higher than the 2013/14 rate and above the Scotland rate of 38%. The percentage entering Further Education was 27% and 22% entered employment. The proportion of those aged 16-64 years in North Lanarkshire with high level qualifications (33% at SCQF 7-12) is below the Scotland rate (35%). The percentage with no qualifications (14%) is well above the Scotland rate (9%). Amongst 16-24 year-olds, 21% have higher-level qualifications (SCQF 6), below the Scottish rate (27%), although 28% have qualifications at SCQF 7-12, higher than the 24% nationally. 5
4 Deprivation 22% of North Lanarkshire households (24,437) are workless households (2013), compared to 20% in Scotland, and 17% in the UK. 28% of households have incomes above 30,000, compared to 31% across Scotland. In all, 38% of those at school in North Lanarkshire are entitled to free school meals. This is slightly below the national average of 39%. 5 Education and training provision There were 20,771 pupils enrolled at secondary schools across North Lanarkshire in 2014, 29% of whom were S5 and S6, in line with the 29% across Scotland. There were 2,075 SDS-supported MA starts in 2014/15, a 3% increase on the 2,005 in 2013/14. 61% of starts were male and the remainder female (39%). There were 2,005 SDSsupported MA leavers in 2014/15. 25,674 students (headcount) were studying at in Lanarkshire region in 2013/14; of these, 20,261 were studying at New College Lanarkshire (North Lanarkshire) and 5,413 at South Lanarkshire College (South Lanarkshire) and 20,261. 82% of Lanarkshire students were studying at FE level and 18% at HE level. 65% of Lanarkshire region residents who are at college study locally. 1 There is no higher education institute in North Lanarkshire; within the wider Lanarkshire region in 2013/14, 4,123 students (headcount) were studying at the University of the West of Scotland s Hamilton Campus, based in South Lanarkshire. There were 720 graduates from the region in 2013/14; of these, 616 held a first degree (86%) and 104 were postgraduates (14%). 2 6 Skills mismatches 3 66% of employers in the Glasgow and Clyde Valley region had recruited in the 2-3 years prior to the UKCES survey, and 29% had taken on leavers from Scottish education institutions (in contrast to 67% and 26% across Scotland). Nearly a fifth (18%) of employers in Glasgow and the Clyde Valley reported that not all of their staff are fully proficient, above the average for Scotland of 19% with skills gaps most likely in skilled trade, sales and customer services, operative and elementary occupations. 1 Please note, this data is only available at the regional level, covering North Lanarkshire, South Lanarkshire and East Dunbartonshire local authorities. 2 ibid. 3 Please note, data is from 2013 as the UKCES Employer Skills Survey is only undertaken every two years. Further, data is only available at the 2014 RSA regional level, covering East Dunbartonshire, East Renfrewshire, Glasgow City, Inverclyde, North Lanarkshire, Renfrewshire, South Lanarkshire and West Dunbartonshire local authorities. 6
7 Looking forward The population of North Lanarkshire is forecast to rise by 2,681 over the 2014-2024 period, an increase of 1%. This compares to 5% growth at the UK level, and a 4% rise at the Scotland level. The school roll is projected to fall slightly to 20,300 in 2016 and 2017, before rising to 20,400 in 2018, a 1% decrease overall. Across Scotland, the trend is for a 2% fall over the period to 2018. Based on 2012 figures, national employment figures are projected to rise by 5.3% from 2012 to 2022, with the fastest increases occurring between 2017 and 2020. Greatest levels of growth are expected in information technology (32%) and health and social work (17%). There is projected to be a fall in agriculture employment (-15%), other manufacturing (-12%) and public administration (-11%). 8 Summary There continues to be strong jobs growth in North Lanarkshire, with the increase from 2013 to 2014 twice the rate for Scotland. There are now more jobs in the area than in 2009, and the increase from 2009 is above the Scottish rate of increase. Alongside employment growth, there have been very significant reductions in unemployment. There are a number of important sectors in the North Lanarkshire economy, including business services, one of the growth sectors in the area and production (which remains important in employment terms). Despite positive jobs growth, there remains a reliance on public sector jobs, with a higher than average employed in the public sector. Despite strong jobs growth, jobs pay less in North Lanarkshire than the Scotland and UK averages, and there is a need to continue to attract and grow higher value jobs where possible. Although North Lanarkshire will always face competition from Glasgow and Edinburgh for employment, the area is under-represented in higher value added sectors, such as the professional, scientific and technical sectors and information and communications. The business base has also grown, and at a rate close to that for Scotland, although again the largest proportions are in the typically lower value sectors of construction and retail. There are also employment specialisms in transport and storage, construction and wholesale. One of the key challenges for North Lanarkshire is to continue to diversify the economy and to attract more higher value jobs, which will help to raise average workplace and resident earnings. The local economy has done well to develop and grow the business services sector to help offset reliance on employment in the traditional sectors (including production) and the public sector. The supply of skills needs to both help meet the needs of growth sectors whilst addressing the skills demands of important existing local sectors. 7