Warwickshire County Council: DRAFT Position Statement on Skills Priorities (April 2010) 1. Existing Skills Priorities The strategic approach to skills within Warwickshire is currently guided by the Sub- Regional Economic Development Strategy, the Warwickshire Sustainable Community Strategy 1 (and accompanying Local Area Agreement), and the County Council s Regeneration & Competitiveness Strategy. These highlight the need to tackle relatively low skill levels in the north of the county (particularly through raising ambition and aspiration); to continue and build on our overall strong performance on higher level skills; to develop applied knowledge & learning within our workforce and harness creativity and innovation; ensure skills provision meets the needs of local business; and help provide the skills necessary to drive forward a low carbon economy. 2. Current Business Needs The structure of Warwickshire s economy, and how it has changed over the last 10 years, is shown in Figure 1 below. The broad sector of Distribution, Hotels & Catering continues to be the biggest employer in the county, but has seen slow growth. Banking & Finance and Public Administration, Education & Health have both seen much stronger growth, and represent the other major employment sectors in Warwickshire (although it should be noted that the public sector represents a smaller than regional average share of employment, at 21.2% compared to 27% regionally). Manufacturing remains a major employer, but has seen a steady decline in employment over the last ten years (albeit slower than the regional average). Transport & Communications, Other Services and Energy & Water have seen the strongest relative growth in the county. Figure 1: Structure and change of Warwickshire s economy (1998-2008) Distribution, hotels & rests Average annual growth rate 0.1% Banking & finance Public admin & health Manufacturing Transport & comms Construction Other services Energy and water Agriculture and fishing 2.2% 2.4% -4.6% 6.6% 2.3% 5.0% 5.6% -0.5% 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2008 1998 Source: ABI As perhaps to be expected given the county s economic history, Warwickshire has strong concentrations of employment in motor vehicle manufacturing. However, the county also has a broader specialisation in manufacturing - particularly in metal products, basic metals and machinery which are generally more concentrated towards the north of the county. Warwickshire also has reasonably strong concentrations of firms and, particularly, employment in business service sectors (business & financial services, real estate, computer & related activities, renting of machinery & equipment) which are generally more located in the south of the county. It should also be noted that the county has other strengths beyond manufacturing and business services. Transport, communications and distribution is a strong part of the local economy although again
largely focussed in the north. The utilities sector (electricity, gas and water supply; water collection, purification and distribution) is also very strong in the county, largely concentrated in Warwick District and North Warwickshire. The county also has a strong presence in nearly all of AWM s business clusters, apart from High Value Added Consumer Products. Warwickshire would appear to have particular strengths in ICT, Media, Specialist Business Services, and more moderate concentrations in environmental technologies and building technologies. In terms of occupational mix, Warwickshire s businesses have a larger proportion of senior occupations (Managers & senior officials, professional occupations, and associate professional & technical occupations) than the regional average; and a smaller proportion of lower skilled ones. Moreover, over the past five years, the county has seen stronger than regional average growth in these senior level occupations, and faster than average reduction in lower level ones 2. Business in Warwickshire appear to have less problems with recruitment due to skills shortages, with just 11% of vacancies hard to fill because of skill shortages compared to a regional average of 15% 3. However, there is variation across the county, and Nuneaton & Bedworth in particular has above average share of employment in the sectors and occupations with the highest levels of skills shortages, suggesting a bigger potential problem in that locality. Where these shortages do exist, it is primarily because of a lack of technical skills relating to the particular job and sector in question. After this, the most common concerns are around a lack of softer employability skills, such as problem solving, team working and communication & social skills. There appear to be lower (although still significant) concern around a lack of literacy, numeracy and IT skills. These findings correlate with responses to the Coventry & Warwickshire s Quarterly Economic Survey, which suggest lack of technical skills is the biggest issue for employers particularly in the manufacturing sector. Feedback from employers recruiting young people commonly cite the lack of working world and life experience, poor attitudes to working life and lack of social skills as the main issues. There is a similar story in terms of skills gaps within the existing workforce 4. Slightly fewer than average businesses in Warwickshire say they have staff with skills gaps (7% compared to 8% regionally), and the biggest gap is around technical skills. Again, after this, softer skills such as problem solving, customer handling and team working dominate; while problems with literacy & numeracy were of less concern to employers. 3. Future Skills Needs Forecasts 5 suggest that Warwickshire will continue to see strong growth in the business & financial services sector (growth of 18,500 jobs by 2031) and more moderate growth in distribution, hotels & catering (growth of 4,100), and transport & communications (also growth of 4,100). The county is also expected to see growth in public administration, education and health (growth of 5,300 by 2031); although this will occur after 2020 when constraints on public funding ease. It is likely that this growth will be driven by increases in health and social care associated with a fast growing ageing population forecast for the county. Employment is expected to continue to decline in the manufacturing sector, although it is still forecast to be a significant employer (over 20,000 jobs) in the county by 2031. Moreover, given the generally high proportion of older workers in this sector (29% aged 50 to 64, compared to 27% regionally 6 ) this suggests a continued need to fill jobs in manufacturing as people leave the industry through retirement (replacement demand) despite falling absolute employment. The construction sector is another area which, although is only expected to see low to moderate growth of 3,700 by 2031, has a high proportion of older staff indicating strong replacement demand. Partners and employers in the county have highlighted the need for the education system (schools & colleges particularly) to be more in tune with the employment opportunities that exist (or will exist) in the area and promote careers in suitable sectors (inc. manufacturing).
Strategic priority sectors that we are seeking to attract and develop within the county and wider sub-region are: advanced manufacturing [including power engineering] (particular demand for specialist technical skills, management & leadership skills), low carbon & environmental technologies (demand for scientific specialists, technical skills, and commercial acumen); healthcare and medical technologies (demand for engineering skills and technical skills); and digital & creative media (demand for management & leadership skills, commercial acumen, technical skills, creativity and problem solving skills) 7. Warwickshire also has a number of key investment sites that are likely to generate significant employment opportunities over the next few years 8 and will have certain uses or focus of activity. These are: Ansty a centre for R&D, likely to lead to a demand for people with high level technical skills, and management & leadership skills (c. 5000 jobs when complete) Birch Coppice mainly transport & logistics, likely demand for technical skills; personal skills; knowledge of legislation, health & safety, etc. (c. 2000 jobs) Ryton mainly transport and logistics (as above) c. 3000 jobs Ford Foundry mixed use (office, retail, leisure) so likely to demand administration skills, customer service skills, communication and team-working skills. (c. 1000 jobs) With respect to priorities and objectives locally for 14-19 year commissioning, the key issues are: Tackling NEET [Not in Employment, Education or Training] (specifically to reduce overall NEETs in the Rugby, North Warwickshire and Nuneaton and Bedworth areas); Apprenticeships (increase take up of Apprenticeships - to achieve the participation aspiration of 1 in 5 young people); Engaging with Employers (ensure Schools, Colleges, providers and partners work with employers to keep all Information, Advice & Guidance (IAG) providers up to date and aware of local economic conditions and issues, to enable a better work experience service and to better prepare young people for the workforce); and Achievement and Quality (to close the gap in achievement across all learning pathways between socially advantaged and socially disadvantaged, in particular to address the differences between achievement of young people in the north of the county compared to the south). 4. Tackling worklessness & economic exclusion The latest data (August 2009) shows that 40,880 people in Warwickshire are claiming out of work benefits of some sort (12.7% of the working age population), and 33,870 of these are in the workless subset 9 (10.5% of the working age population) 10. Before the recession, the number of workless individuals in the county was persistent, particularly in our Priority Wards where workless rates are highest. Indeed, in the three years between Aug-04 and Aug-07, total numbers claiming out-of-work benefits in 40,000 Warwickshire fell by just 15, despite significant focus on 30,000 this group. More detailed analysis actually shows that 20,000 the ten worst performing 10,000 wards in the county saw relative increases in 0 worklessness between 2000-2008, suggesting increasing concentrations and more entrenched levels Warwickshire Priority Wards of worklessness. Aug-99 Aug-00 Aug-01 Aug-02 Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09
The recession has clearly significantly increased levels of worklessness, but this has almost entirely been driven by increases in unemployment (people claiming Jobseekers Allowance). While this has impacted across all occupations and parts of the county, the areas that have seen the biggest increases in unemployment are generally those that already had the highest levels of worklessness. These areas are focussed around the urban areas of Nuneaton, Bedworth, Rugby and Warwick/Leamington, and within the more rural market towns of Atherstone and Polesworth in North Warwickshire (see map below) The key driver of worklessness in the county is largely down to economic restructuring, with a significant shift away from low-skilled manufacturing (and, further back, mining) occupations and towards more highly skilled engineering, advanced manufacturing and business services. Increased automisation within manufacturing and logistics businesses has also led to excess labour supply. Low and/or outdated skills of residents in the north of the county, lower ambition and limited aspirations, and lack of effective transport links to the south of the county (which has seen strong employment growth in recent years) appear to have led to (and sustain) higher workless rates in the north. The sorting effect of social housing, which can lead to concentrations of workless individuals in particular areas, is also thought to play a role (to be analysed further through the Local Economic Assessment 11 ). Given that Warwickshire has a greater proportion of higher level occupations than the regional average, and these are growing at a faster rate, this creates additional pressures for those furthest from the labour market with lower skills and potentially greater skills gaps which need to be addressed particularly in the north of the county. However, it should be noted that there are still a significant amount of lowerskilled occupations, particularly in the hotel and restaurant; retail, personal services and adult social care sectors. Feedback from employers suggest key skills demanded in these areas are the softer employability skills of team working, problem solving & good communication, along with increased experience and better understanding of working life and a more positive approach. Continuing to improve the co-ordination, alignment and integration of employment support and skills provision for individuals and employers is therefore critical. In common with the national picture, our research 12 highlights the strong link between skill levels and employment and income. Moreover, low income/lack of employment is also strongly correlated with poor health, child poverty and lower levels of educational achievement which creates a vicious cycle that needs to be broken. 5. Informal learning needs Adult and Community Learning is funded by the Skills Funding agency to deliver learning opportunities under the funding streams for First Steps (including Skills for Life) and Adult Safeguarded Learning. First Steps is largely engagement work and Skills for Life, and does include some formal learning and accreditation e.g. CLAIT and Skills for Life. There is still a high demand in Warwickshire for ICT for beginners. ASL funding includes ringfenced monies for Family Learning, which we deliver through partnership work with Extended Services, Early Years and schools in CYPF and the children s centres. The remainder supports informal adult learning opportunities across many subject sector areas. Some work is planned and delivered with colleagues in the Library and Information Service and with Heritage. We work with a wide range of partners including many from the
voluntary and community sector to plan and deliver learning to communities and groups in localities. Last year, we delivered to over 5,000 learners across Warwickshire. Targets numbers on courses for the curriculum areas for 2010/11 are as follows: Personal and Community Development Learning 2,238; Wider Family Learning 1,062; Family Literacy Language & Numeracy 605; First Steps 1,529 The widest definition of informal adult learning (see the government s White Paper the Learning Revolution ) includes self-supported learning or learning not funded by government monies. Warwickshire has been invited to become the lead accountable body for adult learning in Warwickshire in 2011. It will need to develop appropriate commissioning and strategic resource to do this. There is wide demand for learning in Warwickshire and no sign of abeyance due to the economic circumstances. Our fee income continues to rise. 6. Conclusion Based on the above information and analysis, our key skills priorities are: Improving the supply of technical skills within our key growth (business & professional services, ICT and creative industries, transport & logistics, the utilities sector, adult social care) and target sector (digital media, advanced manufacturing; low carbon & environmental technologies; power engineering healthcare and medical technologies) Increasing softer employability skills (team working, problem solving, communication skills), along with better practical experience of work and greater commercial acumen/entrepreneurial skills. This applies generally to all, but particularly those furthest from the labour market. Narrowing the gap in skills performance between the north and south of the county (improving attainment rates of Level 2 qualifications in northern Warwickshire at a faster than county average rate is a key target within our current Local Area Agreement) Improve the co-ordination, alignment and integration of employment and skills provision across the county (developing a Warwickshire Offer on coordinated employment and skills provision for individuals and employers is a key outcome in the Warwickshire Sustainable Community Strategy).
Notes on text 1 Supported by the five District & Borough Sustainable Community Strategies 2 Source: NOMIS (Annual Population Survey) 3 Source: National Employers Skills Survey 2009 4 Source: Ibid 5 Source: SQW/Cambridge Econometrics (2010) - baseline position 6 Source: Census 2001 7 Information on sector-based skill requirements based on findings from 2009 Regional Skills Assessment 8 There are also a number of other sites that will be developed over a slightly longer timescale, including Stoneleigh Park, NW Nuneaton Site (Judkins Quarry), and the Mast Site in Rugby 9 The workless subset refers to just those claiming Jobseekers Allowance, Incapacity Benefit/Employment Support Allowance, Lone Parents Allowance or Other Income Related Benefits 10 Source: DWP Benefit Claimants Working Age Client Group data (NOMIS) 11 Further details on Warwickshire s work on the LEA can be found at: www.warwickshire.gov.uk/economicassessment 12 See Warwickshire LEA Key Issues Data Analysis Paper for further details