Ambition 2020: World Class Skills and Jobs The UK Commission for Employment and Skills: Ambition 2020: Towards a new skills strategy Global Skills Marketplace WorldSkills Calgary 2009 2 September 2009 Chris Humphries CBE Chief Executive UK Commission for Employment and Skills (c) UKCES 2009

UK Commission for Employment and Skills: A Strategic Advisory Body The UK Commission for Employment and Skills 05/12/2017 UK Commission for Employment and Skills: A Strategic Advisory Body Purpose: “to strengthen the employer voice, and deliver greater leadership and influence to achieve the best from the UK’s employment and skills systems” Principal Roles: “develop an independent view of how employment and skills services can be improved to achieve increased employment retention and progression, skills and productivity; “provide advice to inform strategic policy development, analysis and exchange of good practice to drive and shape the skills and employment system to meet the needs of employers and individuals; “fund and manage the performance of the Sector Skills Councils and advise Ministers on their re-licensing.” Reporting to: Prime Minister, Chancellor, Secretaries of State for Business, Schools, Skills, and Employment, and First Ministers of Northern Ireland, Scotland and Wales © UKCES 2008

The Commissioners: A strong and independent employer voice Chairman, BT Group plc (Chair) - large CEO, Homes and Comm. Agency - Public Head, KPMG Fin. Serv. Europe - large Director General, CBI - trade assoc CEO, SERCO plc - large General Secretary, TUC - trade union Chairman, John Lewis - large General Sec., Scottish TUC - trade union CEO, AstraZeneca plc - large General Secretary, Unison - trade union CEO, IBM UK Ltd - large Vice Chancellor, U. Manchester - Uni HR Director, Crossrail - large Principal, Warwickshire Coll. - College CEO, United Utilities - large CEO, Turning Point - voluntary Dep. Chair, Wates Construction - large CEO, RADAR - voluntary UK MD, BAe Systems - large Commissioner for Scotland CEO, Simple Solutions - SME Commissioner for Wales CEO, Pyronix Ltd - SME Commissioner for Northern Ireland

Ambition 2020: World Class Skills and Jobs Productivity and employment in OECD: Where are we now? Where should we be? High employment/ low productivity High employment/ high productivity Employment: UK 10th place SETTING A WORLD CLASS AMBITION: SUSTAINABLE ECONOMIC COMPETITIVENESS & SOCIAL COHESION 2020 Goal: World Class Productivity Levels - in top 8 OECD countries 2020 Goal: World Class Employment Levels - in top 8 OECD countries 2020 Goal: World Class Skill Levels - in top 8 OECD countries Productivity: UK 11th place Employment populations ratio 2007, all persons 15-64 Employment: Low employment/ low productivity Low employment/ high productivity Productivity: GDP per hour worked (US$ at current prices), 2007 Source: UKCES, Ambition 2020: World Class Skills and Jobs for the UK, 2009, pp 21-22 (c) UKCES 2009

The UK Qualifications Profile 1997-2007: Good progress over last decade! Achievements 1997 2007 1997-2007 Change 1997 – 2007 % Nos (‘000s) Level 5 3 1087 7 2274 110 +1187 Level 4 18 6101 24 8060 32 +1959 Level 3 5999 20 6738 12 +739 Level 2 21 6865 6912 1 +47 Below Level 2 7074 17 6019 -15 -1055 No Qualifications 5920 4351 -26 -1569 +44% -26% Source: Labour Force Survey, 2008 – Note: Working age population 19 – 59/64

The UK – leading in some areas: Participation of adults in lifelong learning Benchmark 2010 Source: Eurostat (EU – Labour Force Survey), 2000-2007 (some data 2006)

But the competition is global: Improvements are too slow at school level … UK Position: 15th in OECD for ‘older workers’ 21st in OECD for ‘younger workers’ Source: OECD, Education at a Glance 2008, Table A1.2a

… and at tertiary level too Ambition 2020: World Class Skills and Jobs … and at tertiary level too UK Position: 12th in OECD for ‘older workers’ 15th in OECD for ‘younger workers’ Source: OECD, Education at a Glance 2007. Table A1.3a (c) UKCES 2009

… with major skills variations across sectors Source: Labour Force Survey, 2007

Productivity and employment in UK: A regional challenge too High employment/ low productivity High employment/ high productivity UK Employment populations ratio 2007, UK = 74.4% Employment:  Low employment/ low productivity Low employment/ high productivity Productivity: GDP per hour worked (UK = 100), 2009 Source: UKCES, Ambition 2020: World Class Skills and Jobs for the UK, 2009, pp 21-22

… with national/regional skills gaps Percentage of working age population in employment by qualifications level Percentage in employment with Level 4 skills and above Percentage in employment with Level 2 skills or below Source: UKCES, Ambition 2020: World Class Skills and Jobs for the UK, 2009, Chart 2.1 – ONS Population Survey, Jan-Dec 2007

UK employment change 2007-2017: Major growth in high level skills Over 50% of all job demand Over 100% of all expansion demand 13,451 Source: UKCES, Working Futures 2007-17, January 2009

UK employment change 2007-2017: Continuing sectoral variations Source: UKCES, Working Futures 2007-17, January 2009, Table 2.6

UK Current Progress to 2020 Ambitions Skill Level 2007 Actual 2020 Ambition Projected Outcome Size of gap High level skills 31% 40% 41% +1% Intermediate level skills 20% 28% 17% -11% Lower secondary 22% 19% -3% Primary (<12) 6% 16% -10% No qualifications 12% 4% 7% Basic Literacy 85% 95% 0% Basic Numeracy 79% 89% -6% Intermediate/Low Level skills & Numeracy – the key UK challenges Source: Ambition 2020, Tables 4.2 & 4.3, p 58-59

Progress towards 2020 Ambitions Ambition 2020: World Class Skills and Jobs Progress towards 2020 Ambitions Skill Level Low level skills Intermediate level skills High level skills 2020 Ambition Top 8 Actual 2007 17 18 12 Forecast 2020 23 21 10 So shouldn’t the UK be experiencing major skills shortages? (c) UKCES 2009

Ambition 2020: World Class Skills and Jobs Low UK skills shortages and skills gaps: Over-skilled or under-employed? Skills Shortages and Skills Gaps in the UK UK Skills shortages %age of establishments 5% Number of skills shortage vacancies 154,000 Skills shortage vacancies as %age of employment 0.6% Skills gaps 15% Skills gaps as percentage of employment 6% Over-skilled or under-employed? UK Over-qualified 39.0% Comprising: real over-qualification 16.8% formal over-qualification 22.2% Over-skilled 32.7% Under-qualified 13.8% Qualification matched 47.2% Amongst which: matched but over-skilled 12.3% Definitions: Over-qualified: an over-qualified individual has a qualification at a higher level than that currently required to get the job they hold. Real over-qualification: over-qualified and over-skilled Formal over-qualification: over-qualified but not over-skilled Over-skilled: perceived under-utilisation of skills Under-qualified: an under-qualified individual has a qualification at a lower level than that currently required to get the job they hold. Qualification matched: neither over-qualified nor under qualified Source: Drawn from National Employer Skills Surveys, England, 2007; Skills in Scotland, 2006; NI Skills Monitoring Survey, 2005; Future Skills Wales 2005; adapted from Tables 7.2, 7.3 & 7.6 in Ambition 2020, pp 105-108 (c) UKCES 2009

Slow progress to a high skill economy: Change in skilled jobs between 1998 and 2006 UK Position: 12th place in 2006 Slowest positive growth Source: Ambition 2020, Charts 7.1 & 7.2, pp 115-116 - OECD, Education at a Glance 2008, Table A1.3a and Table 1.6

Difference between skills supply & demand: Change between 1998 and 2006 Source: Ambition 2020, Chart 7.1, p 115 - OECD, Education at a Glance 2008, Table A1.3a and Table 1.6

A framework for skills and jobs Ambition 2020: World Class Skills and Jobs 05/12/2017 A framework for skills and jobs Positive Economic and Social Outcomes Economic Performance Employment Reduced Inequality Productivity Supply of Skills Employment Demand Match Mismatch Learning provision Skills Attainment Potential Workforce Required Workforce Business Strategy Economy – level/structure Accredited (Qualification) Informal (Training) Management & Leadership Skills Utilisation Shortages and skills gaps Unemployment and Inactivity ‘Over-skilled’ / ‘Under-employed Migration Negative Economic and Social Outcomes Skills Investment Individual, Employer, Government Industrial Policy Economic Policy Other Drivers Guidance – firms & people Supply Jobs Demand (c) UKCES 2009

Five priorities for world class skills & jobs Industrial/ Economic Renewal Local Economic Development Commission Priorities 2009-14 Individual Aspiration Responsive Provision Employer Ambition

Five priorities for World Class skills and jobs To create a clear and integrated strategy for economic transformation and renewal, aligning policies and practices in industrial policy, employment and skills in order to achieve that transformation. To support effective economic development in cities and local communities, built upon economic and labour market strengths and opportunities, and maximising the skills of the local working age population. To build employer ambition and capacity to be World Class, capable of competing globally in the high skills, knowledge driven economy, by optimising the talent and skills of their people. To transform individual aspiration and skills into a World Class workforce, maximising the motivation and opportunity for all people to develop and exploit their talents and skills to their full potential To develop more strategic, agile and demand-led skills and employment provision, capable of anticipating and rapidly meeting employers’ evolving skills and job requirements.

UK Commission Strategic Priority 1: Increasing employer ambition, engagement and investment in skills Principal workstreams: Build a powerful business case for skills to demonstrate and promote the value of employer investment in workforce development; Advise governments and employers on the UK’s emerging strategic skills needs, particularly in relation to new industries and technological change; Re-license, fund and manage the performance of Sector Skills Councils (SSCs) to become a highly influential and effective UK employer network; Devise, with SSCs, and implement a new standard for labour market information reports to identify current and future skills needs across the UK nations and regions; Undertake research and advise employers on ways to improve skills utilisation and implement high performance workplace practices. Recommend practical actions to increase the leadership and management skills across UK employers;

UK Commission Strategic Priority 2: Maximising individual opportunity for skills and sustainable employment Principal workstreams: Prove and promote the benefits of learning to individuals of all ages in order to raise individual aspirations for higher skills and better jobs; Identify key barriers to employment and skills for individuals, and advise government on ways to increase individual demand for and access to skills and workplace learning; Utilise, and support the use of, customer journey and satisfaction studies to inform system simplification and improvements, and promote better system integration; Work with government to identify the best modes for integrating employment and skills services, especially for people in/at risk of social exclusion Support the development of a flexible and modular qualification system that better enables individuals to build the skills needed for sustainable jobs and progression; Identify and promote international best practice in employee engagement strategies to employers, supporting the growth in high performance workplaces.

UK Commission Strategic Priority 3: Building a more strategic, agile and demand-led employment & skills system Principal workstreams: Advise on targets, measures & incentives for employment and skills leading to a more outcome-focused approach to increase relevance, quality and value for money; Ensure the UK’s employment and skills systems enhance equality and opportunity amongst individuals and groups at greatest risk of labour market inactivity or exclusion; Improve labour market information, especially on emerging industries and skills needs, to inform learning providers and better align future demand and supply; Recommend and monitor approaches to simplify all employer facing services in employment and skills, to improve employer engagement and satisfaction; Trust and empower Colleges/Provider to collaborate on employment and skills services to deliver a more responsive local service for employers and individuals; Undertake national and international research on best practice in employment and skills services, to enhance provider performance to world class standards.