Regional Skills Assessments Tayside December 2016 Glasgow

Introduction An Introduction to Regional Skills Assessments (RSAs) Key Data for Tayside Implications for Skills Investment Planning

An Introduction to RSAs

What are RSAs? A single, agreed evidence base on which to base future investment in skills, built up from existing datasets Partnership between Skills Development Scotland (SDS), Highlands and Islands Enterprise (HIE), Scottish Enterprise (SE), the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development Group (SLAED). Purpose: Support SFC, regional colleges, strategic bodies and college boards in negotiating Regional Outcome Agreements (ROAs) for academic years 2017-2020 Provide a framework for aligning SDS investment in individuals and businesses Assist partners in planning their strategic investment in skills Highlight gaps in national and regional skills evidence

Why are they important for skills planning? They provide a high quality and consistent source of evidence about economic and skills performance delivery at various spatial levels. They can be used to identify regional strengths and any issues or mismatches arising, and so inform thinking about future planning and investment at a regional level. They are accessible online to support all partners in their planning. They provide a core evidence base to support the Scottish Skills Planning Model.

Scottish Skills Planning Model

What do RSAs cover? Economic Performance, Profile of the Workforce, People and Skills, Education and Training (MAs, Schools), Other Economic Activity, Skills Mismatches and Forecasting Underpinned by the 2016 data matrix of seven workbooks, containing data on over 100 social and economic indicators With data at various spatial levels: Regions; City Region Deal; Local Authority The matrix only draws upon official datasets (including APS, BRES, UKCES, UK Business Counts, Census, Scot Gov datasets) and partner data (SFC, SDS, SE, HIE). The data matrix is found here: https://www.skillsdevelopmentscotland.co.uk/what-we-do/partnerships/regional-skills-assessments/ This slidepack provides a summary of the data for this area

Tayside Overview An area benefiting from strong towns and cites, and a large rural hinterland with outstanding natural beauty Strong business base with a considerable number of large employers Major health and education economy, including higher education and research and strong tourism/culture economy Population and workforce growth will increase demand for education and training

Business Trends Growth in business numbers slightly out-paced national growth 2014-2015 +960 businesses, +8%, compared to +7% nationally in 2014-15 Recent growth concentrated in three sectors: professional, scientific & technical (+185); administrative and support services (+155); other service activities (+140) 98% of businesses (12,855) are small or micro (<50 employees), 45 employ 250 or more 316 businesses per 10,000 population, compared to 313 nationally Relatively high levels of self employment (12%) Despite 4% growth over the last year, only 45% of Tayside businesses are in Growth Sectors (46% nationally) (2015) Greater proportion of Tayside Growth Sector businesses are in food and drink than nationally (28% v. 22%), and sustainable tourism (21% v. 18%) 27% of total employment is in Growth Sector businesses, compared to 28% nationally

Sector Trends and Specialisms Moderate group of sectors in high representation and high growth quadrant, with limited recent employment growth Strongest growth in under-represented sectors - professional, scientific and technical and business administration Limited job losses, although production and construction employment declined Note: SIC Section A: Agriculture, Forestry and Fishing omitted as data for farm agriculture (SIC subclass 01000) is not available sub-nationally Click here for explanation: Explanation of Sector Trends and Specialism diagram

Population and Projections Population of 415,040 7.7% of Scotland total Increased slightly slower than national growth rate 2014-2015 (+0.3% compared to +0.5%) and slightly faster over the past ten years 2005-2015 (+5.6% compared to +5.1%) Population change 2005-2015: Driven by growth in the 25-34 (19%) and 65+ (17%) age groups Dundee City has had a significant increase in 25-34 year olds (32%) Angus and Perth and Kinross have seen the most significant increase in 65+ Forecast Population Growth, 2014-2037: Population expected to grow much more quickly than in Scotland as a whole (+13% compared to +8%) Working age population will increase by 3% compared to 4% decrease nationally

Employment and Travel to Work 72% of working age residents are in employment, slightly below Scotland’s employment rate of 73% Place of Work of Residents, by Local Authority: Low levels of out-commuting, with 10% of employed residents working outside Tayside Dundee is the most self-contained labour market, with 84% of those employed working locally Angus has the fewest working within their home area (60%) and the most commuting to other parts of Tayside (29%) Key destinations for out-commuting are Fife (3%) and Aberdeen City (2%) Please note, location of employment figures exclude those working outside the UK, on offshore installations or with no fixed place of work

Workforce Trends 39% work in higher level occupations Total employment in Tayside = 174,200 2.5% increase 2013-2014 Slower than 3.2% increase across Scotland and 2.7% across GB, but remaining in line with national trends overall 39% work in higher level occupations Below Scotland average (42%) but the gap narrowed over 2015 due to above average performance in Perth and Kinross 75% work in the private sector, compared to 77% nationally 27% of those in employment work part-time, with the percentage fluctuating between 25% and 30% over the past ten years 5.8% are in non-permanent employment, slightly higher than in Scotland (5.4%) Rises to 6.6% in Dundee City Nationally, 2% are employed on zero hours contracts Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.

Unemployment and Participation Unemployment rate falling in line with national trends, however at 7% it remains above the Scottish and UK averages (6% and 5%) In line with the national average, 90% of young people aged 16-19 in the region are participating. 5% are not participating and the remainder are unconfirmed. Unemployment in the region fell by -0.4ppts which was the same as the national decline from 2014 to 2015. Within the region the unemployment rate was highest in Dundee (9%) and lowest in Perth and Kinross (5%). Unemployment rate: Unemployed as a percentage of the economically active population

Qualifications and Skills An increasingly highly qualified workforce 2005-2015: Increase in the proportion holding levels 7-12, broadly in line with nationally Fewer than 1 in 10 have no qualifications, as is the case across Scotland Change in Workforce Qualifications 2005-2015: But still slightly less well-qualified than nationally: Slightly fewer working age adults hold SCQF qualifications at levels 7-12, with the exception of Perth and Kinross Outperforms the UK wide average (37%) Percentage of Working Age Adults with SCQF Level 7 or above:

Skills Mismatches 51% of Tayside businesses have recruited staff over the past year (2015), compared to 53% nationally Skills shortages are in line with national averages Hard-to-fill vacancies equivalent to 1.2% of the workforce, compared to 1.1% nationally Skills shortage vacancies match Scotland as a whole (0.8%) The proportion of the workforce with skills gaps is 6% (above Scotland average of 5%). Tayside employers are more likely to report skills gaps and under-utilisation of skills Skills gaps particularly prevalent in elementary occupations 69% of employers with a skills gaps say there is an impact on the business (70% nationally)

Modern Apprenticeships Schools Modern Apprenticeships Education and Training The secondary school roll in 2015 was 21,131, 7.5% of Scotland total 93% school leavers had a positive destination in 2015, compared to 92% nationally Modern Apprenticeship (MA) uptake increased by 7%, from 2014/15, to 2,235 9% of national total in 2015/16 Hospitality & Tourism most popular MA framework group 17% of uptake Good gender parity, 56% female, 44% male 78% MA achievement rate in 2015/16

Further and Higher Education In 2015/16, at Dundee & Angus College and Perth UHI College there were 24,315 enrolments 9% of Scotland’s total 88% FE and 12% HE Top three subjects: Full-time: Business management, Care and Engineering Part-time: Special Programmes, Languages & ESOL and Care 73% successful completion of FE courses There were over 22,000 students at the three HEIs in the region in 2014/15 Top three subjects: Subjects Allied to Medicine, Biological Sciences and Creative Arts & Design HE/FE data is available at regional level only. Data relates to enrolments at FE and HE Institutions in the region, not residents unless otherwise stated. Data provided by SFC and HESA

Workforce Growth The size of the working age population is expected to increase over the next 20 years, in contrast to the national downward trend Nearly 8,000 more people of working age, which will support GVA growth by increasing the number of people in work Challenge in achieving equitable growth with Angus expected to experience a 17% decline in its working age population, and ensuring employment growth is focused within high GVA sectors Despite this, Tayside is forecast to have a decline in the number of people in employment from 2016 to 2024. A -0.2% decline is expected in contrast to 1.0% growth nationally. In Tayside 400 fewer people will be in employment The decline is in contrast to regional growth from 2006 to 2016, the number of people in employment increased by 3,300 (1.8%) Note: analysis uses total employment (people) rather than total employment (jobs). The former figure will be higher as a person can have more than one job. Important that there is a focus on improving GVA through productivity improvements, as well as increasing the number in work

Jobs and Skills Changes (1) Total employment (jobs) growth is forecast to marginally lag behind Scotland, rising by 0.1% per year on average over the 2016-24 period, compared with 0.2% for Scotland as a whole. Growth at this pace equates to 700 additional jobs in the area by 2024. Sectorally, administrative & support activities and construction are expected to be the fastest growing sectors in absolute terms, increasing by 1,100 jobs and 900 jobs by 2024 respectively. Professional, scientific & technical activities is also expected to experience significant growth, each creating 800 jobs by 2024. In contrast, significant job losses are expected in manufacturing and public administration & defence (1,200 jobs each) along with agriculture and education (500 jobs each). Forecast Demand for Jobs (2016-2024) Total Employment Growth Tayside Employment % annual average change Change in total jobs (‘000s), 2016-2024 No title for both charts Note: chart uses total employment (jobs) rather than total employment (people). The former figure will be higher as a person can have more than one job. Source: ONS / Oxford Economics Glasgow

Jobs and Skills Changes (2) In line with the flat employment forecast over the 2016-2024 period, the occupational groupings show relatively little change. Some growth is expected in caring, leisure and other service occupations (300 people) along with elementary (200 people) and professional and skilled trades occupations (100 people each). Declines are expected in administrative and secretarial occupations (400 people) along with process, plant and machine operatives (300 people). Associate professional and technical occupations (200 people) along with managers, directors and senior officials and sales and customer service occupations are also expected to see some loss of jobs (100 people each). Forecast Changes in Occupational Demand Tayside Employment Change in number of workers (‘000s), 2016-2024 Note: chart uses total employment (people). Source: Oxford Economics ‘000s Glasgow

Jobs and Skills Changes (3) The majority of openings in Tayside region over the forecast period, will require individuals with higher level qualifications in part a reflection of the sectoral and occupational trends expected over this period. Individuals qualified to SCQF level 7 or above will account for over half of the 75,800 openings expected to be created between 2016 and 2024. The remaining opportunities will mainly be for individuals qualified to SCQF levels 5-6, accounting for 34% of the total requirement and driven exclusively by replacement demand. There will be limited demand for those with qualifications below this level. Forecast employment change by Qualification (2016-2024) Notes: table uses total requirement (people) totals may vary from previous slide due to rounding within the body of the table Source: Oxford Economics Glasgow

Jobs and Skills Changes (4) Replacement demand will result in 75,000 openings within Tayside region over the forecast. These openings will occur across all types of occupations including those that are expected to decline in net terms. Expansion demand is expected to result in 600 openings between 2016-2024. However together with replacement demand, will result in 75,600 openings over this period. The total requirement for workers is expected to be largest for professional occupations, followed by elementary occupations. Total requirement for these occupations is primarily driven by replacement demand. Sales occupations is also forecast to experience a large total requirement over the period to 2024. Forecast Demand for Jobs (2016-2024) Notes: table uses total requirement (people) totals may vary from previous slide due to rounding within the body of the table Source: Oxford Economics Glasgow

Implications for Skills Investment Planning

Tayside: Key Implications (1) . Recommended Areas of Focus Increasing the quality of jobs. The most significant recent employment growth has been in services, notably tourism, and the region has lost rather than gained higher value added service jobs in 2015. There is a need for Tayside to make a stronger transition to a more knowledge-based economy, and to reduce reliance on low pay and traditional sector jobs. Increase the number of private sector jobs. As part of the above, there is a need to strengthen the private sector employment base, especially in light of forecast job reduction in the sector. There is very limited skills activity in some key disciplines required by modern economies, such as work-based learning in ICT. Creating a culture of employer investment. Employers continue to need to be encouraged to invest and innovate, which includes investment in skills. There will continue to be extreme competitive pressures in manufacturing, as well as services, that will demand high levels of business innovation and a skilled workforce. Glasgow

Tayside: Key Implications (2) . Recommended Areas of Focus Sectorally, there is a need to meet the needs of employers (1). There are key sectors and occupations in the regional economy where growth and replacement demand is strong, including tourism, administration and skilled trades. Tourism has been a growth sector in Tayside. These require work-based learning routes into, and upwards, within sectors. Sectorally, there is a need to meet the needs of employers (2). The health and social care sector is an important sector, and the ageing population in the region will have care needs that will need to be met over time. Whilst there is good skills activity in the region, the ageing demographic will further increase demand. The specific needs of the manufacturing sector must continue to be met. There will be challenging times ahead for the sector, yet it still contributes a disproportionate level of output. Engineering & related skills activity in the region is modest, and this may not be sufficient to meet sector demands. Glasgow

Tayside: Key Implications (3) . Recommended Areas of Focus A need for progression routes and pathways. Demand for skills in the region is strongest at the upper and lower skills levels – professional and elementary occupations – and so progression to upper skills levels needs to be engendered and facilitated. Employment in the professional services has fallen, and the region needs to make sure there are sufficient skills to meet employer demand where this exists. A need to increase the pool of labour and to reduce inequality. There remain some concentrations of deprivation in the region, and there is a need to ensure that some groups do not become distanced from the labour market, or become entrenched in low pay sectors with limited progression opportunities. A need for flexible provision. Non-permanent employment is increasingly a feature of the Scotland economy and more of the future jobs are expected to be part-time. Non traditional employment also means less conventional career paths, and movement between sectors. Skills provision must be equally flexible, with work-based learning a feature of this. Glasgow

Explanation of Sector Trends and Specialism diagram The Sector Growth diagram allows three pieces of sector information to be displayed, providing a useful overview of the local economy. The diagram includes: Sector size (in terms of employment) – shown through the relative size of the dot representing the sector. Sector concentration relative to the Scottish average – The level of concentration is illustrated on the vertical axis through the Location Quotient. The Location Quotient is a measure of the concentration of industry in an area compared to the national average. It produces an index whereby a score of 1 indicates the industry employment concentration is the same both in the local area and nationally, more than 1 represents a higher concentration and less than 1 a lower concentration. Sector average annual growth rate – The horizontal axis shows the average annual employment growth rate of each sector over the past five year period. The diagram includes four quadrants: Top right quadrant - sectors that have shown employment growth and are more highly concentrated in the local area than the national average Bottom right quadrant – sectors that have shown employment growth but are less highly concentrated in the local area than the national average Top left quadrant – sectors that sectors that have shown employment decline and are more highly concentrated in the local area than the national average Bottom left quadrant - sectors that sectors that have shown employment decline and are less highly concentrated in the local area than the national average Click here to go back to the main presentation: Sector Trends and Specialisms