The UK Commission for Employment and Skills: Towards a Five Year Strategy – for the UK & Scotland Goodison Group Seminar Scottish Parliament 6 October 2008 Chris Humphries CBE Chief Executive UK Commission for Employment and Skills

The UK – not a bad track record, surely? 22nd country by size of population 16th economy in world by gross national income 6th largest world economy by GDP: USA, China, Japan, Germany, India, UK, France, Italy, Russia Employment levels at 74.7%, compared to EU of 66% Unemployment at 5.5%, compared to EU at 6.9% What’s the problem? Source: Population, Income and GDP date from CIA Yearbook 2006; Service economy data from OECD Factbook 2006,

UK Jobs and Productivity: An International Challenge … Prosperity depends on jobs and productivity – and both depend on skills Employment – UK is 4th in EU; 8th out of 30 in OECD Productivity – UK is 10th out of EU 15; 15th out of 30 in OECD UK USA EU Source: Labour Market Trends (May 2005), O’Mahoney and Van Ark (2003)

UK Productivity: … a sectoral challenge UK Productivity as %age of Europe’s Good Poor

… with skills variations across sectors Source: Labour Force Survey, Q4, 2007

UK Jobs and Productivity: … and a national/regional challenge … Source: Office of National Statistics- GVA data 2006; Employment data Q4, 2007

… with skills variations across nations and regions UK Working Age Population – Highest Qualifications Held, 2006 Source: ONS Regional Snapshot, 2007

UK demographic trends to 2020: Less young & more older workers The UK Commission for Employment and Skills 14/11/2018 UK demographic trends to 2020: Less young & more older workers Projected change in age groups 2010-2020 (in thousands) Particular decline pattern amongst youngest workers 821 33% + - 800 100 200 500 400 300 600 700 15-19 20-24 25-29 30-34 35-39 40-44 AGE 70-74 45-49 65-69 60-64 55-59 50-54 900 808 +23% 500,000 (12%) decline in 10 years 662 +17% 542 +14% 335 +11% 218 +5% 531% 15-19 20-24 35-39 40-44 45-49 60-64 55-59 50-54 362 -9% 309 -7% 752 -16% 404 9% 201% Big increase in older workers 75% of UK workforce already in work Yet these are the people we are least likely to train Source: UK Government Actuary, 2004-based Project populations 2004-2074 © UKCES 2008

Skills of the UK adult workforce: 1990-2020 The UK Commission for Employment and Skills 14/11/2018 Skills of the UK adult workforce: 1990-2020 33% with high skills 28% with very low skills Source: DfEE/DfES, Labour Force Survey, 1990-2005; Leitch, Prosperity for all in the Global Economy, 2006 © UKCES 2008

High employment levels mean we must reach more of the unemployed and inactive Source: ONS, Labour Force Survey, 2005

UK improvements are too slow at school level … UK Position: 15th in OECD for ‘older workers’ 22nd in OECD for ‘younger workers’ Source: OECD, Education at a Glance 2007, Table A1.2a

… and too slow at tertiary level too UK Position: 12th in OECD for ‘older workers’ 17th in OECD for ‘younger workers’ Source: OECD, Education at a Glance 2007. Table A1.3a

… and we don’t train our managers well! On-the-job Off-the-job Source: Keep & Westwood, ‘Can the UK Learn to Manage?’, 2003

Are we closing the gap at the moment? Skill Level OECD 2007 position 2020 position on current trend Literacy/numeracy 20th out of 23 N/A No/low skills 17th out of 30 (35%) 15th Intermediate Level skills 20th out of 30 (36%) 13th Degree or higher 11th out of 30 (29%) 14th

What is the big UK ambition? The UK Commission for Employment and Skills 14/11/2018 What is the big UK ambition? “A competitive society – one which achieves a dynamic equilibrium between wealth creation and social cohesion” Prof. Stephane Garelli, Editor, World Competitiveness Handbook, 1995 Productivity improved to European average Increased employment opportunities – 80% in work A world class high skill workforce Better equity and social cohesion – closing the gaps! © UKCES 2008

UK Commission for Employment and Skills: Purpose and Roles The UK Commission for Employment and Skills 14/11/2018 UK Commission for Employment and Skills: Purpose and Roles Purpose: “to strengthen the employer voice, deliver greater leadership and influence and to achieve the best from the employment and skills systems” Principal Roles: “assess progress towards making the UK a World Class Leader in employment and skills by 2020”; “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”; “promote employer investment in people and the better use of skills”; “express its advice and recommendations to the highest levels of governments in the UK”; “fund and manage the performance of the Sector Skills Councils including their re-licensing.” Source: UK Government Remit Letter to UK Commission for Employment and Skills, March 2008 © UKCES 2008

Year 1 Work Programme Core Programme: Baseline Projects: Prepare first ‘State of the Nations’ Report – March 2009 Launch and progress SSC Re-licensing Review of Employer ‘Collective Measures’ Preparation for 2010 Review of Employment and Skills Services, and later review of Statutory Entitlement to Learning Baseline Projects: Underpinning Research Programme – UK & International research programme to inform annual progress report Linking Spatial and Sectoral Initiatives – maximising the geographic return from sectoral/regional skills initiatives

Year 1 Work Programme (cont’d) Commission Projects: Labour Market Information models – to ensure consistent, high quality and reliable Labour Market Information is available for both sectors and regions ‘Mapping’ – the UK employment and skills system so employers find it easier to access, and gain, the support they need from colleges and Universities Employability Skills – ensuring learners get, in addition to technical skills, the generic employability skills needed by 21st century employers ‘Customer Journey’ studies – track the employer and learner experience with colleges to help simplify the UK employment/skills system Employee Demand Study – identifying and removing barriers that reduce current employee participation in work-related skills and training Simplification – seeking to simplify the employment and skills system to better serve the needs of employers and individuals Skills Utilisation – how to deploy higher level skills to implement more productive and competitive business strategies

Draft Strategic Map: 2009-2014 SUSTAINABLE ECONOMIC COMPETITIVENESS National and global economy Competitor/ comparator nations Social policy and conditions Culture – attitude & values SUSTAINABLE ECONOMIC COMPETITIVENESS AND SOCIAL COHESION 2020 Goal: UK still 6th largest world economy 2020 Goal: Converging earnings ratios between top and bottom quartile INCREASED PRODUCTIVITY (‘Good industries – sustainable) 2020 Goal: UK productivity = EU average INCREASED EMPLOYMENT (‘Good jobs’ – career progression) 2020 Goal: 77% employment rate Regulatory environment Competition policy Infrastructure Investment Trade Research & development Public sector effectiveness OTHER DRIVERS OF PRODUCTIVITY Job creation initiatives Conducive benefits system/ incentives Sustainable development Closing opportunity gaps Equality & diversity OF EMPLOYMENT SKILLS AND EMPLOYMENT POLICY AND PRACTICE 2014 Progress: 36% of working age population at sub-degree HE 2014 Progress: 58% at upper secondary/equivalent 2014 Progress: 60% at lower secondary level/equivalent 2014 Progress: 76% employment rate 2014 Progress:: UK unemployment rate 20% lower than EU average ENTERPRISE & INNOVATION 2014 Progress: High performance working target TBA ECONOMIC DEVELOPMENT 2014 Progress: Converging spatial equity gaps - TBA UK COMMISSION FOR EMPLOYMENT AND SKILLS To monitor, challenge and stimulate improvement of the UK employment and skills system in … Raising ambition, engagement and investment Developing demand-led policies, measures & incentives Implementing through simple & responsive structures / processes Achieving world class performance and delivery Identifying priorities and improving intelligence For Employers For Individuals For Learning Providers

Some questions for your consideration: Does this strategic framework make sense? Are our ambitions for the UK appropriate? How may they need to be adjusted for Scotland? In addition to productivity and employment, are we right to include aspects of: Enterprise (e.g. skills utilisation/ high performance working; management and leadership) Economic development (e.g. closing geographical ‘gaps’ in productivity, employment and skills) in our scope? Are the three key levers for Commission challenge and influence appropriate? (see more detailed framework ‘handout’) What changes does the current system need – on the demand side and on the supply side?

To contribute further to the development of UKCES’ Strategic Plan, please send your thoughts to strategic.plan@ukces.org.uk