East Ayrshire December 2016 Skills Assessments East Ayrshire December 2016

Introduction An Introduction to Skills Assessments Key Data for East Ayrshire Implications for Skills Investment Planning

An Introduction to Skills Assessments

What are Skills Assessments? 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 (SLAED)Group. 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 strengths and any issues or mismatches arising, and so inform thinking about future planning and investment. 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 they cover? Economic Performance, Profile of the Workforce, People and Skills, Education and Training (MAs, Schools, FE and HE), 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 slide pack provides a summary of the data for this area

Local Authority Overview A mixture of urban, rural and isolated communities East Ayrshire borders Dumfries and Galloway, East Renfrewshire, North Ayrshire, South Ayrshire and South Lanarkshire Kilmarnock is the largest town, with most capacity for growth Strong transport links to Glasgow Strategic business locations include Rowallan and Moorfield Historic association with industries such as mining, textiles and whisky

Business Trends Growth of the business base in 2015 above the Scottish rate (9.8% v. 7.3%) 275 new businesses including: Professional, Scientific and Technical (+50); Arts, Entertainment, Recreation & Other Services (+50) and Businesses Administration and Support services (+30) 99% of businesses are small or micro (<50 employees) 45 businesses employ 50+ 252 businesses per 10,000 population compared to 313 nationally 10.0% self employment in East Ayrshire, in line with national rate (10.8%) In 2015, number of Growth Sector businesses increased by 4% to 1,310, but at 43% still account for a lower proportion of all businesses than nationally 22% of employment in Growth Sectors in 2014 (compared to 28% nationally) Slightly higher representation of Growth Sector businesses in Food and Drink, and under representation in Life Sciences and Energy

Population and Projections Population of 122,060 in 2015 2.3% of Scotland’s total population Population has remained steady over the year, against a small rise nationally (+0.5%) Between 2005 and 2015, East Ayrshire saw modest population growth of +1% compared to +5% growth nationally In line with national trends there has been significant growth of those aged 65+ (+19%) from 2005-15 However, there has been steeper decline across the other age groups than nationally, including a 1% fall in the working age population Forecast Population Growth 2012-2037: Total population is forecast to fall by 1% (-800), set against a 9% rise across Scotland The working age population is expected to fall by 16% compared to 4% nationally

Workforce Trends Total employment in East Ayrshire = 40,200 (2% of Scottish total) 6.1% increase 2013-2014, significantly above the Ayrshire region (2.0%) national (3.2%) and Great Britain rate (2.7%) In 2015, 38% work in higher level occupations – lower than the Scottish average of 42% 67% of employed population work in the private sector compared to 77% nationally 23% of employees work part-time, a fall from 27% in 2014 and below national average (26%) 3.8% of people in employment are in non-permanent jobs in 2015, lower than the national rate (5.4%) Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.

Employment and Unemployment The employment rate in East Ayrshire was 70% in 2015, a 1ppt rise from the previous year, but still below the national rate (73%) 54% of employed residents work in East Ayrshire 24% work elsewhere in the Ayrshire region A high proportion (22%) work outside the region Key areas for out-communing are Glasgow City (12%), South Lanarkshire and Renfrewshire (both 3%) In 2015, the unemployment rate in East Ayrshire was above the national average (8% v. 6%), unemployment fell by -3ppts which was greater than the national decline (-0.4ppts) over the same period 89% of 16-19 year olds in East Ayrshire are participating in 2016, and 4% are not, broadly mirroring national participation rates Unemployment = ILO measure, i.e. those who are available for and actively seeking work Unemployment rate: Unemployed as a percentage of the economically active population

Qualifications and Earnings In 2015, a lower proportion of working age adults in East Ayrshire (36%) hold SCQF Level 7-12 qualifications than in Scotland (43%) and the UK (37%) Workplace earnings are below the national average (£494), while residents earnings (£524) are in line with the national average Suggests residents are commuting to better paid jobs outside the area

Modern Apprenticeships Schools Modern Apprenticeships Education and Training The secondary school roll in 2015 was 6,707, 2.4% of Scotland total 91% school leavers had a positive destination in 2015, compared to 92% nationally MA uptake increased by 18% from 2014/15 to 725 3% of national total in 2015/16 Construction most popular MA framework group 33% of uptake Heavily gender segregated - 99% male 75% MA achievement rate in 2015/16

Further and Higher Education In 2015/16, at Ayrshire College there were 17,160 enrolments 6% of Scotland’s total 82% FE and 18% HE Top three subjects: Full-time: Care, Engineering, Sport & Leisure Part-time: Special Programmes, Engineering, Care 61% successful completion of FE courses There were over 2,600 students at the two HEIs in the region in 2014/15 Top three subjects: Subjects Allied to Medicine, Creative Arts and Design, Education 2014/15 students at HEIs in Ayrshire Total university students UWS Ayr 2,240 SRUC Riverside, Ayrshire 365 Total 2,605 HE/FE data is available at Ayrshire regional level only, comprising East, North and South Ayrshire. Data relates to enrolments at FE and HE Institutions in the region, not residents unless otherwise stated. Data provided by SFC and HESA Aberdeen City and Aberdeenshire

Jobs and Skills Changes (1) Total employment (jobs) is forecast to show no change from 2016 to 2024. Across Scotland as a whole 0.2% growth on average each year is expected. Such growth equates to 300 additional jobs in the region by 2024. Administrative and support activities and construction are expected to have growth of 300 and 200 jobs respectively. The professional, scientific and technical activities sector is also forecast to grow (200 jobs). However such gains will be offset by falling employment within the public and manufacturing sectors. The number of jobs within public administration and defence is expected to fall by 400 jobs over the forecast, and those in manufacturing also by 400 jobs. Forecast Demand for Jobs (2016-2024) Total Employment Growth East Ayrshire Employment % annual average change Change in total jobs (‘000s), 2016-2024 2002-2015 2016-2024 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) Replacement demand will result in 18,400 openings within East Ayrshire from 2016 to 2024. Expansion demand is expected to fall by 300 over the same period. Together with replacement demand, this will result in the 18,100 openings expected. Openings will be highest in professional and elementary occupations, driven by replacement demand. The total requirement for workers in skilled trades and caring, leisure and other service occupations is also expected to rise over the 2016-24 period, largely driven by replacement demand. 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

East Ayrshire: Key Implications (1) . Key Labour Market Changes and Dynamics The jobs recovery that was evident in East Ayrshire in 2014 continued in 2015. The 400 new jobs, an increases of 1%, comes at a time of almost no jobs growth across Scotland as a whole. East Ayrshire had suffered delayed but significant job losses between 2011 and 2013 following the recession, but employment numbers are now just 300 short of 2009 levels. There were also sector shifts in 2015. There were job increases in health (+700), which already employs more than one in four, plus jobs growth in accommodation & food services (+400), wholesale & retail (+300), arts & related (+100) and in the locally important production sector (+100). At the same time, there were losses in education (-400), construction (-300), public administration & defence (-200) and the higher value added professional, scientific & technical services (-300). There has been a further shift to public sector employment - and not all the new jobs in the private sector are in higher value added services. The business base has also grown rapidly recently after lagging behind the Scotland average, although overall output is only just increasing and is well below pre-recession levels. East Ayrshire has the challenge of growing private sector employment. Starting and growing local businesses is one route to achieve this. Glasgow

East Ayrshire: Key Implications (2) . Skills demand and supply The population has grown at a slower rate than the Scotland average over the last 10 years, and is forecast to fall by 1% to 2037 at a time of national growth. There is a 16% reduction in the working age population forecast by 2037. Employment in the professional occupations is close to the average for Scotland but these are more typically jobs outside the region or in public services. Higher than average proportions locally work in care and in skilled trades elementary occupations. Despite a predicted fall in the number of jobs, replacement demand will create more than 18,000 openings, highest in elementary roles but also in professional, sales, care and administrative occupations. A higher than average proportion from East Ayrshire go into Further Education after school. The top MA frameworks by take-up are construction (by far the largest number), health & social care (with sport), followed by engineering & energy. Glasgow

East Ayrshire: Key Implications (3) . Recommended Areas of Focus Priorities for East Ayrshire include: Increasing the number of local jobs. Despite recent job growth, numbers remain below 2009 levels. Increasing the quality of jobs. There are fewer higher value added private sector jobs and a continued reliance on public sector employment. Creating a culture of employer investment. Employers continue to need to be encouraged to invest and innovate, which includes investment in skills. Meeting the skills needs of employers. There are important local sectors and occupations, including heath, manufacturing, sales & customer services. Local skills activity should continue to be focused on employer demand. A need for progression routes and pathways. Demand for skills locally is highest at the upper and lower skills levels, professional and elementary occupations, as well as care, administration and sales. Progression needs engendered and supported. A need for flexible provision. Non traditional employment is increasing and skills provision must be flexible, with work-based learning routes part of this. There is a need for skills to support aspirational businesses and employers. Glasgow