1. Shetland Islands December 2016
Skills Assessments
Shetland Islands
December 2016

2. Introduction An Introduction to Skills Assessments
Key Data for Shetland Islands
Implications for Skills Investment Planning

3. An Introduction to Skills Assessments

4. 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, Highlands and Islands Enterprise, Scottish Enterprise, the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development Group.
Purpose:
Support SFC, Regional Colleges, Strategic Bodies and College Boards in negotiating Regional Outcome Agreements (ROAs) for Academic Years
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

5. 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.

6. Scottish Skills Planning Model

7. What do they cover?
Economic Performance, Profile of the Workforce, People and Skills, Education and Training (Further and Higher Education, MAs and Schools), Other Economic Activity, Skills Mismatches and Forecasting
Underpinned by the 2016 data matrix of 7 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:
This slidepack provides a summary of the data for the area except for data on Further and Higher Education. The reason for this is provided on slide 15.

8. Local Authority Overview
High levels of economic activity in recent years due to construction activity and strong fisheries sector
Shortage of labour leading to import of temporary construction workers
Lerwick is a key employment location, including for some of Shetland’s isles
Local authority remains a very significant employer

9. Business Trends
In 2015 the business base grew by 5%, slightly lower than the national trend 7.3%
+65 businesses including: Agriculture (+25), Construction (+15) and Public Admin & Defence (+15)
Over 99% of businesses are small or micro (<50 employees), slightly above the national average (98%)
No businesses employ 250+ people
Business density slightly higher than the national level (608 per 10,000 population v. 313)
Self employment rate is below national figure (10.4% v. 10.8%)
In 2015, higher representation of Growth Sector businesses than at the national level
Much higher share of total employment is in Growth Sectors compared to Scotland (37% v. 28%) in 2015
Business base Dominated by Food and Drink sector, which accounts for 68% of all Growth Sector businesses in Shetland in 2015

10. Population and Projections
Population of 23,000 in 2015
Less than 1% of Scotland’s total population, unchanged over last year
Between 2005 and 2015 population grew by 4%, slightly lower than the national figure 5%
Growth driven by strong increase in 65+ age group
Population change
Forecast Population Growth, :
Total population forecast to increase, broadly in line with the national rate
Working age population projected to decline by 8%, faster than across Scotland (-4%)

11. Workforce Trends
Total employment in 2014 = 14,900 (+7.2% in 2014)
Growth over last year ( ): in the Highlands and Islands (3.4%), Scotland (3.2%) and GB (2.7%)
In 2015, 34% work in higher level occupations, below the Scotland average (42%)
Much lower share of employment in private sector than nationally (68% v.77%)
26% of the employed population work part time, in line with Scotland (26%)
8.2% of people in employment are in non-permanent jobs, higher than the national figure (5.4%)
Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.

12. Employment and Unemployment
The employment rate in Shetland was 87% in 2015, much higher than in Scotland 73%, and 6ppt up from previous year
Almost all residents work in their local authority area (98%)
Those working elsewhere mostly do so outside the Highlands and Islands -notably in Aberdeen City
Unemployment data for Shetland Islands is not available
97% of years olds in Shetland are participating in 2016, 7ppt above the Scottish rate. 2% are not participating, less than in Scotland (4%)

13. Qualifications and Earnings
At 48%, Shetland has a higher proportion of working age adults holding SCQF qualifications in 2015 at levels 7-12 than in Scotland (43%)
Workplace and resident earnings in Shetland are above the Scottish averages (both approximately £590 per week)

14. Modern Apprenticeships
Schools
Modern Apprenticeships
Education and Training
The secondary school roll in 2015 was 1, % of Scotland total
96% school leavers had a positive destination in 2015, compared to 92% nationally
MA uptake increased by 1% from 2014/15 to 140
1% of national total in 2015/16
Food and Drink is the most popular MA framework group
29% of uptake
Gender segregated - 83% male
81% achievement rate 2015/16
Fife

15. Further and Higher Education
Scotland’s colleges and universities play a major role in developing a skilled workforce. In the Highlands and Islands, the University of the Highlands and Islands (UHI) provides educational opportunities to residents and also attracts students to the region.
Due to the unique and complex tertiary nature of the University of Highlands and Islands, data for UHI and its associated campuses has not been included.
The Scottish Funding Council (SFC) and Skills Development Scotland (SDS) are working with UHI to develop the most appropriate way of presenting these complex data sets.

16. Jobs and Skills Changes (1)
Total employment (jobs) is forecast to decrease by 0.1% on average each year from 2016 to 2024, an equivalent rate of 0.2% growth is expected for Scotland as a whole. Such a fall equates to 100 less jobs in the region by Construction is expected to enjoy growth of 200jobs over the forecast. However such gains will be offset by falling employment within the public and manufacturing sectors. The number of jobs within both sectors is expected to fall by 200 jobs over the forecast.
Forecast Demand for Jobs ( )
Total Employment Growth
Shetland Islands Employment
% annual average change
Change in total jobs (‘000s),
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

17. Jobs and Skills Changes (2)
Replacement demand will result in 4,200 openings within the Shetland Islands over the forecast. Expansion demand is expected to create no new openings between Together with replacement demand, this will result in 4,200 openings over this period. Openings will be highest in professional and elementary occupations , with both driven by replacement demand. The total requirement for workers in skilled trade occupations is also expected to rise significantly over the period.
Forecast Demand for Jobs ( )
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

18. Implications for Skills Investment Planning

19. Shetland Islands: Key Implications (1).
Key Labour Market Changes and Dynamics
The strong jobs recovery in 2013 and 2014 in the Shetland Islands plateaued in 2015, in line with the Scotland level trend. The area suffered significant job losses following the global downturn until Although the jobs recovery since then has been good, the number of jobs is still 400 fewer than in 2009.
Although there was no net change in jobs in 2015 there have been some sector shifts. There were job increases in business administration & support (+300), health (+100) and in arts, recreation & other services (+100), where the Shetland Islands has a strength in creative industries. However, there were losses in transport & storage (-300), retail (-100) and accommodation & food services, in contrast to Scotland increases. Construction (linked to oil and gas) is a large employment sector, as is the public sector, where the Shetland Islands still has a reliance. There is under-representation in professional and related services.
The business base continues to grow, although at a rate below the Scotland average. Overall output also increased although modestly and output per worker remains below the Scotland average, reflecting sector composition. The challenge is to continue to diversify the economic base and to grow the higher value added services sector, capitalising on quality of life benefits and technology improvements.
Glasgow

20. Shetland Islands: Key Implications (2).
Skills demand and supply
Population growth has been slightly slower than the Scotland average over the last 10 years, although it is predicted to grow in line with the average to The working age population is however forecast to fall, as the population profile ages, and attracting and retaining young people continues to be a priority.
Far more in the Shetland Islands are employed in skilled trades than the Scotland average, where replacement demand for jobs will be strongest. The forecast 4,100 replacement jobs will also include a significant number of administration & secretarial jobs. Fewer are employed in professional occupations than the Scotland average, and there is a challenge to grow this proportion.
Almost 40% go into employment from school in the Shetland Islands, far higher than the national average.
The top MA frameworks by take-up largely reflect the local economy –food & drink, construction and engineering & energy.
Glasgow

21. Shetland Islands: Key Implications (3).
Recommended Areas of Focus
Priorities for the Shetland Islands include:
Increasing the number private sector jobs. Despite recent increases there are fewer jobs than There remains a reliance on the public sector.
Increasing the quality of and diversity of jobs. This will help broaden and strengthen the employment base, particularly higher value added professional services. There remains a strong dependency on oil and gas related jobs.
Creating a culture of employer investment. Employers continue to need to be encouraged to invest and innovate, which includes investment in skills. This should include investment in young people. There is also a need for an outward focus on new markets.
Meeting the skills needs of employers. There are important local sectors, including skilled trades, health, and creative industries. Local skills activity should continue to be focused on employer demand.
A need for progression routes and pathways. Demand for skills in the region is strongest amongst the skilled trades. Progression needs engendered and supported.
A need for flexible provision. Non traditional employment is increasing, and this means less conventional career paths, and movement between sectors. Skills provision must be equally flexible, with work-based learning routes part of this.
Glasgow