THE STATE OF THE LEEDS CITY REGION LABOUR MARKET 2014/15 CHALLENGES AND POTENTIAL

Transcription

1 THE STATE OF THE LEEDS CITY REGION LABOUR MARKET 2014/15 CHALLENGES AND POTENTIAL

2 CONTENTS 2 Labour Market Analysis 2014/15 1 The Oslo Manual OECD

3 CONTENTS 1. Foreword 4 2. Executive Summary 6 3. Introduction and Context 9 4. The Supply of Skills The Demand for Skills Alignment and Mismatch 69 Labour Market Analysis 2014/15 3

4 FOREWORD TITLE 4 Labour Market Analysis 2014/15

5 1 FOREWORD On behalf of the LEP and its Employment and Skills Panel, we are delighted to introduce this report, the LEP s fourth annual analysis of key labour market trends. It has been an exciting year so far for the LEP and our partners in the Leeds City Region Skills Network. As this report sets out, growth is back on the agenda in 2014 and the economy is showing positive trends. Our unemployment is down to pre-recession levels, NEETS are moving into employment, education and training and we ve also seen an increase in the number of young people studying STEM subjects. Our long-term skills ambition is to create a NEET-free City Region, with more and better jobs for our workforce. With our network of partners, the LEP has worked tirelessly over the last year and we have made significant progress on our ambition. We have submitted our highly ambitious but credible Strategic Economic Plan which has resulted in the LEP securing 573m from the government s Growth Fund - the largest Local Growth Deal settlement of any LEP area in the country. Developing a skilled and flexible workforce is central to our Growth Deal. We must go further and faster to attract the next generation of jobs to inspire prosperity for all and develop talent that is the envy of the world through our outstanding colleges and universities, and employer led investment in skills. With the support of members of the Skills Network, the LEP has been acknowledged as a national leader on the skills agenda and this has been recognised in our Local Growth Deal through the allocation of funding for a Skills Capital Programme. This will provide investment in skills facilities to support sectors that will generate the greatest contribution to economic growth and ensure a world-class learning environment for our young people. The publication of our Leeds City Region Skills Plan set out a clear direction of travel for the LEP over the next three years and beyond, and will enable the provision of skills and learning to meet the needs of the City Region s economic and labour market. However, despite our successes, we acknowledge our challenges and understand there is still more to be done particularly in increasing the number of Apprenticeships amongst young people and improving higher level skills in the workforce. Our City Region has a distinctive set of economic assets and we are confident that nowhere is better placed than Leeds City Region to tackle these challenges head-on. Our Labour Market Analysis is a key planning tool as we drive forward our growth ambitions. We hope you will read this year s analysis and reflect on its implications for your own contribution to our region s future prosperity. By working together to overcome our challenges and realise our potential, we are better equipped to seize the Leeds City Region s time for growth. Roger Marsh, Chair, LEP Board Stephanie Burras, Chair, LEP Employment and Skills Panel Chris Jones, Chair, Leeds City Region Skills Network Cllr David Green, Deputy Chair, LEP Employment and Skills Panel Labour Market Analysis 2014/15 5

6 EXECUTIVE SUMMARY

7 2 EXECUTIVE SUMMARY This report provides an update on the state of the Leeds City Region (LCR) labour market. It presents analysis on the supply of and demand for labour and places it within the wider economic context. It concludes by examining the extent to which there is a mismatch between supply and demand within the City Region in terms of the labour market. ECONOMIC CONTEXT Overall, the LCR economy grew by 6% over the last decade in terms of output, a similar rate to the increase in household disposable income. At the same time, growth in household spending outstripped growth in income in the City Region. The City Region s population grew by about 9% over the last decade and working-age population also grew by 11%, both outstripping the national average. Over the last year, economic activity rates improved at a much faster rate in LCR than the national average; the employment rate is also currently increasing faster than the national average. The City Region continues to have a number of notable industrial specialisms, especially in manufacturing. Of the top 20 sub-sectors in LCR, ranked by their degree of specialism, 14 are within the wider manufacturing sector. Overall, health, manufacturing, education and retail remain the largest sectors in the LCR economy when ranked by the amount of total employment. Unemployment has fallen sharply in LCR over the last 12 months, just as in the rest of Britain, but the rate of reduction has outstripped the national trend. However, both the JSA rate and International Labour Organisation rate (ILO) in LCR remain higher than the national average. Youth unemployment also fell sharply by around 3,600 people to 53,000 in the year to December 2013 and currently stands at 22% of year olds. SUPPLY OF LABOUR Positively, GCSE pass rates have continued to improve across LCR, although it remains of concern that rates in Leeds, Bradford and Barnsley districts lag the national average and have done so for several years now. On the plus side, the gap between the national average and these three districts has narrowed over the last decade. With regard to high level skills, the City Region stalled over the last 12 months after improving steadily over much of the last decade. The gap between LCR and the national average is not closing and the gap to London is even wider. Greater Manchester is also ahead of LCR by this measure. Closing this gap remains a vital priority for all concerned, given the links between higher qualifications and productivity, earnings and economic resilience. In Further Education, enrolments, starts and achievements all increased strongly in 2012/13. However, under-19 apprenticeship starts fell by 2,000 which is a concern. Science, health and social care plus sport, leisure and recreation were the most popular under-19 Sector Subject Areas (SSAs) in terms of starts. For adults, the most popular Sector Subject Areas were preparation for life and work, health and social care and crafts, creative arts and design. The Apprenticeship Vacancies Online System shows that the most popular sector for apprentices in LCR in terms of generating vacancies and attracting applications is business, administration and law. The sector accounted for 47% of the total vacancies and 42% of all applications. The overall ratio of applications to vacancies was 11 to one. This does not necessarily suggest a high demand for apprenticeships but possibly reflects multiple applications to multiple posts. In Higher Education (HE), overall enrolment within LCR universities fell by 8,500 (7%) in 2012/13. The only subject area with an increased intake was biological sciences. Education and business and administration studies suffered the largest falls in intake in absolute terms. Of all LCR residents within this graduate cohort (irrespective of where they attended university) about 77% (13,165) had secured employment within six months of graduation. Of these 9,713 (74%) were in professional level employment, broadly similar to the previous year. Of those that had secured employment (13,165), 72% were working in Yorkshire and Humber compared to 63% the previous year. Almost 7,000 of the 2012/13 graduates (53%) had secured employment in West Yorkshire, compared to 45% in the 2011/12 cohort. This shows that the labour market for high level skills in LCR has improved considerably since the recession. Labour Market Analysis 2014/15 7

8 DEMAND FOR LABOUR The latest forecasts from Experian show that the LCR economy is projected to expand by 48,000 net new FTE jobs by 2018, representing 4% of the 2013 total. The professional and other private services sector is forecast to contribute more than 22,000 of these new jobs. The latest UKCES Employer Skills Survey (ESS) suggests that there are almost 24,300 employment vacancies in LCR. Of these 22% were classed as hard-to-fill. Nationally, the hard-to-fill share was 29%. The survey showed that only 2 percent of LCR employers reported skills shortage vacancies whilst 12% reported skills gaps. Employers reported, via the ESS, that technical, practical and job specific skills were the most difficult to obtain from job applicants. Planning and organisation skills, customer handling skills and problem solving skills also ranked highly on the list. Overall, employers in LCR were very satisfied with the preparedness of new employees more so than the national average. The survey found that two out of three employers found that new 16 year old employees were not poorly prepared compared to 64% nationally. This rose to 90% of university graduates in LCR compared to 87% nationally. The latest Working Futures Series , estimates that 575,000 employment opportunities will be created in LCR via replacement demand with a further 62,000 new jobs created due to expansion in the economy by All occupations are projected to generate some employment opportunities due to replacement demand, particularly caring and personal occupations, admin occupations and elementary administrative and service occupations due to the high staff turnover in those fields of work. Overall, the evidence suggests that employers will demand greater qualifications and skill levels when vacancies are created. Positively, the proportion of the workforce with QCF 3 (A-level) and below is projected to shrink whilst those with QCF 4 (HE below degree level) and higher will increase as a share of the total. Occupations such as managers, directors and senior officials, professional occupations, associate professional and technical and caring, leisure and other service occupations are projected to increase as a share of the total workforce. Elementary, process, plant and machine operatives, admin and secretarial and skilled trades occupations are forecast to shrink as a share of employment. ALIGNMENT WITHIN KEY SECTORS 1 Taking all the available data together, in the short to medium term, there could be a higher ratio of qualified people to jobs in sectors like digital, creative and ICT, energy and low carbon. Potential oversupply scenarios in health and social care, hospitality and construction may be offset by forecast increases in demand and/or high churn rates of replacement demand which will provide opportunities for higher numbers in training in those areas. We also believe there could be an under-supply of labour in the short to medium term in manufacturing and finance and business services with transport and logistics closer to equilibrium. 8 Labour Market Analysis 2014/15 1. Please refer to Chapter 4 for further details of methodology and caveats.

9 INTRODUCTION AND CONTEXT

10 3 INTRODUCTION AND CONTEXT This report provides an update on the state of the Leeds City Region (LCR) labour market and recent trends. It presents an analysis of the supply of and demand for labour and places that within the wider economic context. Leeds City Region Enterprise Partnership s (LEP) Strategic Economic Plan (SEP), submitted to central government in Spring 2014, sets out its ambition to create a NEET-free City Region, with more and better jobs, and the skilled and flexible local workforce to sustain them. Considerable progress has already been made with the NEET-free City Region ambition agreed in the City Deal, and LCR now has aspirations to become a higher-skilled, higher-wage economy by tackling persistent underemployment and supporting people to gain the skills to help them get access to more and better jobs. The current Skills Plan focuses on three central themes, each with a distinct response to the challenges ahead and focused on delivering a better skilled, more productive and more prosperous City Region: building skills in education; transition into work; and raising demand and improving skills. In the period ahead the LEP intends to focus on the following priorities in terms of skills and the labour market: a skills capital investment programme to ensure that key sectors and sources of growth are supported by high quality skills and education facilities; a pioneering Skills Hub and Skills Fund Programme to address the skills issues of SMEs in sectors which present the greatest opportunities for economic and employment growth; initiatives to promote enterprise, entrepreneurship and innovation in young people; continued expansion of the City Region Apprenticeship Hub Plus Programme that provides a central local point of contact for free, independent and better co-ordinated advice and support on the benefits of apprenticeships to SMEs; labour market initiatives to extend the scope of the recently awarded Cabinet Office Youth Contract Head Start model and the proven Devolved Youth Contract; actively developing skills provision in readiness for high speed rail investment; and explore the opportunity for national centres of provision in the Advanced Engineering and Software Engineering to address the significant shortages experienced in these areas. THE LEEDS CITY REGION ECONOMY This section sets the context for the analysis to follow by examining recent economic and sectoral change in the LCR over the past decade, as well as the period since the end of the recession. It firstly considers the wider economy, before focusing on employment change and the types of industry in which the City Region has relative concentrations of employment, suggesting a degree of specialisation. Overall, the LCR economy grew by 6% over the last decade in terms of output, similar to the increase in household disposable income in the same period. However, as the table below shows, this growth lagged behind the national rates of 11% and 10% respectively. At the same time, growth in household spending outstripped growth in income in the City Region. LCR s population grew by about 9% over the last decade to more than 3 million in Working-age population grew by 11%. Both outstripped growth in the UK. However the growth in workforce jobs in the last decade continued to lag behind the UK average. 10 Labour Market Analysis 2014/15

11 FIGURE 1: SUMMARY ECONOMIC REVIEW OF LEEDS CITY REGION LCR UK (%) (%) Total output (GVA) ( bn) % 11% Workforce jobs (millions) % 6% Working age population (millions) % 7% Total population (millions) % 7% Household disposable income ( bn) % 10% Household spending ( bn) % 10% Source: Experian 2013 A brief analysis of changes in the headline economic indicators over the last 12 months shows that LCR is seeing some recovery from the recession. The table below shows that the economic activity rate and the employment rate both improved marginally over the last year and at a slower rate than the Great Britain average. FIGURE 2: A SNAPSHOT OF ECONOMIC ACTIVITY IN LEEDS CITY REGION, VARIABLE MONTH CHANGE No % No % LCR GB Economic Activity Economic activity rate - aged ,502, ,512, Employment rate - aged ,369, ,380, Economic Inactivity % who are economically inactive - aged , , % of economically inactive who want a job 107, , % of economically inactive who do not want a job 352, , Unemployment Unemployment rate - aged , , Source: ONS/ NOMIS 8 colour coding above green denotes where LCR has performed better than the national average and red is the opposite. Encouragingly, the proportion of the economically inactive population in LCR who want a job increased strongly in the year to December a faster rate of improvement than the national average. Labour Market Analysis 2014/15 11

12 The latest projections for the next decade 2 show that the LCR economy is expected to grow by 26%, similar to the national rate. Growth in workforce jobs and the population are also projected to match the national averages. However, growth in household income and spending are expected to lag behind national rates. FIGURE 3: HISTORIC SUMMARY ECONOMIC VIEW OF LEEDS CITY REGION VS. UK LCR (%) UK (%) Total output (GVA) ( bn) % 26% Workforce jobs (millions) % 8% Working age population (millions) % 8% Total population (millions) % 7% Household disposable income ( bn) % 22% Household spending ( bn) % 26% Source: Experian 2014 EMPLOYMENT CHANGE ACCORDING TO THE BUSINESS REGISTER AND EMPLOYMENT SURVEY (BRES), TOTAL EMPLOYMENT IN LCR FELL BY 17,700 (1%) BETWEEN 2010 AND THIS MATCHED THE TOTAL PERCENTAGE FALL NATIONALLY. HOWEVER, THE ECONOMY GREW STRONGLY THROUGH 2013 AND HAS REMAINED BUOYANT SO FAR IN 2014, SO IT IS EXPECTED THAT THE 2013 BRES RESULTS WILL SHOW SIGNIFICANT IMPROVEMENT IN THE LABOUR MARKET. FIGURE 4: EMPLOYMENT CHANGE CHANGE Number % Leeds City Region 1,298,400 1,280,800-17,400-1% Great Britain 27,671,600 27,872, ,900 1% Source: BRES 12 Labour Market Analysis 2014/15 2 Regional Economic Model 2014

13 The graph below shows how the employment rate in LCR has changed since the 2008 recession compared to the national rate. It shows that the LCR rate performed better (improved at a higher rate) than the national rate between 2008 and It then dipped at a faster rate following 2010, although it has recovered well since September 2012 and is now outperforming the national rate in terms of rate of improvement. FIGURE 5: CHANGE IN THE EMPLOYMENT RATE BASED ON 2008 LEVELS. (MARCH 2010= 100%) Source: NOMIS Leeds City Region Great Britain Labour Market Analysis 2014/15 13

14 The graph below sheds some more light on the changing nature of the labour market in the years following the 2008 recession, by comparing LCR to other LEP areas. Between 2009 and 2012, the number of part-time employees in LCR fell by almost 6%, compared to a 12% increase in London and a 6% increase in Greater Manchester. The Greater Birmingham and Solihull LEP area also recorded a 5% increase in part-time employment. Full-time employment also fell marginally in LCR over the same period. This compares favourably with Greater Manchester which saw a fall of more than 4% compared to a 0.4% increase in Greater Birmingham and Solihull and an almost 6% growth in London. So although it is widely accepted that the labour market coped reasonably well through the recession, it is also true that the nature of new job creation has varied across the country with LCR seeing less of the increase in part-time employment that has characterised other areas of the country. FIGURE 6: CHANGE IN EMPLOYMENT STATUS Source: ONS Leeds City Region Great Britain EMPLOYMENT IN KEY INDUSTRIAL SECTORS THE 2012 BRES DATA SHOWS THAT THE BIGGEST SECTOR IN THE LCR ECONOMY, BY SIZE OF EMPLOYMENT, IS HEALTHCARE. EVEN THOUGH THE SECTOR SHRANK BY ALMOST 5,000 EMPLOYEES SINCE 2010, IT REMAINS THE LARGEST SECTOR (BY SOME DISTANCE) HAVING ALMOST 40,000 EMPLOYEES MORE THAN MANUFACTURING WHICH IS THE SECOND LARGEST. OF THE BIGGER SECTORS, THE FASTEST GROWING WAS THE PROFESSIONAL, SCIENTIFIC AND TECHNICAL SECTOR WHICH GREW BY 22% BETWEEN TO OVER 93,000 EMPLOYEES. 14 Labour Market Analysis 2014/15

15 FIGURE 7: EMPLOYMENT CHANGE IN KEY SECTORS IN THE LEEDS CITY REGION INDUSTRY Healthcare Manufacturing Education Retail Business administration and support services Professional, scientific & technical Accommodation & food services Transport & storage Construction Public administration & defence Wholesale Arts, entertainment, recreation and other services Financial & insurance Information & communication Motor trades Mining, quarrying & utilities Property Agriculture, forestry & fishing Industry Total TOTAL EMPLOYMENT EMPLOYMENT CHANGE , , , , ,100 76,200 79,600 58,200 60,300 70,500 60,400 57,500 59,000 41,000 20,800 16,400 17,400 1,100 1,298, , , , ,400 99,400 93,200 76,900 62,200 60,100 58,900 58,600 55,800 55,100 40,400 21,600 16,800 16,400 1,800 1,280,800 No. -4, ,200-10,500-3,700 17,000-2,700 4, ,600-1,800-1,700-3, , ,600 % -3% 0% 2% -8% -4% 22% -3% 7% 0% -16% -3% -3% -7% -1% 4% 2% -6% 64% -1% Source: BRES/ ONS Unsurprisingly, Public Administration and Defence shrank by 16% between 2010 and 2012 (almost 12,000 people). Finance and Insurance also reduced headcount significantly by 7% (4,000 people). Labour Market Analysis 2014/15 15

16 SPECIALISATION The table below shows the level of specialisation in the LCR economy, using the Location Quotient (LQ) technique. This method measures the extent of local concentration of employment in each sector compared to national levels. It sets out a detailed breakdown by sector and confirms the importance of manufacturing in the City Region. OF THE TOP 20 SUB SECTORS IN TERMS OF SPECIALISATION, 14 ARE WITHIN THE MANUFACTURING SECTOR. LCR STILL HAS MORE THAN 3 TIMES THE AVERAGE EMPLOYMENT IN THE TEXTILES INDUSTRY (ALBEIT DOWN FROM THE 2010 LEVEL) AND MORE THAN TWICE THE EMPLOYMENT IN THE MANUFACTURE OF FURNITURE, COAL MINING AND PRINTING AND REPRODUCTION OF RECORDED MEDIA SUB SECTORS. LCR s strength in financial services is also apparent, although the degree of relative specialisation fell marginally between 2010 and FIGURE 8: EMPLOYMENT SPECIALISATION, , LEEDS CITY REGION VS GB. LQ SECTOR EMPLOYMENT Manufacture of textiles 8, Manufacture of furniture 7, Mining of coal and lignite Printing and reproduction of recorded media 10, Water collection, treatment and supply 2, Manufacture of machinery and equipment (not elsewhere classified) 15, Manufacture of wearing apparel 2, Manufacture of paper and paper products 4, Manufacture of beverages 2, Manufacture of electrical equipment 6, Manufacture of chemicals and chemical products 7, Publishing activities 11, Manufacture of other non-metallic mineral products 5, Manufacture of coke and refined petroleum products Security and investigation activities 12, Labour Market Analysis 2014/15

17 LQ SECTOR EMPLOYMENT Financial service activities, except insurance and pension funding 33, Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials 4, Manufacture of food products 20, Advertising and market research 10, Electricity, gas, steam and air conditioning supply 6, Libraries, archives, museums and other cultural activities 5, Warehousing and support activities for transportation 23, Land transport and transport via pipelines 26, Wholesale trade, except of motor vehicles and motorcycles 58, Other manufacturing 4, Civil engineering 10, Human health activities 105, Education 128, Gambling and betting activities 4, Manufacture of fabricated metal products, except machinery and equipment 14, Forestry and logging Sports activities and amusement and recreation activities 19, Architectural and engineering activities; technical testing and analysis 20, Employment activities 39, Construction of buildings 18, Other personal service activities 13, Manufacture of basic metals 3, Legal and accounting activities 29, Source: BRES Labour Market Analysis 2014/15 17

18 CONCLUSIONS This section of the report has set out a number of findings that provide vital context for the sections to follow. These include that: Overall, the LCR economy lagged behind the national growth rate (11%) over the last decade even though it expanded by 6%; Household spending grew at a faster rate than household income between 2003 and 2013; The City Region s population grew by about 9% over the last decade and working-age population also grew by 11%, both outstripping national growth rates; Over the last year, economic activity rates improved at a much faster rate than the national average. The employment rate is also currently increasing faster than nationally; The City Region continues to have a number of sector specialisms, especially in manufacturing. Of the top 20 sub-sectors in the LCR, ranked by degree of specialism, 14 are within the wider manufacturing sector; and Healthcare, manufacturing, education and retail remain the largest sectors in the LCR economy when ranked by total employment. 18 Labour Market Analysis 2014/15

19 THE SUPPLY OF SKILLS

20 4 THE SUPPLY OF SKILLS This section of the report analyses the local supply of skills of residents of LCR. It considers a number of perspectives. Firstly, it sets out the extent of local unemployment, including youth unemployment and NEETs to understand the extent of current slack in the labour market and potential availability of labour. It then analyses qualifications levels for both under 16s and adults to understand the current levels of skills in the local labour market. Finally, it considers current levels of the take-up of education and training opportunities including higher education, adult education and apprenticeships. UNEMPLOYMENT In the 12 months to April 2014, the number of male claimants in the LCR fell by more than 15,000. The number of female claimants also fell by 6,200 giving a combined total of over 21,000 people not claiming JSA. The overall claimant rate of 3.5% is still above the national average (2.7%). FIGURE 9: JOB SEEKERS ALLOWANCE (JSA) CLAIMANTS IN LEEDS CITY REGION MALE FEMALE TOTAL NUMBER RATE % NUMBER RATE % NUMBER RATE % APRIL 2013 Leeds City Region 58, , , GB 966, , ,474, APRIL 2014 Leeds City Region 43, , , GB 700, , ,086, Source: ONS YOUTH UNEMPLOYMENT HAS ALSO FALLEN SHARPLY IN THE CITY REGION OVER THE PAST YEAR AFTER A SUSTAINED RISE THROUGH THE RECESSION AND ITS AFTERMATH. IN THE 12 MONTHS TO MAY 2014, THE NUMBER OF YEAR OLD CLAIMANTS FELL FROM 24,070 TO 15,770, A 34% DROP. THAT MEANS THERE ARE 8,300 FEWER YEAR OLDS CLAIMING JSA IN THE LCR AND THE TREND SHOWS THAT THIS REDUCTION WILL CONTINUE OVER THE NEXT YEAR. THE YOUTH CLAIMANT RATE HAS FALLEN FROM 8% TO 5.2% OVER THE 12 MONTH PERIOD. THE RATE HAS FALLEN FASTER IN LCR THAN NATIONALLY. 20 Labour Market Analysis 2014/15

21 FIGURE 10: YOUTH JSA CLAIMANTS IN LEEDS CITY REGION MAY 2014 NUMBER RATE % 12 MONTH CHANGE GB 12 MONTH PERCENTAGE POINT CHANGE Aged , % -2.8pp -2.1pp Aged 18-24, claiming for over 6 months 6, % -1.3pp -1.0pp ILO Unemployment (16-24) 3 53, % Source: ONS The International Labour Organisation has a standard definition of unemployment which is used by most nations and is the globally comparable measure. Using that measure 4, there are 53,000 unemployed 16 to 24 year olds in LCR, representing 22% of all young people seeking and eligible for work. Over the last 12 months there has been a 0.8 percentage point fall in this rate (equivalent to 424 young people), similar to the fall at national level. This trend is expected to continue as the labour market recovers after years of economic stagnation. One of LCR s key ambitions is to create a NEET free LCR (young people not in education employment or training). NEET data collated and disseminated by the Department for Education focuses only on 16 to 18 year olds. Compared to 2012, the latest estimates for 2013 shows that there are just under 6, year old NEETs in LCR. This total represents 5.3% of the population for that age group and is less than the 2012 total by about 300 people, equivalent to a 0.3 percentage point decrease in the NEET rate. 3 in the 12 months to December The ILO measure of unemployment is measured through the Labour Force Survey and considers all economically active people who are seeking work or about to start Labour Market Analysis 2014/15 21

22 FIGURE 11: YEAR OLD NEETS IN LEEDS CITY REGION, YEAR OLDS NEET DIFFERENCE IN 2012 LOCAL EDUCATION AUTHORITY AREA ESTIMATED NUMBER % ESTIMATED NUMBER PERCENTAGE POINT DIFFERENCE Leeds 1, % Calderdale % Kirklees % Barnsley % Bradford % Wakefield % North Yorkshire* % York % LCR Average** 5, % Y&H average 10, % Notes: 2013 data are an average at the end of November 2013, December 2013 and January The age of the learner is measured at the beginning of the academic year, 31 August. The number and proportion of young people NEET has been adjusted using an established formula to assume a proportion of those whose records are no longer current are NEET. The formula used to estimate the number and proportion NEET, and guidance for local authorities on collecting the information used in these tables is contained in the NCCIS Management Information Requirement at Regional totals might not equal the sum of authorities in each region due to rounding. * The proportion of year olds whose current activity is not known is more than 50% above the England average of 9.2%. As a result, it is possible that the number and proportion NEET will be inaccurate. ** LCR Average includes all of the North Yorkshire County area because the County Council is responsible for education in that area and not the districts. 22 Labour Market Analysis 2014/15

23 The 18 to 24 year old JSA claimant data can be used as a proxy to measure the extent of NEETS (for that age group) but this does not capture the full cohort. The Office for National Statistics (ONS) has begun to produce some experimental data for year old NEETS. However, the quality of the data is such that LEP level information is not reliable. The graphs below show regional level NEET data from the first quarter of 2014 taken from that ONS database. It shows that the number of NEETs in Yorkshire and Humber represents 12% of the England total. In comparison, Y&H accounts for about 11% of the national population for this age cohort. According to the ONS, the number of year old NEETs in the region fell by 17% in the year to the first quarter of This drop backs up the reduction in youth claimants shown earlier and together they point to an improvement in the labour market for that age group. In absolute terms, the estimated total number of year old NEETs in the region was 88,000 in the first quarter of FIGURE 12: SHARE OF GREAT BRITAIN S NEETS ALONG WITH THE 12 MONTH CHANGE Source: ONS % share of England NEETs 12 Month % Change ALTHOUGH THE LCR RATE HAS REMAINED HIGHER, THE GAP HAS CLOSED SIGNIFICANTLY SINCE THE Q PEAK WHERE IT WAS 3.8 PERCENTAGE POINTS TO 0.4 PERCENTAGE POINTS AT LAST COUNT. IN FACT SINCE THE Q PEAK, THE NUMBER OF NEETS IN Y&H HAS FALLEN BY 59,000 PEOPLE - THAT IS MORE THAN ANY REGION IN ENGLAND, INCLUDING LONDON AND THE SOUTH. Labour Market Analysis 2014/15 23

24 FIGURE 13: YEAR OLD NEETS IN YORKSHIRE AND HUMBER ALONGSIDE ENGLAND England Yorkshire & Humber Source: ONS It is worth noting that the labour market has generally held up well through this recession when compared to previous downturns as the graph below shows. Remarkably, even though the 2008 recession was the deepest since the Great Depression, unemployment levels did not fall as sharply as would have been expected, especially when compared to previous recessions in the 1980 s and 1990 s. However, within the UK, there has been a variation in the levels of resilience with London and the South East performing very strongly and the Northern regions relatively weakly in comparison. FIGURE 14: PRE RECESSIONAL EMPLOYMENT PEAKS IN THE UK 1980 s 1990 s 2000 s Source: ONS 24 Labour Market Analysis 2014/15

25 QUALIFICATIONS All the local authority areas within LCR have seen improvements over the last 5 years in terms of the proportion of students achieving 5 or more A*- C grades, including English and Maths at GCSE. The graph below shows that York, Wakefield, Calderdale, North Yorkshire (this includes Craven, Harrogate and Selby as well as the rest of the North Yorkshire districts, as the education authority operates at county level) and Kirklees all exceeded the national average and have improved over the last few years, especially Wakefield. Leeds, Bradford and Barnsley lag behind even though they have also improved significantly. Given Leeds and Bradford s position as the key population centres in the City Region and home to a large and fast growing youth population, it is crucial that achievement levels improve. Most of the evidence points to the fact that the majority of new jobs over the next decade will require higher skills (this is discussed further in this report), which makes accelerating improvement in the achievement rate a key and urgent priority. FIGURE 15: 5+ A*- C GRADES INCLUDING ENGLISH AND MATHS GCSE 5+ A*-C INCLUDING ENGLISH AND MATHEMATICS 2008/9 2009/ / / /13 York Wakefield Calderdale North Yorkshire Kirklees Leeds Bradford Barnsley LCR Average* Yorkshire and the Humber England Source: ONS Negative Positive With regard to high level skills, LCR stalled over the last 12 months after improving steadily over much of the last decade as evidenced by the graph over the page. The gap between LCR and the national average is not closing and the gap to London is even wider. Greater Manchester is also ahead of LCR by this measure. Closing this gap remains a vital priority for all concerned given the links between higher qualifications and productivity, earnings and economic resilience. Labour Market Analysis 2014/15 25

26 FIGURE 16: CHANGE IN LEVEL 4+ QUALIFICATIONS (%) Source: ONS D2N2 = Derby, Derbyshire, Nottingham Nottinghamshire LEP The detail shows the economically active population in LCR has a similar qualification profile to the British average. The detail however shows that the proportion of the population with no or low level qualifications is higher than the national average. The reverse is true and starker at the high level skills end of the spectrum as shown in the graph below. FIGURE 17: GENERAL QUALIFICATIONS PROFILE OF THE ECONOMICALLY ACTIVE POPULATION IN LCR Source: ONS LCR GB 26 Labour Market Analysis 2014/15

27 According to the Labour Force Survey conducted by ONS, there were about 104,600 people within the economically active bracket in LCR with no qualifications at all. Five years ago (in 2008) this figure stood at 125,300, thus a fall of almost 21,000. The number of people with NVQ 1 only has also fallen by 34,300 in that five year period. In the same vein the number of the population with NVQ4 and above has risen by over 100,000 people in the period confirming the increasing emphasis on higher level skills within the LCR workforce. EDUCATION AND TRAINING The 2012/13 returns from the Data Service of the Skills Funding Agency (SFA) shows that levels of enrolments, starts and achievements all rose compared to the previous year. Enrolments increased by 5% in LCR, starts by 6% and achievements by 8%. This, whilst both significant and positive, is not as impressive as the previous year when the key measures increased by 9%, 7% and 10% respectively. This could however be due to a fall in the population of this cohort. FIGURE 18: ENROLMENTS, STARTS, ACHIEVEMENTS AND TRAINING IN LCR FURTHER EDUCATION Source: Skills Funding Agency 2008/ / / / /2013 Labour Market Analysis 2014/15 27

28 The graph below shows that the majority of young people pursued the education and training route in 2012/13. This accounted for 96% of all starts by under 19s in FE in the LCR. Apprenticeship starts for this age group actually fell in the last year from 10,145 to 8,289. FIGURE 19: YOUTH (UNDER 19) STREAMS, STARTS 2008/ /13 IN LEEDS CITY REGION Source: Skills Funding Agency Apprenticeships Others Education & Training Adult (SFA funded) starts have a greater mix, though education and training is still dominant, accounting for 69% of the 243,500 total in 2012/13. Adult Safeguarded Learning 5 accounted for 19% of the total in that year, considerably more than apprenticeships which only contributed 9% of the total as the graph below shows. FIGURE 20: ADULT (19+) STREAMS, STARTS 2008/ /13 IN LEEDS CITY REGION Source: Skills Funding Agency Others Adult Safeguard Learning Apprenticeships Education & Training 28 Labour Market Analysis 2014/15 5 Adult Safeguarded Learning includes Personal and Community Development Learning (PCDL), Neighbourhood Learning in Deprived Communities, Family Literacy, Language and Numeracy and Wider Family Learning

29 The graph below shows that youth starts at entry and level one, and at level three all increased in the 2012/13 academic year, compared to the previous year. Level two starts fell marginally. FIGURE 21: YOUTH STARTS BY LEVEL, 2008/ /13 Source: Skills Funding Agency Please note: the 2008/2009 Entry Level figures were not reported by the Skills Funding Agency. 2008/ / / / /2013 Labour Market Analysis 2014/15 29

30 Interestingly, adult starts at levels two and three fell in 2012/13 compared to the previous year but starts at entry level and level one rose in the same period. In absolute terms, entry level starts rose by almost 11,700 and level one and entry level by almost 20,900. However, the recent trend in level two falls continued with a decrease of more than 6,000 whilst level three starts also fell (marginally) by over 600. Overall, adult starts rose by almost 27,700, representing a 13% increase. FIGURE 22: ADULT STARTS BY LEVEL, 2008/ /13 Source: Skills Funding Agency Please note: the 2008/2009 Entry Level figures were not reported by the Skills Funding Agency. 2008/ / / / /2013 The chart on the next page shows the top ten youth starts by Sector Subject Areas (SSAs). Youth starts in Science topped the list with over 10,200 starts registered, an increase of almost 600 starts on the previous year. Health and Social Care, Sports, Leisure and Recreation and Languages, Literature and Culture of the British Isles were all in the top 5, as was Mathematics and Statistics. This is encouraging because these are subjects that policy makers are keen for young people to study in order to make a viable contribution to the economy. Significant falls were recorded in SSAs such as Preparation for Life and Work (-1830), Retail and Commercial Enterprise (-1280), Construction, Planning and the Built Environment (-420). Subjects which recorded an increase in starts in the last year were Transportation, Operations and Maintenance (740), Hospitality and Catering (735), Building and Construction (605), Science (590) and Health and Social Care (460). For adult starts, Preparation for Life and Work accounted for 21% of the total. Health and Social Care, Crafts, Creative Arts and Design and ICT for Users were also popular. Nursing Subjects and Vocations Allied to Medicine recorded an increase in starts of more than 2,500. ICT practitioners (1840), Health and Social Care (1710), Administration (1400) and Hospitality and Catering (1190) all recorded significant annual increases. SSAs which saw a drop in adult starts included Retail and Commercial Enterprise (-1,900), Construction, Planning and the Built Environment (-1450), Business, Administration and Law (-1300) and Warehousing and Distribution (-970). 30 Labour Market Analysis 2014/15

31 FIGURE 23: UNDER-19 STARTS IN EDUCATION AND TRAINING IN 2012/13 Source: Skills Funding Agency 2011/ /2013 % Change FIGURE 24: TOP 19+ STARTS IN 2012/13 Source: Skills Funding Agency 2011/ /2013 % Change Labour Market Analysis 2014/15 31

32 APPRENTICESHIPS The number of youth apprenticeship starts in LCR fell by 18% in 2012/13, compared to the previous year, to almost 8,300. This could be due to the fact that the population of this cohort fell compared to age groups. According the latest ONS (mid based) population estimates, the number of 17yr olds in LCR was 18,348, 18yr olds: 18,109 compared to 19yr olds: 21,860 and 20yr olds: 23,023. Adult apprenticeships on the other hand rose by 5% to 21,351 in the same period as the graph below shows. This is due largely to a change in funding criteria [Train to Gain was changed] which meant providers could sell training to companies as apprenticeships for currently employed staff and so in the returns from providers are recorded as apprenticeships. On the plus side the current workforce is receiving training/up skilling but the potential downside is that in most instances this has not necessarily created new employment/apprenticeship opportunities. FIGURE 25: APPRENTICESHIPS STARTS BY AGE CATEGORY Source: SFA Data Service 2011/ / Labour Market Analysis 2014/15

33 The increase in adult apprenticeships was driven by a 20% increase in advanced apprenticeships. Intermediate adult apprenticeships fell by 24% over the same period as shown in the graph below. FIGURE 26: APPRENTICESHIP STARTS BY LEVEL AND ANNUAL % CHANGE, 2011/12 AND 2012/13 Source: Skills Funding Agency *Please note that the data is too small to show on the graph but represents a 123% increase 2011/ /2013 % Change Labour Market Analysis 2014/15 33

34 When analysed by framework (or sector), 23% of all youth apprenticeship starts in 2012/13 were in Business Administration, up by 35% to almost 1,200. This was the most popular framework and it confirms what the Apprenticeship Vacancies Online System data (presented later) reveals that this framework/sector generated the most vacancies and the most applications. Starts in Engineering Manufacture increased by 13% and Hairdressing (12%) continuing to be popular among young apprentices, though down 3% on the previous year. IT Application Specialists remain the third most popular, but starts fell by 54% on the previous year. Children and Young People s Work (11%), Customer Services (9%) and Construction (9%) all made the top ten of the most popular frameworks (by start). FIGURE 27: TOP 10 YOUTH APPRENTICESHIPS, 2012/13 Source: SFA Data Service 2011/ /2013 % Change Adult apprenticeships on the other hand, were dominated by Health and Social Care which accounted for 28% of all starts and increased by 24% to over 4,300. Management (18%), Customer Service (15%) and Business Administration (12%) were also popular. 34 Labour Market Analysis 2014/15

35 FIGURE 28: TOP 10 ADULT APPRENTICESHIPS, 2012/13 Source: SFA Data Service 2011/ /2013 % Change Labour Market Analysis 2014/15 35

36 THE APPRENTICESHIP VACANCIES ONLINE SYSTEM The following graphs and tables are based on data from the Apprenticeship Vacancies Online System. It supplements the data on starts and learners and provides some insights on employment opportunities and the dynamics of the apprenticeship labour market. Given that the database uses a different source to the ILR based data presented earlier, it is important to remind readers not to directly compare the two datasets as the figures neither sum nor match. The key variables in the tables and graphs below are: Activated Candidates - the numbers of people who have registered on the system and activated their account during 2011/12 and 2012/13; Applications (candidate) - the number of online applications for vacancies made 2011/12 to 2012/13; Applications (vacancy) - the number of online applications for vacancies made 2011/12 to 2012/13; Vacancies Posted - the number of vacancies posted onto the system during 2011/12 and 2012/13. FIGURE 29: ACTIVATED CANDIDATES (APPRENTICESHIPS) BY AGE BAND 2011/12 AND 2012/13 Source: SFA Data Service Under 16 The total number of LCR resident candidates registering on the system increased from 28,478 in 2011/12 to 30,481 the following year. About 47% of the candidates are aged between 16 and 18 with 34% in the 19 to 24 year bracket. Of the applications submitted by candidates, 42% were to the Business, Administration and Law sector, a total of almost 26,000 applications. Retail and Commercial Enterprise also had more than 11,000 applications representing 18% of the total. Other highly subscribed sectors were Engineering and Manufacturing Technology (15%) and Health, Public Services and Care (11%). 36 Labour Market Analysis 2014/15

37 FIGURE 30: DISTRIBUTION OF 2012/13 APPLICATIONS BY SUBJECT NATURE Agriculture, Horticulture and Animal Care 853, 1% Arts, Media and Publishing 636, 1% Business, Administration and Law 25,858, 42% Construction, Planning and the Built Environment - 1,850, 3% Education and Training 330, 1% Health, Public Services and Care 6,766, 11% Information and Communication Technology - 4,358, 7% Leisure, Travel and Tourism 443, 1% Retail and Commercial Enterprise 11,245, 18% Science and Mathematics 3, 0% Engineering and Manufacturing Technologies , 15% Source: SFA Data Service It is no surprise that the sectors which advertised the most vacancies received the majority of applications. Business Administration and Law accounted for 47% of the vacancies posted on the system. This was followed by Retail and Commercial Enterprise (21%), Engineering and Manufacturing Technologies (11%) and Health, Public Services and Care (11%). FIGURE 31: DISTRIBUTION OF 2012/13 VACANCIES Agriculture, Horticulture and Animal Care 95, 1% Arts, Media and Publishing 51, 1% Business, Administration and Law 2,954, 47% Construction, Planning and the Built Environment - 190, 3% Education and Training 26, 0% Engineering and Manufacturing Technologies - 680, 11% Health, Public Services and Care 663, 11% Information and Communication Technologies - 281, 4% Leisure, Travel and Tourism 45, 1% Retail and Commercial Enterprise 1,292, 21% Source: SFA Data Service Overall, the ratio of applications to vacancies was about 11 to one - that is 11 applications to one vacancy on average. The most competitive was 16:1 in ICT and the least competitive (relatively) was in Retail and Commercial Enterprise at 9:1 as the graph over the page shows. Improving these ratios will increase the chances of young people in securing apprenticeships in LCR. It is worth noting though that although the data shows large numbers of applications per vacancy, they are in most instances multiple applications to multiple posts and again on many occasions candidates being unsuccessful for any post due to weak applications. Labour Market Analysis 2014/15 37

38 This database does not yet entirely reflect the number of unfilled apprenticeship vacancies across the City Region. It primarily covers businesses who have been approached regarding apprenticeships and who are holding open vacancies. A number of firms in the database do not fill the vacancies due to being discouraged about the benefits of apprenticeships as they either don t get any applications or the applications are of a poor quality (there are additional issues here around how/whether expectations can/should be managed and how candidates can be supported in preparing their applications). The National Apprenticeship Service (NAS), training providers and the LCR Apprenticeship Hub programme are currently holding a large amount of vacancies which are unfilled. The momentum gained so far needs to be maintained to encourage businesses, particularly SMEs, to create new apprenticeship vacancies but the current issue across LCR and nationally is the decreasing number of young people applying for apprenticeships and being successful in securing vacancies when they do apply. FIGURE 32: APPRENTICESHIP VACANCY TO APPLICATION RATIO Source: SFA Data Service 2012/ /2012 In terms of the level of apprenticeships posted, the majority were at the intermediate level. In 2012/13, intermediate apprenticeships accounted for 87% of all vacancies, down from 91% the previous year. The number and proportion of advanced apprenticeships increased in 2012/13 compared to the previous year as did higher apprenticeships. 38 Labour Market Analysis 2014/15

39 FIGURE 33 : LEVEL OF APPRENTICESHIP VACANCIES POSTED Source: SFA Data Service 2011/ /2013 Labour Market Analysis 2014/15 39

40 A breakdown of vacancies and candidates by local authority area shows the dominance of Leeds within the City Region. The district provided one-third of the candidates and 31% of the vacancies. York on the other hand accounted for only 3% of the candidates but 6% of the vacancies. This is not much of a surprise, given that young people in York are more likely to continue into higher and further education than most other districts in the City Region, given their GCSE and A Level achievement rates over the years. Wakefield was home to 13% of the candidates but only 9% of the vacancies. It is vital that apprentices (in particular young people) are supported, subsidised even, to travel to areas where there are more vacancies than candidates if this will make a difference to them securing and staying in employment. FIGURE 34: VACANCY TO CANDIDATE RELATION, BY LOCAL AUTHORITY AREA No. of Candidates (Outer) Barnsley Bradford Kirklees Leeds Calderdale Selby Craven Wakefield Vacancies by LA (Inner) Harrogate York Source: SFA Data Service HIGHER EDUCATION Enrolment into universities in the LCR fell by 7% in the 2012/13 academic year to 116,409 students. In terms of subject areas, the biggest fall was in Education where enrolment fell by more than 2,000 students. Business and Administrative Studies, Law, Social Studies and subjects allied to Medicine also suffered significant drops. Biological Studies was the only subject to record an increase in enrolment. Intake rose by more than 500 students, equivalent to a 5% increase on the previous year. This decrease might be directly related to the onset of tuition fees, but other factors such as changes in the overall population of the age cohort, the dynamics in the national labour market, the proportion of students that achieved the necessary grades and the fact that some students might be opting to take an apprenticeship or other option, instead of pursuing an academic route may explain it equally as much. 40 Labour Market Analysis 2014/15