LEEDS CITY REGION Labour Market Analysis 2013/14
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By Felix Kumi-Ampofo and Tanya Spakovica, Regional Economic Intelligence Unit, Leeds City Council Commissioned by the Leeds City Region Local Enterprise Partnership
Contents 1 Foreword 3 2 Executive Summary 4 3 Introduction and Context 7 4 The Supply of Skills into the Leeds City Region Labour Market 17 5 The Economy and Implications for Skills Demand 39 6 Mismatch and Alignment 53 The support and contribution of Sue Cooke and Nigel Guy (Leeds City Region), Louise Tearle and Michele Sutton (Leeds City Region Skills Network) and Joanne Beaumont and Daniel Penn (University of Bradford) and Ian McGregor Brown at HEART is especially acknowledged. LEEDS CITY REGION | Labour Market Analysis 2013/14 2
Foreword 1 As a LEP Board member and the Whilst this particular report does not set out to provide the incoming chair of the LEP’s answers to these questions, it does contribute some Employment & Skills Panel, I am meaningful intelligence to ensure that our choices and plans delighted to introduce this report, are well informed. the LEP’s third annual analysis of key labour market trends. As the report sets out, the economic outlook remains difficult and opportunities for addressing unemployment, especially Developed in partnership with the for young people, are limited. We must ensure that the public Leeds City Region Skills Network, led and private investment in vocational education is as focused by Michele Sutton, it is intended to be as possible on teaching high quality, relevant and transferable used by all the colleges, universities, skills which will equip our future workforce to compete employment & skills providers who successfully with the best in the world. Our City Region has plan their skills offer in response to distinctive strengths in the following sectors and we should both individual and employer demand. continue to encourage talent to grow and prosper, particularly in these fields of comparative opportunity: This Labour Market Analysis is a key ingredient in our Partnership • Finance and business services Agreement, as it focuses the debate • Manufacturing and engineering on the changing nature of the labour • Digital and creative industries market and prompts questions we all need to ask ourselves, such as • Bio-science and medical technology • Low Carbon and Environmental Industries • As a student, what course of study • Transport and logistics should I follow and what are my chances of getting a job in a On behalf of the LEP, its Employment & Skills Panel and the related field? Skills Network, we invite you to read this year’s rich body of analysis and to reflect on its implications for your own • As an education/training provider, contribution to our region’s future prosperity. how should my curriculum respond better to meet the changing nature of jobs in the economy? • As a business, how should I communicate my skills needs better to providers of vocational education and how can I get more involved in offering work experience to young people? Stephanie Burras Michele Sutton OBE CEO Ahead Partnership Principal and CEO, • As a teacher, how can I welcome Chair of LEP Employment Bradford College & Skills Panel Chair of the LCR Skills Network more business people into the classroom to ensure my students are well prepared for the world of work? 3 LEEDS CITY REGION | Labour Market Analysis 2013/14
Executive Summary 2 This report presents the state of the The City Region remains a key national centre for textiles Leeds City Region (LCR) labour and clothing – employment levels are 4.5 times and 2.3 market within the context of its times the national average respectively in these sectors economy. It shows the key supply and demand side challenges, the The Supply of Skills strengths and weaknesses and The latest population projections from ONS suggest that the prospects for growth. 0 to 10 population in LCR will grow by 13% over the next decade, below the England average (16%). Leeds and Context Bradford districts lead the way in absolute growth terms, Over the last ten years, Gross Value unsurprisingly. Selby district is projected to experience the Added (GVA) in LCR grew by 4% highest percentage growth in this age cohort (22%). similar to the growth of workforce Harrogate and Craven however, are expected to experience jobs in the economy. This is in contrast the least change; 5% and 6% respectively. to the 14% GVA growth and 5% An analysis of the February 2013 claimant count data shows workforce jobs growth enjoyed by the very little change over the last year, with the LCR Job Seekers UK economy over the last decade. Allowance claimant rate at 4.8% compared to 4.9% in the However, over the last 12 months, UK. There were almost 91,200 claimants in the city region at economic activity rates have picked the end of February 2013. up in LCR and outperformed the national average. GCSE and Higher Education According to the Business Register LCR districts have continued to improve GCSE attainment Employment Survey, published by the levels over the last decade. However, there still remains a Office for National Statistics, total substantial gap between the best and worst performers. In employment in LCR in 2011 stood at 2005/6, only 31% of students in Barnsley achieved 5+ A*-C 1.3m. Health, manufacturing and grades (including maths and English), compared to 54% in retail remain the largest employers in North Yorkshire – a gap of 23 percentage points. By 2011/12, the city region. Transport and storage this gap had only shrunk to 20 percentage points. Of the and health created the most new jobs eight Local Education Authorities that make up LCR, four in the period between 2008 and 2011. remain below the national average (although Wakefield is Construction and accommodation and now only very marginally below) and three remain below the food services, lost the most jobs in LCR average, in terms of GCSE achievement. These are that same period. Barnsley, Bradford and Leeds. Given that the Leeds and The BRES data further suggests that Bradford districts have 45% of the youth population (0-19) LCR economy has strong specialisms in in LCR, their continued under-achievement should remain a key sectors like manufacturing, finance, concern, despite the continued improvement. transport and storage and wholesale. The proportion of the population with NVQ4+ qualifications (or LCR’s manufacturing employment in equivalent) has increased from 33% in 2008 to 39% in 2012 in 2011 (138,000) was higher than any Britain. In LCR, the highly qualified population has increased other LEP area in England. from 30% to 35% (representing 465,300 people) since 2007. LEEDS CITY REGION | Labour Market Analysis 2013/14 4
2 This improvement, whilst Adult intermediate apprenticeships increased by 145% over commendable, still lags the the period whilst adult advanced apprenticeships rose by national average. 85%. Increases in youth apprenticeships were much more muted in comparison. FE HE In total, there were 190,158 starts in 2010/11 in the under 19 category in Business Administration and subjects allied to Medicine are FE. Healthcare and Creative and the most popular courses in Higher Education (HE) in LCR Cultural studies attracted the most according to data from the Higher Education Statistics starts. Hair and Beauty also continues Authority. These accounted for 13% each of total to be popular. It is an accessible enrolments in 2011/12. Social Studies and Languages also course for some students who might proved popular. otherwise not engage with further The latest data from the annual Destination of Leavers in education. However, the LCR Higher Education (DLHE) survey shows that 62% of the economy will require a greater 2010/11 graduate cohort from LCR Higher Education proportion of highly skilled labour in Institutions (HEI) had secured graduate level employment the workforce to improve its within 6 months of their summer graduations, compared to competiveness. This though should 61% the previous year. not be at the expense of entry level opportunities. NEETs Amongst the 19+ age group there were LCR has a lower NEET rate than Greater Manchester and the 95,000 starts in FE. Healthcare (13%), Yorkshire average. As part of the City Deal with central Business IT and Telecoms (13%) were government, the city region has set itself an ambition to the most popular in terms of starts, drive down the NEETs rate over the medium term. followed by Adult Social Care (11%). In absolute terms the number of NEETs in LCR was Between 2009/10 and 2010/11, overall estimated to be 5,809 in December 2012. A year before apprenticeship starts increased by then, the estimate was 7,333. 65% due almost exclusively to the sharp rise (119%) in adult The Demand for Skills apprenticeships over that period driven by government policy. It is worth In the medium term, the LCR economy is forecast to create noting though that overall almost 45,000 new FTE jobs, according to the Regional participation in FE and training actually Econometric Model (REM). Administrative and support fell during this period. The impact of services, land transport, storage and post and professional this policy has been to “shift” adult services are forecast to create the most jobs, followed by training from Train to Gain to retail, accommodation and food services and finance. These Apprenticeships as opposed to actually new jobs constitute an expansionary demand for labour, increasing overall participation. arising due to these sectors growing bigger within the LCR economy and requiring further human resources. 5 LEEDS CITY REGION | Labour Market Analysis 2013/14
2 All occupations are forecast to require Alignment and Mismatch significant replacement of labour over the next decade due to retirements. In Overall, six of the nine key sectors assessed are the period from 2010 to 2020, a total over-represented on the supply side to varying extents. of 567,000 job opportunities are These are hospitality, health and social care, digital and expected to occur in LCR due to creative, ICT, low carbon and environmental industries and replacement demand. When construction. This suggests that proportionally, there are compared to the 50,000 expansion more people studying courses related to these sectors than demand opportunities, the scale the sector’s share of the workforce. The other three sectors becomes apparent (UKCES, Working are over-represented on the demand side. These are Futures, 2012) manufacturing, finance and business services and logistics and transport. The occupational profile in LCR is forecast to undergo significant change Despite the limitations of the available data and the approach over the next decade. This will be employed, this will hopefully provide students, careers characterised largely by continued advisers and policy makers with some useful information growth in high human contact about these sectors and the opportunities available. occupations like Sales and Customer Service and Caring as well as strong growth in high skilled occupations like Managers and Directors, Professional Occupations and Associate professional. Lower skilled occupations like Elementary and Process Plant operatives are forecast to shrink as a share of the labour force. LEEDS CITY REGION | Labour Market Analysis 2013/14 6
Introduction and Context 3 This report presents the state of the Leeds City Region (LCR) labour market within the context of its economy. It shows the key supply and demand side challenges, the strengths and weaknesses and prospects for growth. Furthermore, the report discusses the relative performance of the labour market compared with LCR’s peers and ends with an illustration of the extent of possible alignment and mismatches in the supply of and demand for skills. The Leeds City Region economy is undergoing significant change, in line with the rest of the UK, as it emerges from the current economic malaise. UK central government remains faithful to its key economic plan to reduce the deficit, reduce public sector expenditure and boost the private sector. The Government’s skills strategy (Skills for Sustainable Growth and Investing in Skills for Sustainable Growth) published in November 2010 was founded on the “Coalition’s principles of fairness, responsibility and freedom”. The strategy focuses heavily on promoting apprenticeships and some of the key policy announcements included: • Expanding the numbers of adult (19+) apprenticeships available by up to 75,000 by 2014-15 and increasing funding for adult Apprenticeships by up to £250m over the Spending Review period • Reshaping apprenticeships so Level 3 becomes the level to which learners and employers should aspire. • Ensuring there are clear routes from apprenticeships to higher level training including, but not exclusively, Level 4 Apprenticeships. The Leeds City Region Economic Picture - Current Over the last ten years, Gross Value Added (GVA) in LCR grew by 4% similar to the number of workforce jobs in the economy as figure 1 below shows. This is in contrast to the 14% GVA growth and 5% workforce jobs growth enjoyed by the UK economy over the last decade. LCR underperformed when compared to the national average and the implications are more pronounced when population data is analysed over the same period. The city region’s population grew strongly (9%) compared to the UK (7%) over the last decade. Working-age population however grew at twice the national average (12%: UK – 6%). Such population growth, fuelled by strong growth in net in-migration, puts the need for a job creation boost into sharp focus and underlines the scale of the challenge facing policy makers in the City Region. Fig 1: Summary Economic View of LCR 2002 2012 % Change % Change 2002-2012 2002-2012 UK Total Output (GVA) (£bn) 49.2 51.3 4% 14% Total Workforce jobs (Millions) 1.4 1.5 4% 5% Working age population (Millions) 1.7 1.9 12% 6% Total population (Millions) 2.8 3.0 9% 7% Household disposable Income (£bn CVM) 36.1 38.2 6% 10% Household spending (£bn) 33.2 37.0 12% 10% Source: Experian 2012 7 LEEDS CITY REGION | Labour Market Analysis 2013/14
3 Economic activity rates have been falling since the 2008 recession but over the last 12 months, there has been a marked improvement in LCR compared to the UK average as shown below. Fig 2: A snapshot of Economic Activity in the LCR, 2011-2012 Variable 2011 Oct 2011-Sep 2012 12 Month Change Number % Number % LCR UK Economic Activity Economic activity rate - aged 16-64 1,463,300 74.8 1,484,900 75.8 1.0 0.6 Employment rate - aged 16-64 1,320,800 67.5 1,352,800 69 2 0.5 Economic Inactivity % who are economically inactive - 492,100 25.2 474,900 24.2 -1.0 -0.6 aged 16-64 % of economically inactive who 101,500 20.6 106,100 22.3 1.7 0.5 want a job % of economically inactive who 390,600 79.4 368,900 77.7 -1.7 -0.5 do not want a job Unemployment Unemployment rate - aged 16-64 142,500 9.7 132,100 8.9 -0.8 0.1 Source: NOMIS 2013 The Leeds City Region Economic Picture - Forecast The LCR economy is forecast to grow by 23% in GVA terms over the next decade as depicted in figure 3 below. Full Time Employment is also forecast to grow by 10% over the same period. Household spending and disposable income are also forecast to grow strongly. These forecasts are however subject to change depending on how quickly the UK economy recovers and whether LCR is able to take advantage of the opportunities that will arise. LEEDS CITY REGION | Labour Market Analysis 2013/14 8
3 Fig 3: Summary Economic View of LCR 2002 % Change % Change 2002-2012 2002-2012 UK Total Output (GVA) (£bn) 62.9 23% 24% Total Workforce Jobs (Millions) 1.6 7% 7% Working age population (Millions) 2.1 8% 10% Total population (Millions) 3.2 7% 8% Household disposable Income (£bn) 46.3 21% 23% Household spending (£bn) 45.0 22% 25% Source: Experian 2012 Performance of Leeds City Region Labour Market through Recession (Using Business Register of Employment Survey from ONS) Total employment in Leeds City Region, 2008-11 Total employment in LCR in 2011 stood at 1.3m. Against the backdrop of the recession, this is a drop of 39,000 (-2.9%) since 2008, very similar to the total decline of 3% across Great Britain as a whole (see figure 4 below). There was a small fall of 1,600 ( 0.1%) over the last year, which was again in line with the GB (-0.2%). Fig 4: Employment Change, 2008-2011 Change, 2010-11 Change, 2008-11 Number % Change Number % Change Leeds City Region -1,600 -0.1% -38,800 -2.9% Great Britain -46,900 -0.2% -859,000 -3.0% Source: Office for National Statistics Figure 5 shows the pattern of change over time since 2008. LCR had a substantially smaller drop in 2009 than the national average, but this was followed by a much sharper fall in 2010. 9 LEEDS CITY REGION | Labour Market Analysis 2013/14
3 Fig 5: Employment Change, 2008-11 Source: Office for National Statistics Leeds City Region Great Britain Employment in the main industries in Leeds City Region Of the 17 sectors shown in figure 6, health is the biggest in LCR, with a 2011 total of 164,000, or 12.6% of all City Region employment. Other major employers include manufacturing (138,000, or 10.6%), retail (130,000, or 9.9%), education (127,000, or 9.7%) and business administration & support services (102,000, or 7.8%). The two sectors that created the most new jobs between 2008 and 2011 were transport & storage (+12,900, or +22%) and health (+12,900, or +9%). The only other industries to expand significantly were mining, quarrying & utilities (+4,700 jobs, or +40%) and professional, scientific & technical services (+2,600, or +3%). The fastest growing industry in percentage terms was mining, quarrying & utilities. The greatest number of job losses was in construction (-13,300 jobs or -18%), followed by accommodation & food services (-12,900 jobs, or -14%). Manufacturing (-9,500 jobs, or -6%), education (-9,200 jobs or -7%) and retail (-8,100 jobs or -6%) also suffered substantial job losses. Financial & insurance services lost 9% of its 2008 employment (6,000 jobs), while the property services sector suffered the biggest percentage drop in employment of any of the major sectors (-22%, or -5,100 jobs). LEEDS CITY REGION | Labour Market Analysis 2013/14 10
3 Fig 6: Employment change in LCR by industry, 2008-11 Industry Total Employment Employment Change, 2008-2011 2008 2011 No. % Mining, quarrying & utilities 11,600 16,300 4,700 40.3% Manufacturing 147,300 137,700 -9,500 -6.5% Construction 75,900 62,600 -13,300 -17.6% Motor trades 25,800 26,500 700 2.7% Wholesale 65,300 62,900 -2,400 -3.7% Retail 137,000 128,900 -8,100 -5.9% Transport & storage 59,500 72,400 12,900 21.7% Accomm/food services 91,100 78,200 -12,900 -14.2% Info & communications 40,900 40,200 -600 -1.6% Finance & insurance 66,200 60,300 -6,000 -9.0% Property 22,900 17,800 -5,100 -22.1% Prof, scientific & technical 86,900 89,400 2,600 3.0% Business admin/support 103,100 101,500 -1,600 -1.5% Public admin & defence 65,500 63,600 -1,900 -2.9% Education 135,800 126,600 -9,200 -6.8% Health 151,300 164,200 12,900 8.5% Arts, rec, other services 53,500 52,600 -900 -1.6% All industries 1,340,900 1,302,200 -38,800 -2.9% Source: Office for National Statistics Comparisons with Employment Change in GB Looking at the proportion of total employment in each of these industries in LCR and GB, the structure of the City Region economy is broadly similar to that of the country as a whole. LCR has higher shares in manufacturing, transport & storage, wholesale, education and financial services and below-average shares in several service industries, including accommodation & food, information & communications, and professional, scientific & technical services. 11 LEEDS CITY REGION | Labour Market Analysis 2013/14
3 However, the pattern of change by industry since 2008 has differed substantially from the national average in a number of sectors. Those industries in which LCR has performed substantially better than the rest of GB include: • mining, quarrying & utilities (a 40% increase locally compared to 16% nationally) • transport & storage (+22% in LCR against -3%) • motor trades (+3% against -4%) • business administration & support services (-2% against -7%) • manufacturing (-6% in LCR compared to -9%) • professional, scientific & technical services (+3% against no change) Conversely, the City Region performed less well than GB in the following industries: • property services (-22% in LCR compared to +5% nationally) • accommodation & food services (-14% against -3%) • education (-7% against -1%) • retail (-6% in LCR compared to -3% across GB) • construction (-18% against -15%) At this point, it is worth noting that nationally, the labour market has performed remarkably well throughout this economic downturn - especially over the last 12 months. Despite very sluggish – if not non-existent - GDP growth, employment levels have increased. This implies that productivity is falling. The reasons for this are varied but not explored in this review. Industrial specialisation in Leeds City Region An alternative measure of the significance of individual industries is the level of employment ‘specialisation’ that exists in LCR in comparison to the GB average. This is measured by comparing the share of total jobs in a particular industry within LCR to that industry’s national share. For example, if a sector has a specialisation figure of 200, that means it has twice as big a proportion of local employment as the national average. Conversely, a score of 50 means that an industry is only half as important to the City Region as it is nationally. This way of looking at specialisation is important, since it enables us to identify those key sectors in the local economy that comprise only a small proportion of total employment, but which form a significant part of the national total in that industry. Figure 7 shows the specialisation scores for the 17 principal industries highlighted in earlier tables, and also how these have changed between 2008 and 2011. Among these industries, there are four that have at least 20% more jobs in LCR than the national average: manufacturing, transport & storage, financial & insurance services and wholesale activities. Between 2008 and 2011, transport & storage experienced a dramatic increase in its specialisation score, having been similar to the national average at the start of the period. The other sectors saw relatively little change in their specialisation levels from 2008. LEEDS CITY REGION | Labour Market Analysis 2013/14 12
3 There are four industries that have employment levels at less than 90% of the national average: information & communication services, property services, accommodation & food services and arts, recreational & other services. Specialisation levels in both accommodation & food services and in property services dropped sharply between 2008 and 2011. Mining was the other sector to experience a significant move in specialisation, with an increase from 83% of national levels in 2008 to equal the GB average by 2011. Fig 7: Specialisation by industry in LCR Employment Specialisation scores (GB average = 100) in 2011 2008 2011 Manufacturing 137,700 121 124 Transport & storage 72,400 98 123 Financial & insurance 60,300 125 122 Wholesale 62,900 117 120 Motor trades 26,500 104 112 Education 126,600 115 107 Mining, quarrying & utilities 16,300 83 100 Construction 62,600 103 100 Health 164,200 96 98 Public admin & defence 63,600 97 98 Business admin/support 101,500 93 98 Retail 128,900 99 96 Prof, scientific & technical 89,400 89 92 Arts, rec, other services 52,600 87 88 Accomm/food services 78,200 99 88 Property 17,800 112 83 Info & communications 40,200 81 81 All industries 1,302,200 100 100 Office for National Statistics; LCR calculations 13 LEEDS CITY REGION | Labour Market Analysis 2013/14
3 A much clearer insight into the sectors in which the City Region has a strong national specialisation emerges from analysis of a more detailed industrial breakdown. Figure 8 below uses a classification of employment into 85 separate industries, and shows the 22 sectors in which LCR has specialisation scores of at least 20% above the national average. Fig 8: Employment specialisation in LCR – detailed industrial breakdown Employment Specialisation scores (GB average = 100) in 2011 2008 2011 Manufacture of textiles 11,200 346 455 Manufacture of furniture 10,200 219 290 Mining of coal & lignite 700 282 236 Manufacture of wearing apparel 3,100 105 230 Manufacture of other non-metallic 7,800 158 197 mineral products Veterinary activities 4,200 54 185 Publishing activities 11,300 176 178 Water collection, treatment & supply 2,200 119 166 Printing & reproduction of recorded media 8,600 153 150 Manufacture of paper & paper products 3,700 119 147 Manufacture of beverages 2,400 183 144 Manufacture of coke & refined 600 113 143 petroleum products Financial service activities, except 34,500 144 140 insurance & pension funding Warehousing & support activities 26,600 94 139 for transportation Remediation activities & other 200 130 134 waste management services Manufacture of electrical equipment 5,600 82 133 Manufacture of other machinery & equipment 11,400 162 131 Manufacture of chemicals & chemical products 6,300 130 131 LEEDS CITY REGION | Labour Market Analysis 2013/14 14
3 Manufacture of food products 21,000 132 131 Electricity, gas, steam & 6,800 101 127 air conditioning supply Land transport & transport via pipelines 30,900 118 126 Wholesale trade, except of motor 62,900 117 120 vehicles and motorcycles Source: Office for National Statistics; LCR calculations Some of the key points arising from this table include: • the City Region remains a key national centre for textiles and clothing – employment levels are 4.5 times and 2.3 times the national average respectively in these sectors • publishing and printing are strong activities locally, also perhaps associated with the high levels of paper manufacturing • other manufacturing sectors in which LCR is strong include furniture, food, drinks, non-metallic minerals, electrical and other equipment, and chemicals • despite job losses since 2008, there remains 40% more employment in financial services (banking and building societies) than the GB average • there are also specialisations in water supply, waste management and energy supply • the City Region is also a logistics centre, with strong specialisations in wholesale and warehousing Leeds City Region industrial structure compared to other LEP areas Leeds City Region is one of 39 LEP areas in England. Looking at how LCR compares to the others: • with 1.3m jobs, LCR is the 3rd largest behind the London and South East LEP areas • only three LEP areas enjoyed employment growth between 2008-11 (Gloucestershire, Cornwall & the Isles of Scilly and Oxfordshire). LCR’s rate of job loss over the period ( 2.9%) was ranked 21st of the 39 areas • LCR's manufacturing employment in 2011 (138,000) was higher than any other LEP area, this represented 10.6% of total employment • the 60,000 workforce in financial services placed LCR 2nd behind only London, and 6th of the 39 LEP areas in terms of the proportion employed in that sector (4.6%) • LCR had 269,000 people working in business services as a whole (including financial services), the 3rd highest number behind London and Greater Manchester LEP areas. This represented 20.7% of total employment. • there were 89,000 employed in professional services in LCR in 2011, 6.9% of the total. This placed LCR 4th of 39 areas in terms of total jobs 15 LEEDS CITY REGION | Labour Market Analysis 2013/14
3 Conclusions • Over the last decade, the LCR economy performed strongly but still lagged the UK average across many key indicators like GVA and employment. • However, over the last 12 months, economic activity rates have picked up in LCR and outperformed the national average. • According to BRES, produced by ONS, health, manufacturing and retail remain the largest employers in the city region. Transport and storage and health created the most new jobs in the period between 2008 and 2011. Construction and accommodation and food services, lost the most jobs in that same period. • The LCR economy has strong specialisms in key sectors like manufacturing, finance, transport and storage and wholesale. • LCR’s manufacturing employment in 2011 (138,000) was higher than any other LEP area in England. • The City Region remains a key national centre for textiles and clothing – employment levels are 4.5 times and 2.3 times the national average respectively in these sectors LEEDS CITY REGION | Labour Market Analysis 2013/14 16
The Supply of Skills 4 This chapter looks at the supply of skills into the LCR labour market and economy. It considers changes in population, unemployment and qualifications and assesses the changing skills profile of the city region labour force. Population The latest population projections from ONS suggest that the 0 to 10 population in LCR will grow by 13% over the next decade, just below the England average (16%). Leeds, Bradford and Kirklees districts lead the way in absolute terms, with projected total growth of 32,000 representing 61% of the total. In percentage terms, Selby of projected to experience the highest growth rate (22%) with Harrogate and Craven witnessing the least; 5% and 6% respectively as figure 9 below show. Figure 9: Forecast change in 0-10 year group in LCR, 2011 - 2021 Craven Harrogate York Selby Barnsley Calderdale Wakefield Kirklees Bradford Leeds Source: ONS Sub-National Population Projections Absolute Change % Change 17 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Figure 10 shows that eight of the ten districts that make up the City Region will have fewer teenagers by the next decade compared to present levels. Bradford, however, is forecast to experience a 3% increase in the same age group over that period. . Figure 10: Forecast change in 11-20 year group in LCR, 2011–2021 Wakefield Barnsley Harrogate Kirklees Craven Calderdale York Selby Leeds Bradford Source: ONS Sub-National Population Projections Absolute Change % Change Together, figures 9 and 10 suggest strong growth in the youth population over the next decade although the number of teenagers is expected to fall. These projections are based on the 2011 census. Unemployment The latest claimant count data shows very little change over the last year, with LCR Job Seekers Allowance (JSA) claimant rate at 4.8% compared to 4.9% in the UK. There were almost 91,200 claimants in the city region, as at the end of February 2013. LEEDS CITY REGION | Labour Market Analysis 2013/14 18
4 Figure 11: Job Seekers Allowance Claimants in LCR Male Female Total Number Rate% Number Rate% Rate% February 2012 Leeds City Region 63,326 6.6 28,317 2.9 4.8 UK 1,141,242 5.6 544,747 2.7 4.1 February 2013 Leeds City Region 61,125 6.4 30,061 3.1 4.8 UK 1,065,990 5.2 547,799 2.7 4.9 Source: NOMIS 2012 The plight of younger people with regards to their employment prospects has attracted great attention throughout the economic downturn. Figure 12 below shows that even though this remains a key issue in LCR, there has been some relative improvement over the last 12 months. Figure 12: Youth Job Seekers Allowance Claimants in LCR February 2013 Male Female Total No. % 12 month No. % 12 month No. % 12 month UK 12 change change month change Youth Claimants Aged 18-24 17,430 11.8 -1.3% 8,915 6.0 -0.2% 26,345 8.9 -0.7% -1.2% Aged 18-24, claiming 6,005 4.1 0% 3,070 2 0.1% 9,075 3.1 0.1% -0.2% for over 6 months All Claimants Claiming for over 61, 17,835 1.9 0.6% 7,290 0.8 0.3% 25,120 1.3 0.4% 0.3% 12 months Claiming for over 9,735 1.0 -0.5% 5,585 0.6 -0.1% 15,320 0.8 -0.3% -0.3% 6 months Source: NOMIS 2012 19 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 The proportion of youth claimants (18 and 24 age group) is 29%, which is the same as it was 12 months ago. Male youth claimants in LCR have fallen by 1.9% during this period. Overall, long-term claimants (claiming for over 12 months) have risen by 2.9% over the last 12 months. This remains a critical issue for the city region especially given the impending changes to the benefits system. GCSE Performance LCR districts have continued to improve GCSE attainment levels over the last decade. However, there still remains a substantial gap between the best and worst performers. In 2005/6, only 31% of students in Barnsley achieved 5+ A*-C grades (including maths and English), compared to 54% in North Yorkshire – a gap of 23 percentage points. By 2011/12, this gap had only shrunk to 20 percentage points as figure 13 below shows. Figure 13: 5+ A*-C grades inc. English & Mathematics GCSEs 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 Barnsley 30.7 31.5 33.1 39.3 40.2 44.4 45.3 Bradford 34.0 36.3 36.9 41.6 44.4 47.5 52.4 Calderdale 43.8 45.7 50.3 50.6 54.5 59.4 61.1 Kirklees 40.8 42.8 45.6 47.4 52.8 59.3 62.0 Leeds 40.4 42.1 46.4 45.9 50.6 53.7 55.0 North Yorkshire 53.5 54.2 54.7 58.6 61.6 63.2 65.6 Wakefield 42.9 46.5 51.3 49.3 55.8 57.4 59.3 York 48.8 54.5 53.8 59.2 59.1 62.1 62.7 LCR Average* 41.9 44.2 46.5 49.0 52.4 55.9 57.9 Yorkshire and Humber 40.3 42.5 44.4 47.3 52.0 54.6 57.3 England 45.6 46.3 47.6 49.8 53.5 59.0 59.4 Source: Department for Education Statistics, 2013 *This includes all of North Yorkshire Of the eight Local Education Authorities that make up LCR, four remain below the national average (although Wakefield is now only very marginally below) and three remain below the LCR average, in terms of GCSE achievement. These are Barnsley, Bradford and Leeds. Given that the Leeds and Bradford districts have 45% of the youth population (0-19) in LCR, their continued under-achievement should remain a concern, despite the continued improvement. LEEDS CITY REGION | Labour Market Analysis 2013/14 20
4 Higher Level Qualifications Since the Leitch Review reported in 2006, considerable policy attention has been focused on increasing the proportion of the working-age population with high level skills. In Britain, the proportion of the population with NVQ4 or above qualifications (or equivalent) has increased from 33% in 2008 to 39% in 2012. In London, this has increased from 45% to 54% in the same period as shown in Figure 15 below. Figure 14: Change in Level 4+ Qualifications 2008-2012 (%) Derby, Derbyshire, Nottingham and Nottinghamshire Greater Birmingham and Solihull Greater Manchester Leeds City Region London West of England York, North Yorkshire and East Riding Great Britain Source: ONS Annual Population Survey 2012 2008 2009 2010 2011 2012 However, in the Greater Birmingham and Solihull LEP area only a very marginal improvement has been recorded – from 30.1% to 30.4%. In LCR, the highly qualified population has increased from 29% to 33% since 2007. This improvement, whilst commendable, still lags the national average. Further Education and Training The number of enrolments, starts and achievements in FE and training in LCR has remained steady over the last few years, as Figure 15 shows. 21 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Figure 15: Enrolments, Starts, Achievements and Training in LCR FE Source: Data Service SFA 2007/2008 2008/2009 2009/2010 2010/2011 Enrolments, starts and achievements increased from 2008/9 to 2009/10 but then fell in the 2010/11 academic year by 3%, 3% and 2% respectively. It is important to note here that the data presented here is supplied by the Skills Funding Agency’s Data Service. The number of enrolments, starts and achievements shown do not directly correspond to individuals. In other words, there is a significant element of double counting inherent in these figures as students often enrol and start more than one course or module in an academic year. It is also worth noting that the data used in this analysis is aggregated based on where the learning takes place rather than the learner’s postcode. It therefore shows the learning and training on offer in LCR, the vast majority of which will be accessed by learners who are resident within LCR boundaries. When study preferences are analysed by age, some clear differences in subject of study become apparent. Employability courses are offered to most students in FE, therefore this has been excluded from the graph below. In total, there were 190,158 starts in 2010/11 in the under 19 category in FE. LEEDS CITY REGION | Labour Market Analysis 2013/14 22
4 Fig 16: Under-19 Starts in FE 2010/11 Healthcare 9% Creative & Cultural 9% Hair & Beauty 7% Construction 7% Active Leisure, Learning 7% & Well-being Hospitality, Leisure, 6% Travel & Tourism Land-Based & 6% Environmental Industries Business, Administration 4% & Governance Children & Young People 4% Science, Engineering & 4% Source: Data Service SFA Manufacturing Technologies Healthcare and Creative and Cultural studies attracted the most starts in the 2010/11 academic year. Hair and Beauty also continues to be popular. It is an Business Information, 4% Technology & accessible course for some students who might otherwise not engage with further Telecommunication education. However, the LCR economy will require a greater proportion of highly skilled labour in the workforce to improve its competiveness. This though should Process & Manufacturing 4% not be at the expense of entry level opportunities. Central Government, 3% Including Armed Forces Automotive Industries 3% Creative Media 2% 23 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Fig 17: Top 10 Under-19 Starts, 2009/10 - 2010/2011 Creative & Cultura Construction Hair & Beauty Healthcare Land-Based & Environmental Industries Active Leisure, Learning & Well-being Hospitality, Leisure, Travel & Tourism Science, Engineering & Manufacturing Technologies Children & Young People Business Information Technology & Telecommunication 2009/2010 2010/2011 Source: Data Service SFA Between 2009/10 and 2010/11, learner preferences changed significantly in some of the key sector areas within this age group. For example, starts in Creative and Cultural studies fell by over 2,000 whilst Active Leisure and Wellbeing, Business IT and Telecoms, and Process Manufacturing all fell by over 1,000 starts. On the other hand, Adult Social Care, (900), Hair and Beauty (700), Automotive Industries (450) and Science, Engineering & Manufacturing Technologies (400) all recorded much higher starts. Amongst the 19+ age group there were 95,000 starts in FE. Healthcare (13%), Business IT and Telecoms (13%) were the most popular in terms of starts, followed by Adult Social Care (11%) as Figure 18 below shows. Within this age group choices were more widely spread across the spectrum. LEEDS CITY REGION | Labour Market Analysis 2013/14 24
4 Fig 18: 19+ Starts in FE 2010/11 Healthcare 13% Business Information 13% Technology & Communication Adult Social Care 11% Hair & Beauty 7% Lifelong Learning 5% Construction 4% Building Services Engineering 4% Finance, Accountancy 4% & Financial Services Supporting Teaching 4% & Learning in Schools Source: Data Service SFA Hospitality, Leisure, 3% Travel & Tourism When the two age groups are compared, the data suggests that the 19+ group are more conscious of the prevailing opportunities in job market and are thus making Land-Based & , 3% their choices accordingly. This is no surprise given the age difference the experience Environmental Industries and exposure these bring. Health & Safety 3% Children & Young People, 3% Business Administration 2% & Governance Process & Manufacturing 2% 25 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Fig 19: Top 10 19+ Starts 2009/10 - 2010/2011 Healthcare Business Information Technology & Telecommunication Adult Social Care Hair & Beauty Lifelong Learning Construction Building Services Engineering Finance, Accountancy & Financial Services Hospitality, Leisure, Travel & Tourism Land-Based & Environmental 2009/2010 2010/2011 Industries Source: Data Service SFA Figure 19 above shows that starts in Healthcare increased significantly over the period (over 2,000 more starts) but Adult Social Care recorded an even greater jump in starts; by over 3,600. On the other hand Business IT and Telecoms experience a drop in starts of over 1,400. Other sector subject areas like Health and Safety, Creative and Cultural, Languages and Inter-Cultural Working and Process Manufacturing (not shown here) experienced significant reductions in the number of starts over the period. It must be noted here that sometimes such significant shifts in start preferences reflects more on the delicate and challenging funding environment faced by colleges than on the actual preferences and demands made by learners. Apprenticeships Increasing the number and quality of apprenticeships (especially for young people aged 16-24) is a key part of the Government's and LCR's skills strategy. Figure 20 below shows that whilst overall apprenticeship starts increased by 65% between 2009/10 and 2010/11, this was almost exclusively a result of the sharp rise (119%) in adult apprenticeships over that period. This increase in adult apprenticeships occurred mainly as a result of shifts in funding and as figure 15 highlights, did not actually increase overall participation. LEEDS CITY REGION | Labour Market Analysis 2013/14 26
4 Fig 20: Apprenticeship Starts in LCR, 2007/8 – 2010/11 2007/2008 2008/2009 2009/2010 2010/2011 Adult Youth Total Source: Data Service SFA Figure 21 below shows how the profile of apprenticeship starts changed in line with the shifts in funding Figure 21: Profile of Apprenticeship Starts – by level 2009/2010 2010/2011 % Change Advanced level Higher Level Intermediate Level Advanced Level Higher Level Intermediate Level Apprenticeship Apprenticeship Apprenticeship Apprenticeship Apprenticeship Apprenticeship Adults Youth Source: Data Service SFA 27 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Adult intermediate apprenticeships increased by 145% over the period whilst adult advanced apprenticeships rose by 85%. Increases in youth apprenticeships were much more muted in comparison. Figure 22: Top 10 Adult Apprenticeship starts by sector in 2010/2011 compared to 2009/2010 Retail Adult Social Care/Healthcare Business, Administration & Governance Customer Service & Contact Centre Management & Leadership (including HR & Recruitment) Hospitality, Leisure, Travel & Tourism Adult Social Care Children & Young People Active Leisure, Learning & Well-being Hair & Beauty Source: Data Service SFA 2009/2010 2010/2011 The figure above shows that retail and Adult Social Care/Healthcare were the most popular choices amongst apprentices in 2010/11 even though the latter’s share of the total fell. Customer Service and Hospitality recorded the biggest falls in share over the period. LEEDS CITY REGION | Labour Market Analysis 2013/14 28
4 Figure 23: Top 10 Youth Apprenticeship starts by sector in 2010/2011 compared to 2009/2010 Business Information Technology & Telecommunication Business, Administration & Governance Hair & Beauty Construction Children & Young People Customer Service & Contact Centre Active Leisure, Learning & Well-being Automotive Industries Building Services Engineering Hospitality, Leisure, Travel & Tourism 2009/2010 2010/2011 Source: Data Service SFA As with FE starts discussed earlier, Youth Apprenticeship starts differed with adults in terms of sector subject preferences. Business IT and Telecoms, Business Administration and Hair and Beauty were the three most popular preferences in the under 19 age group. Starts in Children and Young People and Hair and Beauty fell significantly as a share of the total. Higher Education Business Administration and subjects allied to Medicine are the most popular courses in Higher Education (HE) in LCR according to data from the Higher Education Statistics Authority. These accounted for 13% each of total enrolments in 2011/12. Social Studies and Languages also proved popular as figure 24 below shows 29 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Fig 24: LCR HE Enrolment 2011/12 Subject Area 2010/11 2011/2012 Change Change % Share (absolute). % (2011/2012) Agriculture & related subjects 121 136 15 12% 0% Combined 603 465 -138 -23% 0% Mathematical sciences 1,331 1,362 30 2% 1% Architecture, building & planning 2,199 1,963 -236 -11% 2% Medicine & dentistry 2,224 2,274 50 2% 2% Mass communications & documentation 2,777 2,968 191 7% 3% Law 3,035 3,005 -30 -1% 3% Computer science 3,113 3,244 131 4% 3% Physical sciences 3,970 4,393 422 11% 4% Historical & philosophical studies 5,476 5,713 237 4% 6% Engineering & technology 5,766 6,271 505 9% 6% Education 6,753 6,503 -250 -4% 7% Creative arts & design 7,628 8,353 725 10% 8% Biological sciences 8,071 8,505 435 5% 9% Languages 8,385 8,848 463 6% 9% Social studies 9,119 9,510 390 4% 10% Subjects allied to medicine 12,301 12,516 215 2% 13% Business & administrative studies 12,185 12,818 633 5% 13% Total 95,058 98,847 3,789 4% 100% Source: HESA 2012 (Analysis by University of Bradford) Physical Sciences and Creative Arts and Design increased enrolment 11% and 10% respectively, compared to the previous year. On the other hand, Architecture, Building and Planning shrunk by 11% in terms of enrolment over the same period. The latest data from the annual Destination of Leavers in Higher Education (DLHE) survey shows that 62% of the 2010/11 graduate cohort from LCR Higher Education Institutions (HEI) had secured graduate level employment within 6 months of their summer graduations, compared to 61% the previous year. See figure 25 over the page. LEEDS CITY REGION | Labour Market Analysis 2013/14 30
4 Fig 25: Graduate level Employment 2009/10 – 2010/11 2011/2012 2010/2011 % Number % Graduate (%) 5,922 62 61 Non Graduate (%) 6,361 38 39 Source: HESA 2012 (Analysis by University of Bradford) An analysis of the occupations entered into by those graduates who have secured graduate level employment shows some more detail. Fig 26: Graduate Occupations Occupation % Share Managers and senior officials 5.1% Professional occupations 15.8% Associate professional and technical occupations 23.5% Administrative and secretarial occupations 6.2% Skilled trades occupations 0.6% Personal service occupations 4.8% Sales and customer service occupations 8.5% Process, plant and machine operatives 0.3% Elementary occupations 5.6% Not known/Not applicable 29.6% Source: HESA 2012 (Analysis by University of Bradford) It is no surprise that many graduates entered professional occupations and associated professional and technical occupations as this is the most likely destination for new graduates. Sales and customer service occupations were also popular as 9% of graduates found opportunities there. These occupations provide vital entry level opportunities for job seekers. 31 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Fig 27: Sectoral Breakdown of Graduate Level Employment LCR Universities % of LCR Total Cohort Wholesale and retail trade; repair of motor vehicles and motorcycles 1,708 12.6% Human health and social work activities 1,391 10.2% Education 1,190 8.8% Professional, scientific and technical activities 1,065 7.8% Accommodation and food service activities 769 5.7% Financial and insurance activities 575 4.2% Information and communication 561 4.1% Arts, entertainment and recreation 515 3.8% Administrative and support service activities 497 3.7% Manufacturing 388 2.9% Public administration and defence; compulsory social security 375 2.8% Other service activities 138 1.0% Construction 105 0.8% Transport and storage 89 0.7% Real estate activities 60 0.4% Activities of extraterritorial organisations and bodies 44 0.3% Electricity, gas, steam and air conditioning supply 35 0.3% Water supply, sewerage, waste management and remediation activities 29 0.2% Mining and quarrying 27 0.2% Agriculture, forestry and fishing 1 0.1% Activities of households as employers; undifferentiated goods and services 10 0.1% producing activities of households for own use Not known/Not applicable 3,991 29.4% Source: HESA 2012 (Analysis by University of Bradford) LEEDS CITY REGION | Labour Market Analysis 2013/14 32
4 Figure 27 on the previous page shows that wholesale and retail, health and social care, education and professional services provided the most popular opportunities for graduates over the last year. Manufacturing and financial services, two of the most important sectors in the city region, only created opportunities for 7% of recent graduates. About the HESA/DLHE data The dataset presented is - the destination of UK full time, 1st degree students, six months after graduation, who responded to the HESA Destination of Leavers from Higher Education survey. A further caveat on this data is the fact that it is for the Higher Education Institutions (HEIs) only (i.e. not including the FE colleges, Open University, BPP, Kaplan etc.). It also does not include part-time student numbers (stripped out to enable the HEIs access to completely comparable information), post-graduate students or for that matter non university validated qualifications, e.g. ILM, CMI, CIPD etc. Figure 28: Forecast Change in LCR Skills Profile 2000 2010 2015 2020 Source: UKCES/Working Futures 2012 33 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Figure 28 shows that over the next decade, the skills profile of the city region is forecast to change remarkably with a distinct shift towards higher level skills. The proportion with low or no qualifications is forecast to fall significantly over the same period. NEETS – 16 to 19 year olds not in employment, education or training Figure 29 shows that LCR has a lower NEET rate than Greater Manchester and also the Yorkshire average. Over the last year the rate has fallen by 1 percentage point. As part of the City Deal with central government, the city region has set itself an ambition to drive down the NEETs rate over the medium term. Figure 29: NEETS in LCR, December 2012 NEETS Annual Change (percentage points) LCR 5.7% -1.0% Greater Manchester 6.2% -0.7% YH 6.2% -0.9% England 5.8% -0.3% Source: Department for Education, 2013 Due largely to the academic calendar, the “flow” of young people from one statistical category to another and the methodology deployed to derive the NEET estimates, the months of August and September are traditionally peak periods for NEET levels. Over the last 18 months, the estimated number of NEETS in LCR has fluctuated significantly. Figure 30 shows the August/September peak in 2011, sharp decline subsequently and then the 2012 peak. LEEDS CITY REGION | Labour Market Analysis 2013/14 34
4 Figure 30: 16-19 year old NEETs in LCR – by Education Authorities, Jun 2011 – Dec 2012 Bradford Calderdale Kirklees Leeds North Yorkshire Wakefield York England Yorkshire and the Humber Leeds City Region Barnsley Source: Department for Education, 2013 NEET data is reported at Local Education Authority (LEA) level and in North Yorkshire this is at County Council level. This means that the North Yorkshire districts that are part of LCR (Craven, Selby and Harrogate) are “bundled” together with the other North Yorkshire Districts in this section. 35 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Figure 31: December 2012 and Change over the last 12 months - % 4.8% 4.0% 6.0% 6.6% 5.8% 6.2% 5.9% 5.2% 5.5% 5.7% 7.1% -4.9% -12.7% -14.1% -5.3% -17.5% -24.1% -14.5% -12.7% -14.8% -12.7% -11.1% Yorkshire and the Humber Leeds City Region Wakefield Kirklees Leeds Calderdale Bradford Barnsley York North Yorkshire England % 16-19s NEETS % change over the last 12 months Source: Department for Education, 2013 At LEA level, NEET rates vary considerably. Figure 31 shows that by December 2012, the highest NEET levels in LCR were recorded in Wakefield district (7.1%), followed by 6.6% in Kirklees and 6% in Leeds. York and North Yorkshire had the lowest levels, 4.8% and 4% respectively. All LEAs in the city region have recorded significant improvement, compared to the same period 12 months ago. In absolute terms Figure 32 shows that the number of NEETs in LCR was estimated to be 5,809 in December 2012. A year before then, the estimate was 7,333. It is worth noting here that the number of youth claimants (18-24) in LCR is currently more than 26,000 (see figure 12). It could be argued that this might be deserving of even greater policy attention. However if the level of 16-19 year old NEETs is not drastically reduced the number of youth claimants will continue to remain high irrespective of the best policy efforts. LEEDS CITY REGION | Labour Market Analysis 2013/14 36
4 Figure 32: 16-19 year old NEETs in LCR – Absolute levels 1,880 1,274 1,194 1,192 942 828 824 422 503 263 992 427 310 915 561 515 Barnsley Bradford Calderdale Kirklees Leeds North Yorkshire Wakefiled York Adjusted NEET December 2011 Adjusted NEET December 2012 Source: Department for Education, 2013 Unsurprisingly, Leeds has the highest number of NEETs in LCR. In December, 2012 this was estimated to be 1,274. At the same period in 2011, the number was 1,880 as Figure 32 shows. When NEET levels in LCR are compared with the England average over the last 12 months, the evidence shows that the two almost mirror each other. 37 LEEDS CITY REGION | Labour Market Analysis 2013/14
4 Figure 33: 16-19 year old NEETs in LCR and England – Jun 2011 to Dec 2012 Jun - 11 Jul - 11 Aug - 11 Sep - 11 Oct - 11 Nov - 11 Dec - 11 Jan - 12 Feb - 12 Mar - 12 Apr - 12 May - 12 Jun - 12 Jul - 12 Aug - 12 Sep - 12 Oct - 12 Nov - 12 Dec - 12 LCR England Source: Department for Education, 2013 Figure 33 shows that over that after the traditional August/September peak, NEET rates generally fall till around April and then start to rise again till the peak. However the 2012 peak (LCR: 7%, England: 7.3%) is lower than the 2011 Peak (LCR: 7.6%, England 7.9%). This is good news but it is too early though to say whether this is due to an improvement in the wider economy and the successful implementation of government and local policies. Conclusion • Adult apprenticeships have increased but overall participation fell in 2010/2011 • 62% of graduates secured graduate level employment. • Creative and Cultural studies, Construction and Hair and Beauty are the most popular sector subject choices among under 19’s in FE but among the 19+ this was Healthcare, Adult Social Care and Business IT and Telecoms. • GCSE attainment in 4 of the 8 LEA areas in LCR remained below the England average. This includes Leeds and Bradford which have 45% of the youth population in LCR • JSA claimant rate in LCR (4.8%) is similar to the UK (4.9%) average. Youth claimant rates have remained unchanged compared to the same period last year. Longer term claimant rates have risen more sharply in LCR than in the UK as a whole. • The skills profile in LCR is forecast to change over the next decade with an increase in the proportion with higher qualifications and a decrease in the proportion of the population with low or no qualifications. • The number of NEETs in LCR has fallen over the last 12 months and is marginally below the England average. LEEDS CITY REGION | Labour Market Analysis 2013/14 38
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