Responses to the MAC consultation on the impact on the UK labour market of the UK’s exit from the European Union.

Public Administration (SIC 84)

March 2018

Contents

Responses available via the MAC website 3

BEIS 4

The Brexit Advisory Committee 5

Buckinghamshire County Council 8

Responses available via the MAC website

1. Local Government Association 2. London Borough of Camden

BEIS

On behalf of BEIS, I can confirm that we do currently employ EU Nationals across the

organisation. We benefit from their services and skills and experience e.g. in economic

analysis and digital functions.

We have consulted our EU Nationals Diversity Network and will forward comments from

them and any other interested parties should we receive them.

In addition, through our regular on-going contact with MAC, we will feed in any further

thinking on labour market policy as that emerges.

The Brexit Advisory Committee

Migration trends and skills

Statistics show that public services are less dependent on European Economic Area

(EEA) nationals than the private sector. For example, according to data from the Office of

National Statics (ONS) released in 2016, EEA nationals make up approximately 7% of the

total UK workforce, whereas in the NHS and educations sectors they make up around

5%1. However, as a number of public services are delivered through the private sector (as

is often the case with social care), this is not an exact distinction. .

For example, in social care, according to a 2017 House of Commons report, the number of

new recruits from EEA countries has increased by 40% over the past five years2, which

means that if there was a decline in migration, there could be a more significant impact on

workforce numbers and budgets than statistics suggest.

In health and social care, even if there were enough UK workers wishing to fill the gaps,

the training lag involved would be still significant. This may mean that some services could

become undeliverable unless proactive measures are taken to encourage EU and other

foreign nationals to both continue to come to the UK and to stay.

But the picture is not static, the effects of the vote to leave the EU is already influencing

behaviour. Although the UK is still part of the EU, evidence demonstrates that the UK has

already become a less attractive place for EU citizens to work. As data from NHS digital3

in 2017 shows that there has already been a 10,000 person reduction of EEA health

service professionals working in the NHS since the Brexit vote.

This is perhaps due to the fall in the Sterling relative to the euro and also uncertainty on

whether the entitlements that they are currently able to access, for example free

healthcare and education, will remain.

The adverse impact of any policy decisions could be particularly felt in the South East of

England, as it is a region that depends more heavily on low-wage migrant labour. For

example, 12% of the NHS workforce are from the EEA.

It is therefore incumbent that contingency plans for regions, like the South East, and

sectors, such as health and social care, begin to be created. Infrastructure programmes,

such as an increase in public expenditure for training, should be in discussion. Indeed,

both the snapshot evidence and emerging trends make the case powerfully that the need

to invest in renewal is urgent.

1 Office for National Statistics (ONS), International immigration and the labour market, UK, 2016

https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigrati

on/articles/migrationandthelabourmarketuk/2016

2 House of Commons, Adult Social Care Funding (England), 2017

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7903

3 NHS Digital, 10,000 EU health workers, 2017

https://www.theguardian.com/society/2017/sep/21/almost-10000-eu-health-workers-have-quit-the-

nhs-since-brexit-vote

With the UK already becoming a less attractive place to work for EU citizen, the

Government must have plans in place for where we will be in 2019-22, when the effects on

the labour market will likely be more keenly felt.

Part of these considerations should be the average age of public sector workers, relative

to the private sector. The latest Labour Force Survey from the ONS highlights that the

difference is significant. It is important therefore that the public sector acts quickly to invest

in new skilled workers and the Government should consider what resources and funding

are in place to address this demand.

Economic, social and fiscal impacts

As well as directly affecting public service workforce capacity and retention, EEA migration

also has an impact on public service spending levels. Budgets for services are greatly

influenced by economic performance, and therefore any slowdown, as a result of a

reduction in EEA migrants, may undermine current funding levels.

There will also be wider, second round impacts on the effectiveness of public spending

and its delivery capacity. For example, reductions in EU migration could also reduce the

capacity of public spending to deliver housing and infrastructure projects across the UK if

the construction sector is shown to be reliant on European labour.

Local government significantly depends on the economic activity of regions, which, in turn,

often rely on low-wage migrant labour. For instance, the West Midlands heavily rely on car

manufacturing and recruit EEA staff. As by 2020, a higher proportion of councils will

receive all of their revenue income from council tax and business rates, any threat to the

local economy will have knock-on effects on the sustainability of local government

finances.

Taking all the above into consideration, the combined potential effects make a powerful

case not just for rapid investment in skills, but also a much broader agenda of

economically enabling spend such as digital, infrastructure and other capital spend.

Questions to be debated

• Please provide evidence on the methods of recruitment used to employ EEA

migrants. Do these methods differ from those used to employ UK and non-EEA

workers? What impact does this have on UK workers? Have these methods

changed following the Brexit referendum?

• Do fiscal impacts differ from the impact of non-EEA migrants?

To what extent has EEA and non-EEA migration affected the skills and training

ofthe UK workers?

• How involved are universities and training providers in ensuring that the UK

workforce has the skills needed to fill key roles/roles in high demand in your sector?

Do you have plans to increase this involvement in the future?

• What other contingency plans should be in discussion?

About the Brexit Advisory Committee

The Brexit Advisory Commission for Public Services was established in 2017 to develop

the case for the best possible Brexit deal for the public sector based on analysis of the

risks and opportunities.

Buckinghamshire County Council

Terminology: BCC have analysed data for both EU nationals and EEA + Swiss nationals, as

Swiss nationals are able to live and work in the UK by virtue of the Agreement on the Free

Movement of Persons between Switzerland and the EU. For the purposes of this

consultation response, therefore, the term “EEA nationals” will refer to EEA and Swiss

nationals, whilst the term “EU nationals” will only refer to citizens of the European Union,

excluding UK nationals.

EEA Migration Trends

Please provide evidence on the characteristics (e.g. types of jobs migrants perform;

skill levels, etc) of EEA migrants in your particular sector/local area/ region. How do

these differ from UK workers? And from non-EEA workers?

BCC have analysed workforce data which shows that 3% of employees (114 people) are

EEA national (Appendix 1). The percentage of EEA nationals is higher in Children’s Services

and Communities, Health and Social Care (CHASC), with 7.6% of jobs with ‘Social Worker’

in the title being held by EEA nationals. However, it should be noted that numbers are small

and may have limited statistical validity.

BCC have commissioned data from the ONS based on the 2011 census, analysing the

numbers and percentages of EU nationals in employment in Buckinghamshire by sector

(Appendix 2). In 2011, EU nationals accounted for 4.96% of Buckinghamshire’s resident

workforce, but were significantly overrepresented in a number of sectors and occupations,

as shown in Appendix 2. Recognising that these figures are set to have increased since

2011, the food & beverage service industry employs the highest number of EU nationals in

its workforce (12.42%) with 1,110 EU nationals out of 8,937. The second highest

proportionate industry is the retail trade, employing 907 EU nationals out of 22,518 (4.03%),

followed by the construction sector employing 892 EU nationals out of 18,225 4.89%),

education with 798 EU nationals out of 23,702 (3.37%) and Human Health Activities with

647 EU nationals out of 13,129 (4.93%).

The original commissioned data is in the public domain and can be accessed here:

Occupation by passport held, Occupation by passport held by industry, Industry by passport

held.

To what extent are EEA migrants seasonal; part-time; agency-workers; temporary;

short-term assignments; intra-company transfers; self-employed? What information

do you have on their skill levels? To what extent do these differ from UK workers and

non-EEA workers?

In BCC, EEA migrants make up some of our permanent workforce and also some of our

agency workers. We do not recruit any seasonal workers. Skill levels for these workers

would be the same as for UK workers. Non-EEA workers occupy specialist hard to fill roles

such as Maths/Science Teachers or Qualified Children’s Social Workers

Are there any relevant sources of evidence, beyond the usual range of official

statistics, that would allow the MAC to get a more detailed view of the current patterns

of EEA migration, especially over the last year?

Skill for Care’s NMDS-SC data includes nationality information, including changes in

workforce patterns over a period of time. State of the adult social care sector and workforce

in England, 2016. However, it should be noted that there are significant data quality issues.

In Buckinghamshire, for example, 12% of the Social Care workforce is made up of EEA

nationals, but nationality data is not known for 17.1% of entries, meaning it could be

significantly higher.

Have the patterns of EEA migration changed over time? What evidence do you have

showing your employment of EEA migrants since 2000? And after the Brexit

referendum? Are these trends different for UK workers and non-EEA workers?

Economic migration from the EU has significantly increased in Buckinghamshire since 2011,

according to DWP’s NINO data (Appendix 3). DWP has recorded 14,801 National Insurance

registrations by EU nationals between 1st January 2012 and 31st December 2016, and

although data is scarce, soft evidence suggest that work patterns have changed significantly

since 2011, with a significant increase in the percentage of EU nationals in the Hospitality,

Construction, Health, and Social Care sectors. For example, according to Skill for Care’s

nmds-sc data, 12% of the adult social care workforce in Buckinghamshire is made up of

EEA (Non British), although it should be noted that there are significant data quality issues,

with nationality data not known for 17.1% of entries. Between 1st January 2012 and 31st

December 2016, Romanian and Polish nationals accounted for 45% of all economic

migration in Buckinghamshire.

Have you made any assessment of the impact of a possible reduction in the

availability of EEA migrants (whether occurring naturally or through policy) as part of

your workforce? What impact would a reduction in EEA migration have on your

sector/local area/region? How will your business/sector/area/region cope? Would the

impacts be different if reductions in migration took place amongst non-EEA

migrants? Have you made any contingency plans?

A reduction of EEA workers may have an impact on permanent/fixed term recruitment, and

agency workers/temporary staff, particularly in specialist and hard to fill areas such as

Maths/Science Teachers and Qualified Children’s Social Workers. A reduction of non-EEA

migrants in these hard to fill areas may increase the number of agency workers and

potentially push up costs for agency workers/temporary staff.

Recruitment Practices, Training & Skills

To what extent has EEA and non-EEA migration affected the skills and training of the

UK workers?

How involved are universities and training providers in ensuring that the UK

workforce has the skills needed to fill key roles/roles in high demand in your sector?

Do you have plans to increase this involvement in the future?

How well aware are you of current UK migration policies for non-EEA migrants? If

new immigration policies restrict the numbers of low-skilled migrants who can come

to work in the UK, which forms of migration into low-skilled work should be

prioritised? For example, the current shortage occupation list applies to high skilled

occupations; do you think this should be expanded to cover lower skill levels?

Immigration should be prioritised in areas currently experiencing significant recruitment

pressures and this should include lower skill levels. This should apply to sectors such as

Health and Social Care, where the recruitment and retention of staff is a significant issue.

Immigration policies should also recognise local variations and requirements and ensure

that growth potential is considered when prioritising immigration.

Current definitions of high and low skilled are too restrictive and do not recognise the needs

of many businesses, particularly those in creative or emerging sectors.

Appendix 1

Appendix 2

Appendix 3