UK COMMISSION FOR EMPLOYMENT AND SKILLS The UK Commission for Employment and Skills: Towards a Five...

UK COMMISSION FOREMPLOYMENT AND SKILLS

The UK Commission for Employment and Skills:Towards a Five Year Strategy – for the UK & Scotland

Chris Humphries CBEChief ExecutiveUK Commission for Employment and Skills

Goodison Group Seminar

Scottish Parliament

6 October 2008

2


The UK – not a bad track record, surely?

• 22nd country by size of population

• 16th economy in world by gross national income

• 6th largest world economy by GDP:– USA, China, Japan, Germany, India, UK, France, Italy, Russia

• Employment levels at 74.7%, compared to EU of 66%

• Unemployment at 5.5%, compared to EU at 6.9%

What’s the problem?

Source: Population, Income and GDP date from CIA Yearbook 2006; Service economy data from OECD Factbook 2006,

3


UK Jobs and Productivity:An International Challenge …

France

GreeceItaly

Netherlands

Portugal

Spain

Japan Austria

Belgium

Denmark

Finland

Germany

Ireland

Sweden

55

60

65

70

75

80

50 60 70 80 90 100 110 120

Productivity - GVA per hour worked

%ag

e E

mp

loym

ent

Rat

e UK

USA

EU

• Prosperity depends on jobs and productivity – and both depend on skills• Employment – UK is 4th in EU; 8th out of 30 in OECD• Productivity – UK is 10th out of EU 15; 15th out of 30 in OECD

Source: Labour Market Trends (May 2005), O’Mahoney and Van Ark (2003)

4


UK Productivity:… a sectoral challenge

0%

50%

100%

150%

200%

Mining & quarry

ing

Agricultu

re, fo

restry …

Food & D

rink

Vehicle Maintenance

Machinery

Wholesale Trade

Electricity

, Gas, W

ater

Chemicals …

Transport Equipment

Public administra

tion

Manufacturing N

ES

Print a

nd publishing

Whole Economy

Wood, pulp …

Transport

Metals and minerals

Computing

Misc Services

Textiles and clothing

Constructio

n

Retail Trade

Hotes & R

estaurants

Health &

Social Care

Business Services

Education

Financial Serv

ices

Post & Telecoms

Real Estate

UK Productivity as %age of Europe’s

Good Poor

5


… with skills variations across sectors

0%

20%

40%

60%

80%

100%

Tra

ns

po

rt &

Co

mm

un

ica

tio

n

Ag

ric

ult

ure

Dis

trib

uti

on

&H

os

pit

alit

y

Ma

nu

fac

turi

ng

Co

ns

tru

cti

on

Oth

er

Se

rvic

es

En

erg

y &

Wa

ter

Fin

an

cia

lS

erv

ice

s

Pu

blic

Se

rvic

es

Qu

arte

r 4,

200

7

Low Skilled Apprenticeships Medium Skilled High Skilled

Source: Labour Force Survey, Q4, 2007

6


UK Jobs and Productivity:… and a national/regional challenge …

North East

EasternSouth East

South West

Wales

N. Ireland

North West

Yorkshire

East Midlands

West Midlands

London

England

Scotland

UK

68

70

72

74

76

78

80

82

80 85 90 95 100 105 110 115 120 125

Productivity - GVA per hour worked, compared to UK

%a

ge

Em

plo

ym

en

t R

ate

Source: Office of National Statistics- GVA data 2006; Employment data Q4, 2007

7


… with skills variations across nations and regions

0% 20% 40% 60% 80% 100%

UK

England

North East

North West

Yorkshire

East Mids

West Mids

Eastern

London

South East

South West

N. Ireland

Scotland

Wales

Degree

Sub-degree HE

A-levels/VQ 3

GCSE/VQ 2

Level 1/0

No quals

Source: ONS Regional Snapshot, 2007

UK Working Age Population – Highest Qualifications Held, 2006

8


Projected change in age groups 2010-2020 (in thousands)

• Big increase in older workers

• 75% of UK workforce already in work

• Yet these are the people we are least likely to train

• Particular decline pattern amongst youngest workers

218+5%

362-9%

752-16%

662+17% 542

+14%

4049%

808+23%

335+11%

82133%+

-

800

100

200

500

400

300

600

800

700

15-19 20-24 25-29 30-34 35-39 40-44 AGE70-7445-49 65-6960-6455-5950-54

100

200

300

400

500

600

700

900

45-49 60-6455-5950-5415-19 20-24 35-39 40-44

Source: UK Government Actuary, 2004-based Project populations 2004-2074

309-7%

531%

201%

18-22 Population - 2007-2020

3,500

3,700

3,900

4,100

4,300

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Th

ou

sa

nd

s

500,000 (12%) decline in 10 years

UK demographic trends to 2020: Less young & more older workers

9


Qualifications held by those of working age

19% 15% 13% 10%

23%21% 18% 18%

22%22%

21% 21%

23%

16%18%

20% 19%

26%

20% 21% 23% 25%31%

2%8%

9%8%

0%

20%

40%

60%

80%

100%

1995 2000 2005 2007 Leitch2020

Level 5Level 4Level 3Level 2Level 1No quals.

Skills of the UK adult workforce: 1990-2020

Source: DfEE/DfES, Labour Force Survey, 1990-2005; Leitch, Prosperity for all in the Global Economy, 2006

28% with very low skills

33% with high skills

10


High employment levels mean we must reach more of the unemployed and inactive

Skills levels by employment status

0% 20% 40% 60% 80% 100%

Inactive

Unemployed

Employed

No quals Level 1 Level 2 Level 3 Level 4 Level 5+

Source: ONS, Labour Force Survey, 2005

11


0%

20%

40%

60%

80%

100%

25-34 year olds 45-54 year olds

Population with at least upper secondary education, 2004

UK improvements are too slow at school level …

UK Position:• 15th in OECD for ‘older workers’• 22nd in OECD for ‘younger workers’

Source: OECD, Education at a Glance 2007, Table A1.2a

12


Population with tertiary education, 2004

0%

20%

40%

60%

Canad

a

Japa

n

Korea

Norway

Irela

nd

Belgi

um

Denm

ark

Spain

Franc

e

United S

tate

s

Austra

lia

Finla

nd

Sweden

Luxem

bourg

Icela

nd

Nethe

rlands

United K

ingdo

m

Switzer

land

New Z

eala

nd

Poland

Greec

e

Germ

any

Austria

Hungar

y

Portuga

l

Mex

ico

Slova

k Rep

ublic Ita

ly

Czech

Rep

ublic

Turke

y

25-34 year olds 45-54 year olds

… and too slow at tertiary level too

Source: OECD, Education at a Glance 2007. Table A1.3a

UK Position:• 12th in OECD for ‘older workers’• 17th in OECD for ‘younger workers’

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… and we don’t train our managers well!

Training days per year

0

2

4

6

8

10

%age Graduate Managers

0%

20%

40%

60%

80%

100%

On-the-job

Off-the-job

Source: Keep & Westwood, ‘Can the UK Learn to Manage?’, 2003

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Are we closing the gap at the moment?

Skill LevelOECD 2007

position2020 position on

current trend

Literacy/numeracy 20th out of 23 N/A

No/low skills17th out of 30

(35%)15th

Intermediate Level skills20th out of 30

(36%)13th

Degree or higher11th out of 30

(29%)14th

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What is the big UK ambition?

“A competitive society – one which achieves a dynamic equilibrium between wealth creation

and social cohesion”Prof. Stephane Garelli, Editor, World Competitiveness Handbook, 1995

Productivity improved to European average

Increased employment opportunities – 80% in work

A world class high skill workforce

Better equity and social cohesion – closing the gaps!

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UK Commission for Employment and Skills:Purpose and Roles

• Purpose: “to strengthen the employer voice, deliver greater leadership and influence and to achieve the best from the employment and skills systems”

• Principal Roles:– “assess progress towards making the UK a World Class Leader in

employment and skills by 2020”;– “develop an independent view of how employment and skills services

can be improved to achieve increased employment retention and progression, skills and productivity”;

– “provide advice to inform strategic policy development, analysis and exchange of good practice to drive and shape the skills and employment system to meet the needs of employers and individuals”;

– “promote employer investment in people and the better use of skills”;– “express its advice and recommendations to the highest levels of

governments in the UK”; – “fund and manage the performance of the Sector Skills Councils

including their re-licensing.”

Source: UK Government Remit Letter to UK Commission for Employment and Skills, March 2008

17


Year 1 Work Programme

Core Programme:

• Prepare first ‘State of the Nations’ Report – March 2009

• Launch and progress SSC Re-licensing

• Review of Employer ‘Collective Measures’

• Preparation for 2010 Review of Employment and Skills Services, and later review of Statutory Entitlement to Learning

Baseline Projects:

• Underpinning Research Programme – UK & International research programme to inform annual progress report

• Linking Spatial and Sectoral Initiatives – maximising the geographic return from sectoral/regional skills initiatives

18


Year 1 Work Programme (cont’d)

Commission Projects:• Labour Market Information models – to ensure consistent, high quality

and reliable Labour Market Information is available for both sectors and regions

• ‘Mapping’ – the UK employment and skills system so employers find it easier to access, and gain, the support they need from colleges and Universities

• Employability Skills – ensuring learners get, in addition to technical skills, the generic employability skills needed by 21st century employers

• ‘Customer Journey’ studies – track the employer and learner experience with colleges to help simplify the UK employment/skills system

• Employee Demand Study – identifying and removing barriers that reduce current employee participation in work-related skills and training

• Simplification – seeking to simplify the employment and skills system to better serve the needs of employers and individuals

• Skills Utilisation – how to deploy higher level skills to implement more productive and competitive business strategies

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Draft Strategic Map: 2009-2014

SUSTAINABLE ECONOMIC COMPETITIVENESSAND SOCIAL COHESION

2020 Goal: UK still 6th largest world economy2020 Goal: Converging earnings ratios between top and bottom quartile

National and global economy

Competitor/

comparator nations

Social policy and conditions

Culture – attitude &

values

INCREASED PRODUCTIVITY(‘Good industries – sustainable)

2020 Goal: UK productivity = EU average

INCREASED EMPLOYMENT(‘Good jobs’ – career progression)2020 Goal: 77% employment rate

SKILLS AND EMPLOYMENT POLICY AND PRACTICE2014 Progress: 36% of working age population at sub-degree HE

2014 Progress: 58% at upper secondary/equivalent2014 Progress: 60% at lower secondary level/equivalent

2014 Progress: 76% employment rate2014 Progress:: UK unemployment rate 20% lower than EU average

RegulatoryenvironmentCompetition policyInfrastructureInvestmentTradeResearch &developmentPublic sectoreffectiveness

OTHER DRIVERSOF PRODUCTIVITY

Job creationinitiatives

Conducivebenefits system/

incentivesSustainable

developmentClosing

opportunity gapsEquality &

diversity

OTHER DRIVERSOF EMPLOYMENT

UK COMMISSION FOR EMPLOYMENT AND SKILLSTo monitor, challenge and stimulate improvement of the UK employment and skills system in …

Raising ambition, engagement and

investment

Developing demand-led policies, measures

& incentives

Implementing through simple & responsive

structures / processes

Achieving world class performance and

delivery

Identifying priorities and improving intelligence

For Employers For IndividualsFor Learning Providers

ENTERPRISE &INNOVATION

2014 Progress: High performance

working target TBA

ECONOMIC DEVELOPMENT2014 Progress:

Converging spatial equity gaps - TBA

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Some questions for your consideration:

1. Does this strategic framework make sense?

2. Are our ambitions for the UK appropriate? How may they need to be adjusted for Scotland?

3. In addition to productivity and employment, are we right to include aspects of:– Enterprise (e.g. skills utilisation/ high performance working;

management and leadership)– Economic development (e.g. closing geographical ‘gaps’ in productivity,

employment and skills)

in our scope?

4. Are the three key levers for Commission challenge and influence appropriate? (see more detailed framework ‘handout’)

5. What changes does the current system need – on the demand side and on the supply side?

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To contribute further to the development

of UKCES’ Strategic Plan, please send

your thoughts to

[email protected]

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