Edinburgh. Skills Assessment January SDS-1152-Jan16
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1 Edinburgh Skills Assessment January 2016 SDS-1152-Jan16
2 Acknowledgement The Regional Skills Assessment Steering Group (Skills Development Scotland, Scottish Enterprise, the Scottish Funding Council and the Scottish Local Authorities Economic Development Group) would like to thank Ekosgen for their highly professional support in the analysis and collation of the data that forms the basis of this Skills Assessment Update.
3 Introduction What is this report? This is a specific skills summary report for the Edinburgh local authority area, one of a series of 32 local authority reports across Scotland. These follow the preparation of 2015 summary Regional Skills Assessments (RSA) which have been developed by Skills Development Scotland (SDS), in partnership with Scottish Enterprise (SE), the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development (SLAED) Group. The preparation of local authority-specific reports are designed to help support local authorities and partners with skills investment planning by providing local authority level data where this exists. The reports also support SDS in planning its provision for individuals and businesses. This series of local authority reports sits alongside the 2015 RSA update reports which highlight some of the key messages for the regions. The local authority and regional updates are summary reports, underpinned by the full data matrix, available at sds.co.uk/what-we-do/partnerships/regional-skills-assessments/. The data matrix has been redesigned to be more user-friendly, and accompanying guidance on how to use the matrix can be found alongside the full data matrix. What has changed since 2014? The economic situation in Scotland has continued to improve in the last year, and the recovery evident at the time of the last RSA is more firmly established, with rising GVA and falling unemployment. Against many indicators, Scotland has returned to prerecession levels. There continues to be a rise in the participation of women and older workers, and youth unemployment previously apparent has started to fall. Still, underemployment remains an issue and productivity growth in Scotland (and the UK) remains weak and largely consumer-driven. In policy terms, a new Economic Strategy for Scotland is in place. This puts the 4 I s Internationalisation, Investment, Innovation and Inclusive Growth as central to the strategy. Increasing exports continues to be a key policy objective, and the prominence of Inclusive Growth reflects the desire for a re-balancing form of economic growth. Innovation, including workplace innovation, continues to be highly important. Investment continues to be necessary for firms to be successful. Existing strategies and policies also remain important, including the 2010 Skills Strategy and the 2014 Developing the Young Workforce - Scotland s Youth Employment Strategy. The 2015 RSA update seeks to reflect some of these policy developments. For the first time the data matrix includes deprivation indicators, and there is greater attention paid to inequality issues such as age, disability and gender indicators. There is also more detail on school-level provision, migration, travel to work/study, claimant counts and employment projections. 2
4 Selected headline indicator changes Edinburgh Previous year Most recent year % change Economic performance Gross Value Added (GVA) ( m) 18,070 (2012) 18,590 (2013) +2.9% GVA per worker 74,100 (2012) 77,100 (2013) +4.0% Number of businesses 19,985 (2013) 20,820 (2014) +4.2% Profile of the workforce Total employment 313,700 (2013) 321,100 (2014) +2.4% Professional occupations 80,900 (2013) 73,300 (2014) -9.4% People and skills supply Total population 487,500 (2013) 492,700 (2014) +10.7% ILO unemployed 17,600 (2013/14) 11,100 (2014/15) -36.9% unemployed 1,490 (2014) 610 (2015) -59.0% Deprivation Workless households 36,285 (2012) 31,181 (2013) -14.1% % of children with free school meals n/a 41% (2015) n/a Education and training MA starts 1,465 (2013/14) 1,495 (2014/15) -2.0% College provision (headcount)* n/a 21,007 (2013/14) n/a Higher Education provision (headcount)* n/a 60,221 (2013/14) n/a Skills mismatches % of employers recruited in past 2-3 years 72%* (2014) (next updated 2016) n/a % of employers reporting not all staff fully proficient 21%* (2014) (next updated 2016) n/a *Please note, this data is only available at the regional level, covering Edinburgh, East Lothian and Midlothian authorities. 1 Economic performance The City of Edinburgh generates a significant proportion of Scotland s output 15.9% of the total, higher than its share of the population, and in line with the previous year, dominated by the financial and insurance (22% of all output) and education and health (21%) sectors. The annual GVA growth rate was 2.9% in 2013, in line with the Scotland increase although this was 4.9% (against Scotland s increase of 2%) in the previous year Productivity levels in the City are well above the Scottish and UK averages, and the highest in Scotland. GVA per worker was 77,100 in 2013, 64% above the Scottish average of 47,000 and 51% above the UK average of 51,000. GVA per worker in the City of Edinburgh increased by 17% between 2006 and 2013, at a rate broadly in line with the Scotland (18%) and UK (17%) averages. Most recent (2014) data shows that jobs in the City, at 570 per week full time, pay well above the Scottish ( 519) and UK ( 518) averages. This remained unchanged between 2013 and 2014, while there has been a 2% rise across Scotland. Those living in Edinburgh earn marginally less, at 563 full time per week. 3
5 Business Base by Sector, 2014 Source: UK Business Counts Professional, scientific & technical Retail Information & communication Accommodation & food services Arts, entertainment, recreation & other services Health Edinburgh 0% 5% 10% 15% 20% 25% Scotland There were 20,820 VAT/PAYE registered businesses in 2014, up 4.2% from 2013, above the 2.8% Scotland increase. Since 2010, the base has grown by 9%, well above the 5% growth in Scotland and 6% in the UK. The City of Edinburgh business base is dominated by the professional, scientific and technical sector, which accounts for 20% of all businesses, and five percentage points above the Scotland proportion. 2 Profile of the workforce After a dip in 2013, total employment in the City of Edinburgh returned to growth in 2014, to 321,100, although at a slower rate than the Scottish average. The rate of growth between 2013 and 2014 was 2.4%, compared to 3.2% in Scotland. Since 2009, however, employment in the City has grown by 2.4%, well above the 0.7% increase across Scotland. The greatest number of jobs are in health (15%, 48,500). However, the second highest employment sector is the financial and insurance sector (36,700, 11%), well above the Scotland (3%) and Great Britain (4%) proportions, although the sector accounts for just 5% of the business base, reflecting a number of large financial sector employers. Edinburgh has a very high employment concentration in financial and insurance (x 3.4 the Scotland level), and also in information and communications (x 1.8). Professional, scientific and technical sector and education employment is also concentrated, as are the arts, entertainment and recreation. Sector specialisation exists for those sectors with a value which is above 100% Index of Total Employment, Source: Business Register and Employment Survey Edinburgh Scotland GB Sector Specialisation, 2014 Source: Business Register and Employment Survey Financial & insurance Information & communication Professional, scientific & technical Education Arts, entertainment, recreation Property Accommodation & food services Business administration & support Public administration & defence Health Retail Transport & storage (inc postal) Wholesale Motor trades Construction Production Agriculture, forestry & fishing 0% 50% 100% 150% 200% 250% 300% 350% 400% 4
6 The greatest difference in the occupational profile between the City of Edinburgh and Scotland exists in professional occupations, in which 29%, or 73,300, are employed, well above the Scotland and UK averages of 20%. There is also a smaller proportion employed in skilled trades occupations (6%, compared to 11% in Scotland) and process, plant and machine operative jobs (3%, compared to 6% in Scotland). Process, plant and machine operatives Caring, leisure and other services Managers, Directors & Senior Officials Occupational Profile, 2014 Source: Annual Population Survey Elementary occupations Sales and Customer Service Skilled Trades Occupations Administrative and Secretarial Associate Prof & Tech Professional Occupations Edinburgh 0% 5% 10% 15% 20% 25% 30% Scotland 3 People and skills supply At an estimated 492,700, the 2014 population increased further by 1.1% from 2013, and there has been a 10% increase in the population since This is higher than the 5% growth in Scotland and 8% growth in the UK over the same period Index of Total Population, Source: Mid-Year Population Estimates 95 The employment rate for the City of 90 Edinburgh in 2014 was 73%, in line with Scotland and Great Britain, and one percentage point higher than 2013/14, although still below the 75% 2008/09 pre-recession employment rate. Edinburgh Scotland UK In 2014/15 there were 11,100 ILO unemployed (those out of work and actively seeking work), down from 17,600 in 2013/14. The ILO rate in 2014/15 was 4% in the City, below the Scotland and UK rates (6%). In 2015 there were 610 unemployed young people aged 16 to 24, a dramatic decrease of 59% from 2014, faster than the sharp falls across Scotland. The proportion of school leavers entering Higher Education in 2014/15 was 38%, down from 41% in 2013/14, bringing it into line with the Scotland rate of 38%. The percentage entering Further Education (25%) increased from 21%, and a smaller proportion (22%) entered employment, down from 25% the previous year. A much higher proportion of those aged years in Edinburgh have high level qualifications (56% at SCQF 7-12), compared to 41% in Scotland. Just 5% have no qualifications, compared to 9% in Scotland. Amongst year-olds, 34% have Higherlevel qualifications (SCQF 6) above the 27% in Scotland. 5
7 4 Deprivation Despite overall relative affluence, 17% of City of Edinburgh households are workless households (2013), compared to 20% in Scotland, and 17% across the UK. This still equates to some 31,181 households. Over a third (35%) of households have incomes above 30,000, compared to 31% across Scotland. In all, 41% of those at school in the City of Edinburgh are entitled to free school meals, reflecting that there are concentrations of deprivation in parts of the City. This is above the national average of 39%. 5 Education and training provision There were 18,279 pupils enrolled at secondary school across Edinburgh in 2014, 29% of whom were S5 and S6, in line with the 29% across Scotland. There were 1,495 SDS-supported MA starts in 2014/15, a slight increase on the 1,465 in 2013/14. 54% of starts were male and the remainder female (46%). There were 1,525 SDSsupported MA leavers in 2014/15. 21,007 students (headcount) were studying at Edinburgh College in 2013/14. Three quarters (75%) of these were studying at FE level and 25% at HE level; 77% of Edinburgh and the Lothians region residents who are at college study at Edinburgh College. 1 60,221 students (headcount) were studying at the Edinburgh University (31,203), Napier University (13,097), Heriot-Watt Edinburgh University (10,301), Queen Margaret University (5,224) and SRUC Edinburgh (396) in 2013/14. There were 22,606 graduates from the region in 2013/14, including 13,827 with a first degree (61%) and a further 8,779 postgraduates (39%). 2 6 Skills mismatches 3 72% of employers in Edinburgh, Fife and the Lothians had recruited in the 2-3 years prior to the UKCES survey, and 32% had taken on leavers from Scottish education institutions (above the 67% and 26% across Scotland). Just over a fifth (21%) of employers in Edinburgh, Fife and the Lothians reported that not all of their staff are fully proficient, just above the average for Scotland of 19% - with skills gaps most likely in elementary staff, operative, sales and customer services, care and leisure and skilled trade occupations. 1 Please note, this data is only available at the regional level, covering Edinburgh, East Lothian and Midlothian. 2 ibid. 3 Please note, data is from 2013 as the UKCES Employer Skills Survey is only undertaken every two years. Further, data is only available at the regional level, covering Edinburgh, East Lothian, West Lothian, Midlothian and Fife local authorities. 6
8 7 Looking forward The population of Edinburgh is forecast to continue to grow strongly, by a further 56,464 over the period from 2014 to 2024, an increase of more than 11%. This compares to 5% growth at the UK level, and almost three times the 4% rise across Scotland. The school roll is projected to decrease slightly by 2% to 17,600 by 2017, before rising slightly to 17,800 by 2018, an overall fall of 1%. Across Scotland, the trend is for a 2% fall over the period to Based on 2012 figures, national employment figures are projected to rise by 5.3% from 2012 to 2022, with the fastest increases occurring between 2017 and The greatest levels of growth are expected in information technology (32%) and health and social work (17%). There is projected to be a fall in agriculture employment (-15%), other manufacturing (-12%) and public administration (-11%). 8 Summary The City of Edinburgh has a largely prosperous resident population and the City continues to perform very well across the majority of economic indicators. It maintains its significant contribution to Scotland s overall output, and GVA growth has been sustained, albeit most recently in line with the Scotland average. The City of Edinburgh continues to be the heart of Scotland s financial and insurance sector, which accounts for more than a fifth of the City s output, and which is more than three times as concentrated in the City as elsewhere. The business base is growing at a rate faster than Scotland and the UK, and is dominated by the higher value added professional, scientific and technical sector. Jobs in the City pay above the national average, and the average Edinburgh resident in full time work also earns more than average. After a surprise fall in the number of employees in employment in the City in 2013, jobs growth returned in Further, the fall in unemployment across Scotland has been even more pronounced in the City than it has been elsewhere, with a tight labour market and a workforce that is more highly skilled than in other parts of Scotland. There are a wealth of Higher Education institutions in Edinburgh, with over 60,000 students and a large proportion of postgraduates. Still, despite the economic success story, there are more than 30,000 workless households in the City and concentrations of deprivation exist. One of the challenges going forward is to meet the demands of the growing economy, whilst seeking to extend the benefits to more local residents. Another is to meet the needs of the growing resident population. The population of the City of Edinburgh has grown strongly over the last decade and is expected to increase even faster to 2024, well above Scottish and Great Britain rates of growth. Employers in Edinburgh are more likely to recruit, and to take on school/ college/ university leavers than nationally. However there remain challenges to attract the higher level skills required to maintain and continue economic growth in the City and to address identified skills gaps reported in the lower-skilled occupations, including elementary and operative roles. 7
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