Achieving Inclusive Growth in the North East 5 th June 2013

Structure of the Presentation Context The Inclusive Growth Research The North East Economy and the IER Achieving Inclusive Growth Introduction to the Discussion Sessions

Context

- Next programme of European Structural Funds - Focussed on 3 pillars – smart growth, sustainable growth and inclusive growth -Inclusive growth – better connectivity between opportunities and people - Represents a significant opportunity for the North East - Next programme of European Structural Funds - Focussed on 3 pillars – smart growth, sustainable growth and inclusive growth -Inclusive growth – better connectivity between opportunities and people - Represents a significant opportunity for the North East Background -Promoting employment and supporting labour mobility -Promoting social inclusion and combating poverty -Investing in education, skills and lifelong learning -Promoting employment and supporting labour mobility -Promoting social inclusion and combating poverty -Investing in education, skills and lifelong learning Three skills and inclusion priorities

The Inclusive Growth Research

Research Questions 1.Which groups or areas experience lower outcomes or are at risk of becoming disengaged with employment or entrepreneurial opportunities? 2.Which groups experience barriers or are under-represented in key growth areas, such as low carbon, creative and digital, research and innovation and advanced manufacturing opportunities? 3.What has been successful in improving aspirations and outcomes for less engaged groups? 4.Does the current skills and employability infrastructure address barriers to employment or enterprise opportunities? 5.What opportunities are there for expanding engagement in STEM subjects, innovation and manufacturing skills amongst under-represented groups and communities? 1.Which groups or areas experience lower outcomes or are at risk of becoming disengaged with employment or entrepreneurial opportunities? 2.Which groups experience barriers or are under-represented in key growth areas, such as low carbon, creative and digital, research and innovation and advanced manufacturing opportunities? 3.What has been successful in improving aspirations and outcomes for less engaged groups? 4.Does the current skills and employability infrastructure address barriers to employment or enterprise opportunities? 5.What opportunities are there for expanding engagement in STEM subjects, innovation and manufacturing skills amongst under-represented groups and communities?

Study Method - Review of labour market position of disadvantaged groups / areas - Analysis of what works in supporting groups / areas - Assessment of existing skills and employability infrastructure - Review of labour market position of disadvantaged groups / areas - Analysis of what works in supporting groups / areas - Assessment of existing skills and employability infrastructure Review of Literature - Consultations with third sector organisations, skills agencies, representatives from business community, sector experts and individuals from disadvantaged groups Gap filling

Study Method Testing and refining Purpose of workshop -Draw on the expertise of those with knowledge of the North East economy and of under-represented groups to answer key questions and make recommendations for the LEP’s approach to inclusive growth Purpose of workshop -Draw on the expertise of those with knowledge of the North East economy and of under-represented groups to answer key questions and make recommendations for the LEP’s approach to inclusive growth

The North East Economy and the Independent Economic Review

Strong employment growth in the last economic cycle: 67,000 jobs added Employment Change in LEP Areas EmploymentChange Net% West of England 451, ,342 70,54516% North East 702, ,514 67,40610% Leeds City Region 1,176,266 1,283, ,5039% Sheffield City Region 620, ,521 55,8889% Greater Manchester 1,072,086 1,161,801 89,7158% Liverpool City Region 551, ,357 33,2266% Derby, Derbys. Nott. and Notts 831, ,743 29,6484% Gtr Birmingham and Solihull 815, ,726 27,6843% Source: Annual Business Inquiry

Changing nature of the North East economy On-going decline of manufacturing sector and growth of service sector (often low added value) Growth of highly skilled professional and associate professional and technical occupations Decline in skilled trades, process, plant and machine operative and admin and secretarial roles A growing business base and increasing skills levels

But still a significant gap with the national* average in a number of areas * Minus London, Source: Annual Population Survey, Regional Accounts, Annual Business Inquiry

The NE Independent Economic Review Overview Provides an independent economic assessment of the economy Identifies priority actions to stimulate growth and productivity Focussed on creating more and better jobs Key finding A shortage of private sector employment 60,000 additional private sector jobs required

Where will growth come from? Low carbon (energy and offshore renewable) Creative and digital Advanced manufacturing Research and innovation Pharmaceuticals Tourism NB - Many of these sectors will require non-specialist roles, e.g. marketing, back office functions etc Still significant employment opportunities in other sectors – e.g. Care, Retail

Potential Sources of Additional Employment

But more jobs is not enough... The North East needs higher skilled and higher paid jobs 60% of its employment growth will be in graduate level jobs In the long-term this will provide progression opportunities within the labour market Growth sectors such as the new economy, tourism and business services provide opportunities at various skill levels

And a major focus on young people and education.. North East Schools Challenge to improve further primary and secondary schools Doubling of youth apprenticeships to strengthen vocational provision Increased access to University education for young people

Achieving Inclusive Growth

Which groups experience lower outcomes? WomenDisabled PeopleLGBT People Young People (under 25) Black and Ethnic Minority People Offenders Older People (over 50)Migrants and Refugees Disadvantaged / Deprived Areas Rural Areas / Less well-connected areas Disadvantage is multi-faceted The interplay of these characteristics, along with geography and connectivity, impacts on economic opportunities

Labour market context

Implications of low economic participation and employment for the North East economy xInability to fully maximise its economic opportunities xSmaller pool of labour available to employers xReduced income in North East xLimited purchasing power xLower levels of business start up rates xReduced innovation levels xOverall economic growth below NELEP’s potential

What Works in Achieving Inclusive Growth?

How to improve aspirations and outcomes Success Factors: Intensive / Outreach support - successful targeting of disadvantaged groups requires a substantial outreach element and intensive support over the long-term Support self employment / community enterprise development - promoting enterprise as an option and providing a continuum of quality pre-start, start up and post start support Involvement of third sector organisations – they understand the barriers and challenges

How to improve aspirations and outcomes Success Factors: Provision of employment coaching and work placements – engaging employers to source work and brokering appropriate candidates into employment Progression to mainstream support – complement and don’t duplicate mainstream support: progress groups to mainstream support once barriers are removed.

Does the skills and employability infrastructure address barriers? Significant disparities in participation in education, employment support, training and apprenticeships.  Low representation of women in science and engineering – 97% of starts in engineering were male  Less than 20% of starts in science, engineering and manufacturing, energy and utilities, construction and automotive are females  Only 7% of starts nationally were by individuals with a learning disability

Enhancing the skills and employability infrastructure 1.Addressing gender gaps in participation 2.Encouraging participation into ‘atypical’ employment 3.Raising women’s educational participation rates 4.Developing a strategy for lifelong learning 5.Building on the strengths of the third sector…

The role of the Third Sector A vital part of the skills and employability infrastructure: Provides employment and volunteering opportunities Improves the skills and experience of disadvantaged groups Provides a voice and influence Attracts investment  What can other sectors learn from the third sector in providing opportunities for disadvantaged groups?

The role of the Third Sector What support does the third sector need to continue playing this role? 1.Closer working between third sector and private sector (capacity building and joint bidding) 2.On-doing engagement between NELEP and third sector 3.More coordinated and proactive approach to joint commissioning of public services contracts by local authorities and other local commissioners 4.Others?

What are the barriers to participation? Employment xLack of technical skills – engagement in STEM subjects from early age xLack of interest in some vocational areas amongst some groups xAccess to low cost transport Enterprise xGrowth focussed enterprise support – may not suit all entrepreneurs xLack of engagement with mainstream business support

Summary The 65,000 additional jobs envisaged in the IER could provide significant opportunities for inclusive employment and growth However there is a need for... An understanding of the opportunities that will arise and the skills / attributes needed to access them Clarity over the support needed to ensure all residents can benefit from these opportunities Agreement on defining and measuring success

Discussion Sessions

Discussion 1: Opportunities in the North East Economy  What employment opportunities are expected to arise in the NE growth sectors?  What employment opportunities will arise in the rest of NE economy?  What opportunities for enterprise are there within the NE economy?  What skills / attributes will be required to access these opportunities?  What are the potential barriers to accessing these opportunities?  Do people within the disadvantaged groups / areas have these skills and attributes and what support do they need to acquire them?

General Barriers to Participation

Specific Barriers to Participation

Employment Opportunities

Enterprise Opportunities

Discussion 2: Delivery of Support to Disadvantaged Groups / Areas  What support is needed?  What are the features of effective support?  How can support best be delivered to disadvantaged groups and areas?  What roles should mainstream and specialist services play?  What are the implications of the IER for institutional capacity and support?

Types of Support Needed

Discussion 3: Success in encouraging Inclusive Growth in the North East  How would you define success?  How would you measuring success in supporting Inclusive Growth?  Is there a need for new indicators and approaches?

Defining Success

Plenary Discussion

 What are the implications of the discussions for achieving Inclusive Growth in the North East?  Recommendations for the Growth Plan  Recommendations for the new European Programme  Other issues / priorities