1. Skills Context – North East LEP 22 th March 2016 Michelle Duggan Fiona Thom

2. Introduction Current context – overview of evidence –Population –Labour market –Skills Future projections –Population –Labour market –Skills North East LEP strategy and policy

3. Current context – evidence base

4. Current North East LEP economy

5. Population of North East LEP

6. Employment rates have returned to pre recession levels and the gap is closing with the national average… …employment levels are still consistently below the national average, and the region has the highest unemployment and economic inactivity levels in the country. Source: Derived from NOMIS

8. Economic inactivity levels are highest in the country, but falling. Ill health represents the largest proportion of those who are inactive (28%) much higher than national average. This has been slowly falling in recent months and inactivity due to being a student and looking after family/home has increased. Source: Derived from NOMIS

10. NEET levels are the highest in the country and rising… Source: DWP

11. Unemployment of those aged 50+ is another key challenge for the area Age Group 16-1920-2425-4950-6465+ Average England 35.5%66.9%82.7%69.8%10.5% Highest rank LEP 52.8%79.1%88.4%79%22% NE LEP36.3% (23 rd )62.4% (30 th )79.6% (34 th )63.7% (38 th )6.8% (37 th ) Lowest Rank LEP 22.7%55.5%74.3%62.1%6.1%

12. Key sectors in the North East Over 80% of our workforce jobs are in services and this is growing. 11% of workforce jobs are in self employment. Source: ONS Oct 15

13. The skills profile of current population is lower than the national average… 29% working age population have higher level skills vs. national average of 36% The skill level gap in the older working age group is the most striking, with a larger proportion of over 50’s with L1/2 or no qualifications Whilst the younger working age group who are the flow into the labour market have higher level skills Source: ONS (Nomis) Jan-Dec 2014

14. Looking at occupations of those in employment in the region, we see a similar pattern…

15. Yet, there is now more people qualified to L4 than jobs available at this level…

17. Education profile – flow into labour market Source: DfE

19. A level achievement is below the national average… Those achieving high grades is even lower…a key challenge for the region.

21. Apprenticeship starts are increasing… The top three subjects for apprenticeship starts: health and social care (40%) administration (40%) manufacturing technologies (11%). 18% of workplaces in the North East employ apprentices, the highest in the country. (National average of 14%) The NE target is 30% by 2020.

22. Demand for skills – vacancy data Top 10 occupations…Top 10 specialist skills… Source: Active Informatics

23. Future projections

24. Population rising, driven by an increase in older age groups… 2014 2024 2014 2024 NE LEP England Population age breakdown: 2014 and 2024

25. There is expected to be a change in occupational requirement between in the region driven by new growth and replacement demand….

26. …across all occupational levels Source: Working Futures UKCES

27. Demand for higher skills

28. There is expected to be a continued decline in manufacturing sector and primary sectors with a growth in business and services.

29. Strategy / Policy

30. Future employment sectors – smart specialisation –Passenger Vehicle Manufacturing - major foreign inward investments of strategic national importance which can stimulate supply chain innovation and business growth and inward investment –Subsea and Offshore Technology – opportunities for indigenous business growth building on national and local innovation assets/capabilities, and attraction of new enterprise –Life Sciences and Healthcare - a major manufacturing, employment and export footprint, diverse industrial base and local R&D capabilities. A potentially strong translational environment in the local public sector –Creative, Digital, Software and Technology Based Services - a mixed AEA which shares technology and skills bases and provides a key enabling technology capability to other business growth industries. Strong science assets Tactical sector approaches – health and social care, rail / transport, inward investment priorities Focus on key sectors in the future

31. Challenges and responses Devolution –Area based reviews –Whole system view Living wage –Quality and structure Aging population and replacement demand –Forecasting and workforce planning for key industries Skill levels –Target investment, stimulate employer investment Drive up quality apprenticeships –Support transition to the levy, campaigns and influencers Coherence in IAG –Create a shared framework for delivery

32. What next? Refine the communication and information output Create an interactive approach to intelligence Develop a dashboard for performance Develop evidence base as part of the SEP refresh and economic evidence review Investigate matching tools and opportunities for matching supply and demand. Collaborate and work in partnership