1. Regional Skills Assessments
Ayrshire Region
December 2016

2. Introduction An Introduction to Regional Skills Assessments (RSAs)
Key Data for the Ayrshire Region
Implications for Skills Investment Planning

3. An Introduction to RSAs

4. What are RSAs?
A single, agreed evidence base on which to base future investment in skills, built up from existing datasets
Partnership between Skills Development Scotland (SDS), Highlands and Islands Enterprise (HIE), Scottish Enterprise (SE), the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development Group (SLAED).
Purpose:
Support SFC, regional colleges, strategic bodies and college boards in negotiating Regional Outcome Agreements (ROAs) for academic years
Provide a framework for aligning SDS investment in individuals and businesses
Assist partners in planning their strategic investment in skills
Highlight gaps in national and regional skills evidence

5. Why are they important for skills planning?
They provide a high quality and consistent source of evidence about economic and skills performance delivery at various spatial levels.
They can be used to identify regional strengths and any issues or mismatches arising, and so inform thinking about future planning and investment at a regional level.
They are accessible online to support all partners in their planning.
They provide a core evidence base to support the Scottish Skills Planning Model.

6. Scottish Skills Planning Model

7. What do RSAs cover?
Economic Performance, Profile of the Workforce, People and Skills, Education and Training (MAs, schools), Other Economic Activity, Skills Mismatches and Forecasting
Underpinned by the 2016 data matrix of seven workbooks, containing data on over 100 social and economic indicators
With data at various spatial levels: Regions; City Region Deal; Local Authority
The matrix only draws upon official datasets (including APS, BRES, UKCES, UK Business Counts, Census, Scot Gov datasets) and partner data (SFC, SDS, SE, HIE).
The data matrix is found here:
This slide pack provides a summary of the data for this area

8. Ayrshire Overview
An area adjusting to the decline of traditional industries, with South Ayrshire adapting more quickly than East and North Ayrshire.
North and East Ayrshire have better access to other job markets i.e. Glasgow, which widens residents’ employment opportunities.
A falling population will make it challenging for local businesses to recruit the workforce they need.

9. Business Trends
Growth in the number of businesses has out-paced national growth (2010 – 2015)
+9% growth compared to +7% nationally
New businesses in 2015 concentrated in 3 sectors: professional, scientific & technical (+135); other service activities (+125); and administrative and support services (+120)
98% of businesses (9,440) are small or micro (<50 employees), 25 employ 250+
259 business per 10,000 population, compared to 313 per 10,000 nationally
Self-employment is marginally higher than the Scotland average (11.2% v 10.8%)
R&D per head spend only £29 compared to £169 Scotland wide (2014)
Only 43% of Ayrshire businesses are in Growth Sectors (46% nationally) (2015)
Greater proportion of Ayrshire Growth Sector businesses are in food and drink than nationally (28% v. 22%) and sustainable tourism (24% v. 18%)
Growth Sectors account for 23% of employment, compared to 28% nationally

10. Sector Trends and Specialisms
Limited sectors represented in high growth quadrant and very weak employment growth overall, with some exceptions including health.
Significant job losses in major sectors including production and arts, entertainment & recreation.
Substantial job losses in two national Growth Sectors – finance and insurance and information and communication.
Note: SIC Section A: Agriculture, Forestry and Fishing omitted as data for farm agriculture (SIC subclass 01000) is not available sub-nationally
Click here for explanation: Explanation of Sector Trends and Specialism diagram

11. Population and Projections
Population of 370,590
6.9% of Scotland total (2015)
Modest population decline (-0.1%) over the past year compared to +0.5% growth nationally
Total population has remained stable (at a time of 5% growth Scotland wide) but with movement towards an ageing population
Population change :
Driven by growth in the 65+ (+21%) age group
All three areas have seen decline in the population and age group
Forecast Population Growth, :
Total population expected to decline (-14,700) compared to an increase nationally (-4% compared to +8%)
Driven by significant decline (-47,200) in working age population (-20% compared to -4% nationally)
Decline in working age population is the 2nd highest of all 13 regions

12. Employment and Travel to Work
69% of working age residents are in employment, below Scotland’s employment rate (73%)
Place of Work of Residents, by Local Authority:
22% of employed residents work outside Ayrshire
South Ayrshire is the most self-contained labour market, with 68% of those employed working within their home LA area, and a further 17% in the rest of the Ayrshire RSA region
East Ayrshire has the fewest working within their home area (54%) but most commuters work in other parts of Ayrshire (24%)
Key destinations for out-commuting are Glasgow (10%) and Renfrewshire (4%)
Please note, location of employment figures exclude those working outside the UK, on offshore installations or with no fixed place of work

13. Workforce Trends Total employment in Ayrshire = 125,400
Employment has fallen by 2% since 2009, 1 of 5 regions to record a decline
However employment has started to increase since 2012
38% worked in higher level occupations in 2015
Below Scotland average (42%) but slight increase from previous year
Greater increase in higher level occupations ( ) in East Ayrshire than the rest of the region
72% worked in private sector, compared to 77% nationally, in 2015
In 2015, 25% of those in employment worked part-time, with the percentage fluctuating between 24% and 28% over the past ten years
4% are in non-permanent employment, compared to 5% in Scotland
Rises to 5.6% in North Ayrshire
Nationally, 2% are employed on zero hours contracts
Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.

14. Unemployment and Participation
Unemployment rate declining, but at 8.2% remains well above the Scottish (5.9%) and UK wide averages (5.4%).
90% of year olds are Participating, in line with the national profile, although this is lower in East Ayrshire (89%) and higher in South Ayrshire (91%).
Unemployment in the region fell at a similar rate to nationally (-0.3ppt v. -0.4ppt) from 2014 to Within the region North Ayrshire had an increase (+3.7ppt). East Ayrshire had a decrease of -2.9ppt and South Ayrshire had a decline of -1.7ppts.
Unemployment rate: Unemployed as a percentage of the economically active population

15. Qualifications and Skills
An increasingly highly qualified workforce ( )
Increase in the proportion holding levels 7-12, though still below national average
Proportion with no qualifications (13%) remains higher than nationally (9%)
But still less well-qualified than is the case nationally
Fewer working age adults hold SCQF qualifications at levels 7-12 than nationally, although it is in line with the UK average (37%)

16. Skills Mismatches
48% of Ayrshire businesses have recruited staff in 2015, compared to 53% nationally
Skills shortages in the workforce are less prevalent than nationally
Hard-to-fill vacancies equivalent to 0.5% of the workforce, down from 0.7% in the 2013 Employer Skills Survey, compared to 1.1% nationally
Skills shortage vacancies equivalent to 0.3% of the workforce, down from 0.6% in the 2013 Employer Skills Survey, compared to 0.8% across Scotland as a whole
Ayrshire employers are less likely to report skills gaps and under-utilisation of skills
Skills gaps remain particularly prevalent in machine operative occupations
In line with the national trend, 70% of employers with a skills gap say there is an impact on the business

17. Modern Apprenticeships
Schools
Modern Apprenticeships
Education and Training
The secondary school roll in 2015 was 20,489, 7.3% of Scotland total
92% school leavers had a positive
destination in 2015, in line with the national average
Modern Apprenticeship (MA) uptake increased by over 4% from 2014/15
8% of national total in 2015/16
Construction most popular MA framework group
23% of uptake
Heavily gender segregated - 98% male
74% MA achievement rate in 2015/16

18. Further and Higher Education
In 2015/16, at Ayrshire College there were 17,160 enrolments
6% of Scotland’s total
82% FE and 18% HE
Top three subjects:
Full-time: Care, Engineering, Sport & Leisure
Part-time: Special Programmes, Engineering, Care
61% successful completion of FE courses
There were over 2,600 students at the two HEIs in the region in 2014/15
Top three subjects:
Subjects Allied to Medicine, Creative Arts and Design, Education
HE/FE data is available at regional level only. Data relates to enrolments at FE and HE Institutions in the region, not residents unless otherwise stated. Data provided by SFC and HESA
Aberdeen City and Aberdeenshire

19. Workforce Growth
The size of the working age population is expected to fall faster in Ayrshire than in Scotland as a whole over the next 20 years
Over 47,000 fewer people of working age, reducing the scope to raise GVA through increasing the number of people in work
Challenge in providing the skilled labour employers need as older workers retire
Ayrshire is one of seven regions where the number of people in employment is expected to fall from 2016 to 2024 (-1.2% v. 1.0% rise nationally). This will mean 1,600 fewer people are in employment
This is similar to the decline experienced in the region from 2006 to 2016 (-1.4%)
Note: analysis uses total employment (people) rather than total employment (jobs).
The former figure will be higher as a person can have more than one job.
Improving productivity will become the key determining factor in increasing economic prosperity

20. Jobs and Skills Changes (1)
Total employment (jobs) is forecast to contract by 0.2% per year on average over the period, average annual growth of 0.2% is expected for Scotland as a whole. This rate of decline is equivalent to the loss of over 1,500 in the area by The biggest job losses are expected in the manufacturing sector, with employment falling by 1,500 jobs by Employment within public services and wholesale & retail trade is also expected to fall with the loss of 900 & 400 jobs respectively. However, administrative & support activities and construction, will enjoy some modest job gains along with professional, scientific & technical activities and transport and storage.
Forecast Demand for Jobs ( )
Total Employment Growth
Ayrshire Employment
% annual average change
Change in total jobs (‘000s),
Note: chart uses total employment (jobs) rather than total employment (people).
The former figure will be higher as a person can have more than one job.
Source: ONS / Oxford Economics
Glasgow

21. Jobs and Skills Changes (2)
The number of workers in nearly all occupational groups are forecast to fall from 2016 to 2024 given the relatively weak labour market outlook for Ayrshire. Growth is expected only in the caring, leisure and service occupations (100 people). The number of workers in administrative and secretarial occupations is set to fall by the greatest amount (500 people), followed by those in process, plant and machine operatives (300 people). Higher skilled occupations such as managers, directors and senior officials, professional occupations and associate professional and technical occupations are also forecast to decrease over the period.
Forecast Changes in Occupational Demand
Ayrshire Employment
Change in number of workers (‘000s),
Note: chart uses total employment (people).
Source: Oxford Economics
Glasgow

22. Jobs and Skills Changes (3)
Although there will be limited growth in jobs, the need to replace workers leaving the labour market will create a number of job openings. The majority of openings in Ayrshire over the forecast will require individuals with higher level qualifications. Individuals qualified to SCQF level 7 or above will account for 50% of the 51,600 openings expected to be created between 2016 and The remaining opportunities will mainly be for individuals qualified to SCQF levels 5-6, equivalent to 39% of openings over the forecast period. There will be limited demand for those with qualifications below this level.
Forecast employment change by Qualification ( )
Notes:
table uses total requirement (people)
totals may vary from previous slide due to rounding within the body of the table
Source: Oxford Economics
Glasgow

23. Jobs and Skills Changes (4)
Replacement demand will result in over 53,500 openings within Ayrshire region from 2016 to These openings will occur across all types of occupations including those that are expected to decline in net terms. Expansion demand is expected to fall by 1,800 between However large replacement demand, will result in 51,700 openings over this period. Elementary occupations and professional occupations will account for the vast majority of the requirement over the forecast. There will also be demand for sales and elementary occupations, driven by replacement demand and caring, leisure and other service occupations, driven largely by replacement demand and modest expansion demand..
Forecast Demand for Jobs ( )
Notes:
table uses total requirement (people)
totals may vary from previous slide due to rounding within the body of the table
Source: Oxford Economics
Glasgow

24. Implications for Skills Investment Planning

25. Ayrshire Region: Key Implications (1).
Recommended Areas of Focus
Continuing to increase the number of private sector jobs. Although there has been recent jobs growth, many of these have been further public sector jobs. Growing the private sector jobs base is a regional priority.
Increasing the quality of jobs. As well as more jobs, there is a requirement for more better quality jobs. Recent private sector jobs growth in accommodation and food services, for example, will be relatively low pay and low value added. There remains more that needs to be done to move to a greater knowledge-based economy in the region.
Creating a culture of employer investment. Employers continue to need to be encouraged to invest and innovate, which includes investment in skills. The supply of skills must be available to satisfy increased and stimulated demand.
Engender more enterprise. A key route to more private sector jobs is to increase the start-up rate and business density. Although birth rates have increased, they still lag the Scotland average.
Glasgow

26. Ayrshire Region: Key Implications (2).
Recommended Areas of Focus
Sectorally, there is a need to meet the needs of employers (1). This includes the important health and social care sector. The ageing population have care needs that need to be met over time.
Sectorally, there is a need to meet the needs of employers (2). There are other key sectors and occupations in the regional economy where replacement demand is strong, including skilled trades and tourism. These require work-based learning routes into, and upwards, within sectors.
The specific needs of the engineering sector continue to be met. There will be challenging times ahead for the sector, yet it still contributes a disproportionate amount of output.
A need for progression routes and pathways. Demand for skills in the region is strongest at the upper and lower skills levels – professional and elementary occupations – and so progression to upper skills levels needs to be engendered and facilitated.
Glasgow

27. Ayrshire Region: Key Implications (3).
Recommended Areas of Focus
A need to increase the pool of labour. There are many outside the labour market, and these are not available to employers. Routes into work for these groups continue to be required. There is also a need to reduce the proportion with no qualifications.
A need for flexible provision. Non-permanent employment is increasingly a feature of the Scotland economy and more of the future jobs are expected to be part-time. Non traditional employment also means less conventional career paths, and movement between sectors. Skills provision must be equally flexible, with Foundation Apprenticeships and work placement programmes such as the Certificate of Work Readiness a feature of this.
A need to meet the region’s infrastructure needs. This will require adequate construction, engineering and professional skills given anticipated levels of Ayrshire Growth Deal and other investment. Tackling gender imbalances in the sector can be part of meeting these needs.
Glasgow

28. Explanation of Sector Trends and Specialism diagram
The Sector Growth diagram allows three pieces of sector information to be displayed, providing a useful overview of the local economy. The diagram includes: Sector size (in terms of employment) – shown through the relative size of the dot representing the sector. Sector concentration relative to the Scottish average – The level of concentration is illustrated on the vertical axis through the Location Quotient. The Location Quotient is a measure of the concentration of industry in an area compared to the national average. It produces an index whereby a score of 1 indicates the industry employment concentration is the same both in the local area and nationally, more than 1 represents a higher concentration and less than 1 a lower concentration. Sector average annual growth rate – The horizontal axis shows the average annual employment growth rate of each sector over the past five year period. The diagram includes four quadrants: Top right quadrant - sectors that have shown employment growth and are more highly concentrated in the local area than the national average Bottom right quadrant – sectors that have shown employment growth but are less highly concentrated in the local area than the national average Top left quadrant – sectors that sectors that have shown employment decline and are more highly concentrated in the local area than the national average Bottom left quadrant - sectors that sectors that have shown employment decline and are less highly concentrated in the local area than the national average
Click here to go back to the main presentation: Sector Trends and Specialisms