1. Regional Skills Assessments
Edinburgh, East and Midlothian
December 2016
Glasgow

2. Introduction An Introduction to Regional Skills Assessments (RSAs)
Key Data for Edinburgh, East & Midlothian
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 (SLAED) Group.
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
Edinburgh and Lothians

8. Edinburgh & the Lothians Overview
A mixed region, comprising the city of Edinburgh, East Lothian and Midlothian. It includes very affluent areas along with pockets of urban deprivation and persistent rural disadvantage
Edinburgh is the economic hub of the region, attracting commuters from other parts of Scotland to high value job opportunities. It has a strong reputation in finance and insurance
Overall, people living in the region tend to have relatively high levels of qualifications
The region has a diverse economy, ranging from agriculture and tourism to manufacturing, distribution, retail and a wide range of other sectors
Edinburgh and Lothians

9. Business Trends
Growth of the business base in Edinburgh, East and Midlothian exceeds the Scottish rate (8.1%, v. 7.3%) ( )
1,675 new businesses including in 2015: professional, scientific and technical (+335); business, admin and support services (+320); and information and communication (+200).
98% of businesses are small or micro (<50 employees)
120 employ 250+ people (1% of total)
Business density is higher than the national rate (325 per 10,000 population v. 313)
At 12%, the region has a higher rate of self employment than Scotland (10.8%)
R&D spend per head (£353) substantially exceeds the national and UK wide averages (2014)
The number of businesses in Growth Sectors increased in the year by 5% and at 52%, was above the national figure (46%) (2015)
Greater proportion of the region’s growth sector businesses are in Finance and business services and Creative industries (including ICT) than nationally (43% v. 35% and 30% v. 19%)
The proportion of Food and drink businesses is well below the national average (5% v. 22%)
Growth Sectors account for 34% of all employment in the region
Edinburgh and Lothians

10. Sector Trends and Specialisms
High value added sectors in high representation and high growth quadrant
Good employment growth in major employment sectors – retail, health arts and entertainment and very strong growth in business administration and support
Job losses in key employment sectors of finance and insurance and education and further job losses in industrial employment – production and construction
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
Edinburgh and Lothians

11. Population and Projections
Population of 689,250
12.8% of Scotland’s total population (2015)
A small increase in the population from 2014 to 2015 (+1.2%), greater than national growth (+0.5%)
Over the past ten years (+11% compared to +5%)
Decline in age group while all other groups have grown
Population change
Forecast Population Change, :
Total population forecast to grow by 24% (+163,000, three times the Scotland wide rate) and the working age population by 17% (+76,000)

12. Employment and Travel to Work
73% of working age residents in employment, mirroring Scotland’s employment rate (2015)
Place of Work of Residents, by Local Authority:
Almost three quarters of residents remain in the area to work
The highest proportion of residents of the region working in their home local authority is recorded in the City of Edinburgh
High levels of commuting in to the City of Edinburgh from other parts of the RSA region and other regions to access higher paid jobs
Many residents of East Lothian and Midlothian depend on Edinburgh for employment
Please note, location of employment figures exclude those working outside the UK, on offshore installations or
with no fixed place of work
Edinburgh and Lothians

13. Workforce Trends
Total employment in Edinburgh and the Lothians = 378,300 (15% of Scotland total)
50% work in higher level occupations (2015)
Above Scotland average (42%) and a small increase on the previous year
76% work in private sector, compared to 77% nationally
26% of the employed population work part time (fluctuating between 23% and 27% in the last 10 years), the same proportion as Scotland.
7.4%, 5.3% and 4.3% in Edinburgh, East Lothian and Midlothian are in non-permanent employment, respectively
Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.
Edinburgh and Lothians

14. Unemployment and Participation
The unemployment rate is 5% of the working age population (in line with the UK average but below the Scotland average of 6%)
Across the region, 90% of young people aged are participating, as per Scotland wide
The rate is highest in East Lothian (91%) and, at 88.7%, lowest in Midlothian.
Regionally, 4% are not participating
The rate is 4.2% in Midlothian, 3.5% in East Lothian and 3.7% in Edinburgh City.
The remainder are unconfirmed
Unemployment in the region increased by 0.7ppts which was greater than the national decline (-0.4ppts) from 2014 to 2015.
Within the region the unemployment rate was highest in East Lothian (6%) and lowest in Midlothian (4%).
Unemployment rate: Unemployed as a percentage of the economically active population
Edinburgh and Lothians

15. Qualifications and Skills
At 53%, a higher proportion of working age adults hold SCQF qualifications at levels 7-12 than Scotland wide (43%)
As with Scotland, there is an upwards trend in qualifications
Qualification Change 2005 – 2015:
The Edinburgh region workforce is more highly qualified than national (43%) and UK (37%) workforce on average
Although this hides variations with the City of Edinburgh reporting a rate 14 percentage points above the Scottish average and Midlothian and East Lothian performing below average
Workforce qualified at levels SCQF7-12:
Edinburgh and Lothians

16. Skills Mismatches
61% of employers in West Lothian have recruited staff over the past year (2015)
The same proportion report a skills gap in the current workforce as nationally (13%).
3% of the workforce has a skills gap
8% report at least one hard-to-fill vacancy accounting for 0.7% of the workforce. Corresponding Scottish figures are 6% and 0.8%
Employers in Edinburgh and the Lothians are more likely to report skills under-utilisation
Skills gaps are most prevalent in sales and customer service, machine operatives and skilled trades
71% of employers with skills gaps say it impacts on the business
Edinburgh and Lothians

17. Modern Apprenticeships
Schools
Modern Apprenticeships
Education and Training
The secondary school roll in 2015 was 28,868, 2.8% of Scotland total
92% school leavers had a positive
destination in 2015, in line with the national average
Modern Apprenticeship (MA) uptake increased by 6% from 2014/15
10% of national total in 2015/16
Construction is the most popular MA framework group, 15% of uptake
Heavily gender segregated - 99% male
73% MA achievement rate in 2015/16

18. Further and Higher Education
In 2015/16, at Edinburgh College and Newbattle Abbey College there were 20,585 enrolments
7% of Scotland’s total
77% FE and 23% HE
Top three subjects:
Full-time: Business, management & administration, Engineering, Art & design
Part-time: Languages & ESOL, Care, Engineering
65% successful completion of FE courses
There were over 60,000 students at the five HEIs in the region in 2014/15
Top three subjects:
Business & Admin, Subjects Allied to Medicine and Biological Sciences
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

19. Workforce Growth
The size of the working age population is expected to increase by 17% in Edinburgh, East and Midlothians over the next 20 years, in contrast to a national fall
Nearly 76,243 more people of working age, of which 70,000 will be in Edinburgh. This provides scope to raise GVA considerably through increasing the number of people in work
The challenge is to make sure these additional workers have the skills that employers need
Edinburgh, East and Midlothians is also forecast to have the highest level of employment growth in Scotland (4.6% v. 1.0% nationally). This will mean 17,700 more people are in employment.
This is slower employment growth than over the past ten years ( ) (5.3%)
It also suggests that the number of people in work will grow more slowly than the working age population
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.
Edinburgh and Lothians

20. Jobs and Skills Changes (1)
Total employment (jobs) is forecast to rise by 0.6% per year over the period, this is above the average annual growth of 0.2% expected for Scotland as a whole. Growth at this pace equates to over 24,000 additional jobs in the area by Professional, scientific & technical activities, administrative & support activities and wholesale and retail are expected to account for over half of new jobs (12,300) in the area over the period. The human health & social work sector is also expected to experience significant growth, creating 3,100 jobs. In contrast, significant jobs losses are expected in manufacturing (1,300 jobs) and public administration (1,200 jobs).
Forecast Demand for Jobs ( )
Total Employment Growth
Edinburgh, East & Midlothian 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)
No occupational groups are expected to experience a decline over the forecast. The number of workers in professional occupations will enjoy the biggest increase over (5,900 people) followed by associate professional and technical occupations (2,600 people) reflecting the sectoral growth in professional, scientific and technical activities. Caring, leisure and other service occupations will also experience growth (2,500 people) as will elementary occupations (2,000 people). Managers, directors and senior official (1,300 people), skilled trades occupations (1,300 people) and sales and customer services (1,000 people) will also experience growth, with process, plant and machine operatives remaining relatively static (300 people).
Forecast Changes in Occupational Demand
Edinburgh, East and Midlothian Employment
Change in number of workers (‘000s),
Note: chart uses total employment (people).
Source: Oxford Economics
Glasgow

22. Jobs and Skills Changes (3)
The majority of openings in Edinburgh, East and Midlothian over the forecast period will require individuals with higher level qualifications, this is in part a reflection of the sectoral and occupational trends expected over this period. Individuals qualified to SCQF level 7 or above will account for 61% of the 170,700 openings expected to be created between 2016 and The remaining opportunities will mainly be for individuals qualified to SCQF levels 5-6, equivalent to 30% 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 153,500 openings within Edinburgh, East and Midlothian over the forecast. These openings will occur across all types of occupations including these that are expected to decline in net terms. Expansion demand is expected to result in 17,200 openings between However together with replacement demand, will result in 170,700 openings over this period. Openings will be highest within professional and elementary occupations. Combined these will account for 44% of openings in the region. They each are expected to experience both expansion and replacement demand over the forecast. The total requirement for workers in administrative and secretarial occupations is also expected to rise significantly over the period.
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. Edinburgh, East & Midlothian: Key Implications (1).
Recommended Areas of Focus
Maintaining and increasing higher level skills supply. There is very strong jobs growth forecast in the region, with continuing high demand for professional occupations. This will need a strong supply of high level skills to meet employer demand.
Meeting the needs of employers in key regional sectors. There are a number of growth sectors where demand will need to be met, as well as key occupations where there is high replacement demand. These include:
Accommodation and food services, which has grown strongly in the region and which increases the demand for hospitality and tourism skills;
Care, where there is strong replacement demand and where the growing population will increase demand further;
Financial services, where there the region remains a strong employment centre;
Administration & related occupations, linked to business administration & support where replacement demand is strong;
The professional, scientific and technical sector, where there is both expected jobs growth and strong replacement demand.
Glasgow

26. Edinburgh, East & Midlothian: Key Implications (2).
Recommended Areas of Focus
Encouraging employer investment in skills. Employers continue to need to be encouraged to invest and innovate, which includes investment in skills, in order to meet high levels of skills demand across sectors and occupations.
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.
A need to increase the pool of labour. The increases in jobs and replacement demand means that there is a need to increase the labour supply. Population growth will provide some of this, however there is a need to attract as many as possible into the region’s labour market and share in the region’s success. Routes into work for those groups outside the labour market continue to be required.
There is also a requirement to ensure that those across the region partake in the region’s success, including those in Midlothian, where household incomes are not as high as in Edinburgh City and East Lothian.
Glasgow

27. Edinburgh, East & Midlothian: Key Implications (3).
Recommended Areas of Focus
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 work-based learning 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 demand as a result of the Edinburgh and South of Scotland City Region Deal and other investment. Tackling gender imbalances in the sector can be part of meeting these needs.
Glasgow

28. Appendix: 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 Sector Trends and Specialism Diagram