1. Regional Skills Assessments
Inverness City Region*
December 2016 *Also refers to Highland Local Authority
Aberdeen City and Aberdeenshire

2. Introduction An Introduction to Regional Skills Assessments (RSAs)
Key Data for Inverness City 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, Highlands and Islands Enterprise, Scottish Enterprise, the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development 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, FE and HE), Other Economic Activity, Skills Mismatches and Forecasting
Underpinned by the 2016 data matrix of 7 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 slidepack provides a summary of the data for this area

8. Inverness City Region Area Overview
Covers a very large geographical area
Diverse set of circumstances between the city of Inverness and the relatively populous Inner Moray Firth, and remote communities on the west coast
Inverness has grown to be a regional centre for much of the Highlands and Islands
The size of the area means that there are local specialisms / strengths - e.g. tourism in Fort William and Skye, energy in Caithness - while primary industries remain important in the more remote areas
The public sector is an important part of economic activity throughout the area
Inverness City Deal area

9. Business Trends
2015 business base growth was below the Scottish rate (5.5% v. 7.3%), a continuation of the trend since 2012
555 new businesses including: Business, admin and support services (+130), and Professional, scientific and technical (+115)
99% of businesses are small or micro (<50 employees)
20 employ 250+ people (0.2% of total)
Business density is higher than the national rate (457 per 10,000 population v. 313)
Self employment rate higher than Scotland (11.7% v. 10.8%)
R&D spend per head is below the national average (£121 v. £169) (2014)
49% of businesses are in Growth Sectors – slightly above the national figure (46%) (2015)
The number of businesses in Growth Sectors increased at a lower rate (2%) than in Scotland (4%) ( )
Greater proportion of Growth Sector businesses in Food and Drink than nationally (40% v. 22%) but less in Financial and Business Services (22% v. 35%)
Growth Sectors account for a higher percentage (35%) of total employment than in Scotland (28%)
The Growth Sectors are: Food and Drink, Financial and Business Services, Life Sciences, Energy (including Renewables), Sustainable Tourism (Tourism related Industries) and Creative Industries (including Digital)
Inverness City Deal area

10. Sector Trends and Specialisms
Largely low value added sectors in high representation and high growth quadrant
Good employment growth in significant employment sectors-Health, Production- and in Professional scientific & technical. Little employment growth in Accommodation & food
Job losses in high value added sectors of Financial & insurance and Information & communication
Explanation
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
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 an explanation: Explanation of Sector Trends and Specialism diagram
Inverness City Deal area

11. Population and Projections
Population of 234,000
4% of Scotland’s total population (2015)
A small increase over the year (0.4%) similar to national growth (0.5%)
Population change :
Forecast Population Growth, :
Total population forecast to grow by 2% - well below rate for Scotland (9%)
Working age population projected to fall by 14% (4% fall nationally)
In the ten years to 2015 total population grew by 7% (+5% nationally)
Overall growth in working age population same as for Scotland, +4%
Decline in 0-15 and age groups in the Inverness City Deal area, but all other age groups have grown
Inverness City Deal area

12. Workforce Trends
Total employment in Inverness City Deal area is 112,700 (4% of Scotland total)
Employment has grown by a total of 10% since 2012, a faster rate than in Scotland (5%)
35% work in higher level occupations (2015)
Below Scotland average (42%)
72% work in private sector, compared to 77% nationally
31% of the employed population work part time, higher than in Scotland (26%)
5.3% of employees in the Inverness City Region area are in non-permanent posts – the same rate as for Scotland
Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.
Inverness City Deal area

13. Employment and Travel to Work
81% of working age residents in employment, much higher than in Scotland (73%) (2015)
Vast majority (96%) work within the Inverness City Region area
The remainder are split evenly between working elsewhere in the Highlands and Islands (2%) and outwith the Highlands and Islands (2%)
Main areas for out-commuting are to the east: Moray and Aberdeen City
Please note, location of employment figures exclude those working outside the UK, on offshore installations or
with no fixed place of work
Inverness City Deal area

14. Unemployment and Participation
The unemployment rate is 4% (2015) of the economically active working age population, down from 5% in the previous year (2014), while Scotland (6%) was unchanged
91% of young people aged are participating, 1pp above the Scottish rate
5% are not participating (Scotland 4%)
The remainder in the Inverness City Region area (4%) are unconfirmed
Unemployment in the Inverness City Region area has been consistently below the Scottish average, although the gap has narrowed in recent years
Unemployment measure = ILO unemployed: actively seeking and available for work
Unemployment rate = unemployed as a % of economically active population
Inverness City Deal area

15. Qualifications and Skills
Pattern of change in qualification levels differs markedly from that seen nationally
Qualifications Change 2005 – 2015:
There has been a 4ppt fall in the number holding SCQF qualifications at levels 7-12, while Scotland has seen a rise of 14ppt
There has been an increase of more than 10ppt in the numbers with no qualifications, compared to a decrease of c5pp in Scotland
39% of working age adults hold SCQF qualifications at levels 7-12, well below the Scotland average (43%) (2015)
Inverness City Deal area

16. Skills Mismatches
Half of Highlands and Islands businesses have recruited staff over the past year (2015), slightly below national average (53%)
Skills shortages slightly more prevalent than nationally
1.0% of employers report vacancies that are hard-to-fill due to skills shortages, compared to 0.8% in Scotland as a whole
Highlands and Islands employers more likely to report skills gaps but less likely to state under-utilisation of skills
Skills gaps particularly prevalent in elementary occupations
76% of employers with a skills gap say there is an impact on the business (70% nationally) but are more likely to say it is a minor one

17. Modern Apprenticeships
Schools
Modern Apprenticeships
Education and Training
The secondary school roll in 2015 was 13, % of Scotland total
94% school leavers had a positive
destination in 2015, compared with 92% nationally
MA uptake increased by 4% from 2014/15 to 1,320
5% of national total in 2015/16
Construction is the most popular MA framework group
24% of uptake
Heavily gender segregated - 97% male

18. Further and Higher Education
Scotland’s colleges and universities play a major role in developing a skilled workforce. In the Highlands and Islands, the University of the Highlands and Islands (UHI) provides educational opportunities to residents and also attracts students to the region.
Due to the unique and complex tertiary nature of UHI, data for UHI and its associated campuses has not been included.
The Scottish Funding Council (SFC) and Skills Development Scotland (SDS) are working with UHI to develop the most appropriate way of presenting these complex data sets.

19. Workforce Growth
Working age population is forecast to fall by 14% over the next 20 years, and a larger decrease can be expected in the more remote parts of the area
These more remote parts face productivity challenges from travel time and distances from markets / main economic centres
Forecast employment growth for the region is below the national average for
(0.5% v. 1.0% nationally)
This equates to an additional 600 jobs by 2024
Although this represents slower employment growth compared to the period (1.8%)
Improving productivity will become the key determining factor in increasing economic prosperity
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.
Inverness City Deal area

20. Jobs and Skills Changes (1)
Total employment (jobs) is forecast to increase by 0.2% on average each year from 2016 to 2024, the same as the equivalent rate expected for Scotland as a whole. Such growth equates to 1,500 more jobs in the region by Administrative and support and professional, scientific and technical activities are expected to enjoy growth of 700 jobs each over the forecast. However such gains will be offset by falling employment within the public and manufacturing sectors. The number of jobs within manufacturing sector is expected to fall by 800 and public administration and defence is expected to fall by 500 jobs over the forecast.
Forecast Demand for Jobs ( )
Total Employment Growth
Inverness City Deal 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)
Replacement demand will result in 65,500 openings within the Inverness City Region over the forecast. Expansion demand is expected to result in 1,200 more openings between Together with replacement demand, this will result in 66,700 openings over this period. Openings will be highest in associate professional and technical and skilled trades occupations, with both driven by replacement demand. The total requirement for workers in professional and elementary 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

22. Implications for Skills Investment Planning

23. Highland: Key Implications (1).
Key Labour Market Changes and Dynamics
The strong jobs recovery evident in Highland in 2012 to 2014 stalled in 2015, with no jobs growth, which was the case for Scotland as a whole. Highland experienced job losses following the global downturn, however the strong employment growth prior to 2015 means there are still 5% (and 5,000+) more jobs compared to 2009.
There were however sector shifts in Job losses were evident in traditional sectors including production (-800), agriculture, forestry & fishing (-400) and transport & storage (-600), as well as business administration & support (-800) and retail (-500). At the same time there were job increases in accommodation & food services (+1,300), arts, entertainment & related (+500), health (+500), education (+500), as well the higher value added professional, scientific & technical services sector (+200). Accommodation & tourism is now the second largest employment sector after health.
The business base has grown, although at a rate below the Scotland average. Overall output has increase just above the Scotland rate, with output per worker slightly below average. Highland continues to make the transition to a more knowledge-based economy – the challenge is to ensure new service jobs are high value added, and that growth in Inverness extends across the whole area.
Glasgow

24. Highland: Key Implications (2).
Skills demand and supply
Population growth has been above the Scotland rate of growth over the last 10 years, although it is forecast to increase by just 2% to 2037 at a time of continued growth for Scotland as a whole. The working age population is expected to fall by 14%. Attracting and retaining young people remains important.
Highland has more employed in skilled trades, administration, sales, care and operatives than the Scotland average, and replacement demand will be strong for all of these roles. There are expected to be 36,000 replacement demand openings, highest for elementary occupations and for professionals, where Highland remains under-represented.
The top MA frameworks by take-up are construction and hospitality & tourism, and these comprise almost half the total, followed by health and social care, retail & customer services and other services (including ICT professionals).
Glasgow

25. Highland: Key Implications (3).
Recommended Areas of Focus
Priorities for the Highland area include:
Increasing the number of jobs and more widely – the strong jobs growth of recent years has stalled, and there is a need to extend growth in Inverness more widely across the region..
Increasing the quality of jobs – many new jobs have been associated with tourism, relatively low paid and value added, with more higher value added services required..
Creating a culture of employer investment. Employers continue to need to be encouraged to invest and innovate, which includes investment in skills, including investment in young people. They also need an outward focus for new markets.
Meeting the skills needs of employers – there are important Highland sectors and occupations, including skilled trades, care, sales, administration, hospitality and health. Local skills activity must be encouraged, and focused on employer demand.
A need for progression routes and pathways. Demand for skills in the region is strongest amongst elementary and professional occupations. Progression needs engendered and supported.
A need for flexible provision. Non traditional employment is increasing, and this means less conventional career paths, and movement between sectors. Skills provision must be equally flexible, with work-based learning routes part of this.
Glasgow

26. 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 main presentation: Sector Trends and Specialisms