1. Regional Skills Assessments
Edinburgh and South East Scotland City Region
December 2016
Aberdeen City and Aberdeenshire

2. Introduction An Introduction to Regional Skills Assessments (RSAs)
Key Data for Edinburgh and South East Scotland 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 (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, 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 slide pack provides a summary of the data for this area

8. The Edinburgh & South East Scotland City Region RSA

9. Edinburgh & South East Scotland City Region Overview
A mixed region, comprising the City of Edinburgh, East Lothian, Fife, Borders, West Lothian and Midlothian. Includes very affluent areas along with pockets of urban deprivation and persistent rural disadvantage
Edinburgh is the economic hub of the region, attracting commuters 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
A diverse economy, ranging from agriculture and tourism to manufacturing, distribution, retail and a wide range of other sectors
Edinburgh and Lothians

10. Business Trends
Growth of the business base in exceeded the Scottish rate (8.0% v. 7.3%)
3,000 new businesses including: professional, scientific and technical (+635); business, admin and support services (+560) and information and communication (+410)
98% of businesses are small or micro (<50 employees)
250 employ 250+ people (0.4% of total)
Business density is lower than the national rate (302 per 10,000 population v. 313)
Self employment rate marginally higher than Scotland (10.9% v. 10.8%). Highest in rural areas such as East Lothian and the Borders
R&D spend per head exceeds the national average (£291 v. £169) (2014)
The number of businesses in Growth Sectors increased by 5% in At 49%, it is above the national figure (46%)
Greater proportions of Edinburgh & South East Scotland Growth Sector businesses in Finance and Business services and Creative industries (including ICT) than nationally (39% v. 35% and 25% v. 19%)
Growth Sectors account for 29% of total employment
Edinburgh and Lothians

11. Sector Trends and Specialisms
Some 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, information and communication and education and further job losses in industrial employment – production and construction
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 explanation: Explanation of Sector Trends and Specialism diagram
Edinburgh and Lothians

12. Population and Projections
Population of 1,349,910
A quarter of Scotland’s total population
A small increase in the population over the year (+0.8%) compared to national growth of 0.5%
Faster growth over the past ten years (+8% compared to +5%)
Decline in and age groups while all other groups have grown
Population change
Forecast Population Growth, :
Total population forecast to grow by 16% (+210,955), twice the Scotland wide rate
Working age population projected to increase by 5% (+44,600). Masks area differences i.e. Working age population expected to decline by 20% in Borders
Edinburgh and Lothians

13. Workforce Trends
Total employment in E&SES = 634,900 (30% of Scotland total)
45% work in higher level occupations, ranging from 39% to 53% across local authorities
Above Scotland average (42%) and a small increase on the previous year
76% work in private sector, compared to 77% nationally. Particularly high in West Lothian (81%)
26% of the employed population work part time, lowest rate is West Lothian (22%) and highest is East Lothian (31%)
6.3% in Edinburgh & South East Scotland are in non-permanent employment. Highest rate is City of Edinburgh and lowest is West Lothian
Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.
Edinburgh and Lothians

14. Employment and Travel to Work
73% of working age residents in employment, mirroring Scotland’s employment rate
Place of Work of Residents, by Local Authority
93% of residents remain in E&SES to work
The highest proportion of residents of the region working in their home local authority is recorded in the City of Edinburgh
More residents of Midlothian and East Lothian work out of their home area than in it
High levels of commuting to Edinburgh from other parts of E&SES and other regions to access higher paid jobs
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

15. Unemployment and Participation
The unemployment rate is 6% of the economically active working age population and remains above pre-recession levels
Across Edinburgh & South East Scotland, 89% of young people aged are participating, 1% below the Scottish rate
Participation rate is highest in Borders and East Lothian (91%) and lowest in Fife (88%).
Regionally, 4% are not participating
Non-participation is highest in Fife (5%) and lowest in East Lothian (2.7%).
The remainder are unconfirmed
The unemployment rate has fallen in East Lothian (-0.1ppts) and Midlothian (-1.8ppts) and risen between 1.0ppts and 1.4ppts in the other four areas over the past year. Overall across the Edinburgh & South East Scotland region the rate increased by 0.9ppts, compared to a -0.4ppts decline across Scotland as a whole.
Unemployment rate: Unemployed as a percentage of the economically active population
Edinburgh and Lothians

16. Qualifications and Skills
At 47%, 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 & South East Scotland City Region workforce is more highly qualified than average
Although this hides variations, with the City of Edinburgh reporting a rate 14% above the national average and Midlothian and West Lothian performing below average
Workforce qualified at levels 7-12:
Edinburgh and Lothians

17. Skills Mismatches
Across the regions Edinburgh & South East Scotland, between 10% and 17% of employers report a skills gap in the current workforce. The national figure is 13%
Employers in Fife are most likely to report skills gaps and under-utilisation
Skills gaps are most prevalent in sales and customer service, machine operatives and skilled trades
Sizable proportions of employers with skills gaps say it impacts on the business, from 63% in West Lothian to 73% in Fife
Percentage of employers reporting skills gaps and under-utilisation:
Edinburgh and Lothians

18. Workforce Growth
Working age population is expected to increase by 5% in E&SES over the next 20 years, in contrast to a national fall
This is largely driven by a large increase in City of Edinburgh and to a lesser extent, East Lothian
The challenge is to make sure these additional workers have the skills that employers need
Edinburgh City Region area is forecast to have employment growth of 2.8% ( ), compared to 1.0% growth nationally. This equates to an additional 18,400 people in employment in E&SES
This represents faster employment growth than over the past ten years ( ) (2.0%)
However, the wider City Deal area is forecast slower growth than the Edinburgh, East and Midlothian RSA (4.6%) ( )
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.
Note: There has been a slight delay in finalising data from SFC. This will follow in 2017
Edinburgh and Lothians

19. Modern Apprenticeships
Schools
Modern Apprenticeships
Education and Training
The secondary school roll in 2015 was 65,985, 23% of Scotland total
92% school leavers had a positive
destination in 2015, in line with the national average
MA uptake increased by 7% to 5,495 in 2015/16, exceeding the national increase of 2%
Construction is the most popular MA framework group, 16% of uptake
Heavily gender segregated - 99% male
MA achievement rates up by 1ppt from 2014/15 to 74% (national achievement rate 76%)

20. Further and Higher Education
In 2015/16, there were 51,985 enrolments in the City Deal region
18% of Scotland’s total
77% FE and 23% HE
Top three subjects:
Full-time: Engineering, Business, management & administration and Care
Part-time: Engineering, Care and Languages & ESOL
64% successful completion of FE courses
There were over 73,905 students at the six HEIs in the region in 2014/15
32%of Scotland’s total
Top three subjects:
Business & Admin, Biological Sciences and Subjects Allied to Medicine
Note: HE/FE data is available at regional level only. ESES City Deal is a composite of Edinburgh East and Midlothian and Fife data sets. Data relates to enrolments at FE and HE Institutions in the region, not residents unless otherwise stated. Data provided by SFC and HESA

21. Jobs and Skills Changes (1)
Total employment (jobs) is forecast to increase by 0.4% on average each year from 2016 to 2024, an equivalent rate of 0.2% growth is expected for Scotland as a whole. Professional, scientific and technical activities and administrative and support activities are expected to enjoy growth of 6,100 jobs and 5,700 jobs respectively in the region over the period. The wholesale and retail sector is also expected to grow, creating 4,300 jobs. However such gains will be offset by falling employment within the manufacturing sector and public administration and defence. The number of jobs within manufacturing is expected to fall by over 4,000 over the forecast., whilst those in public administration and defence are forecast to fall by over 3,000 jobs.
Forecast Demand for Jobs ( )
Total Employment Growth
Edinburgh & South East Scotland 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

22. Jobs and Skills Changes (2)
Replacement demand will result in over 254,700 openings within Edinburgh & South East Scotland City Region over the forecast. Expansion demand is expected to increase by 18,500 between Together with replacement demand, this will result in 273,200 openings over this period. Openings will be highest in professional and elementary occupations, driven by both expansion and replacement demand. The total requirement for workers in administrative and secretarial and caring, leisure and other service 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

23. Implications for Skills Investment Planning

24. Key Implications (1) Key Labour Market Changes and Dynamics.
Key Labour Market Changes and Dynamics
The strong jobs growth in 2014 in the City Region continued in 2015, although at a much slower pace, as was the case for Scotland as a whole. There were 1,300 new jobs in 2015, equivalent to 0.2%. There are now 13,400 more jobs in the City Region than 2009, a 2% increase overall.
The employment growth in 2015 was not evenly distributed, with all the jobs growth in Edinburgh and the Lothians, and job losses in both Fife and the Borders. There remains the challenge to maintain jobs recovery and growth across the City Region. When there is a slowdown in the Edinburgh economy, this is more pronounced further from the City.
There were also sector shifts in There were strong increases in accommodation & food services (+6,400) which applied across the City Region and in public administration & defense (+3,400), property (+1,000) and the higher value added sectors of information & communications (+900), driven by the City of Edinburgh. At the same time there were job losses in a number of sectors, including retail (-2,200), the important finance & insurance sector (-1,100), business administration & support services (-3,000) and health (-2,600). Tourism and the public sector have gained jobs, financial and business services and retail have fallen back.
Glasgow

25. Key Implications (2) .
Key Labour Market Changes and Dynamics (continued)
There remains the challenge to rebalance more of the City Region economy. Fife and the Borders remain dependent on traditional employment sectors including production and agriculture, although both are in long-term jobs decline. Edinburgh has driven the economic success of the region, however financial services and information & communications, whilst still strongly represented, have fewer jobs than in 2009, with pressure to maintain their competitive advantage.
The business base continues to grow strongly, and at rates above the Scotland average, and this can be a route for growing and broadening value added services. However, overall output growth has lagged behind the Scotland average and remains below pre-recession levels. Output per worker is only above the Scotland average in the City of Edinburgh, indicating the challenge to increase productivity levels across the City Region away from the capital.
The population has grown faster than the Scotland rate over the last 10 years, and is forecast to increase further by 16% by This will continue to highlight disparities in the City Region, with the working age population in the City of Edinburgh set to increase strongly when they will fall in Fife and the Borders. Commuting into Edinburgh for better paid jobs is common and likely to continue.
Glasgow

26. Key Implications (3) Skills demand and supply.
Skills demand and supply
Overall a higher than average proportion of the City Region are employed in professional occupations, again driven by Edinburgh and the Lothians, with the proportion below average in Fife and the Borders. Replacement demand will be high for professional occupations to 2024, and it is important that those across the region are equipped with the skills to access these openings.
Although 27,700 new jobs are forecast – highest for professional, scientific & technical jobs and administration & support services – more than 250,000 replacement openings are expected, highest in professional and elementary occupations, and then care, administration and sales. The challenge across the City Region will be to meet this employer demand.
A slightly lower than average number go into Higher Education from school.
The top MA frameworks by take-up are construction, retail & customer services, health & social care (with sport), hospitality & tourism.
Glasgow

27. Key Implications (4) Recommended Areas of Focus.
Recommended Areas of Focus
Priorities for the Edinburgh and South East Scotland City Region include:
Maintaining and increasing higher level skills supply. There is continuing high demand for professional occupations and higher levels skills will be required to maintain the competitive advantage driven by the City of Edinburgh.
Meeting the needs of employers in key sectors. These include accommodation & food services for hospitality and tourism skills, care, financial services, administration & related for business administration & support. There will still be locally significant need for skilled trades linked to engineering, construction and agriculture.
Increasing the quality of jobs. Although parts of Edinburgh & the Lothians have made the transition to a knowledge-based economy, Fife and the Borders are more typically reliant on traditional employment sectors in long-term jobs decline.
Encourage greater employer investment. Employers continue to need to be encouraged to invest and innovate, which includes investment in skills.
Increase the pool of labour with the chance to participate in the region’s success.
A need for progression routes and pathways. Demand for skills in the region is strongest at the upper levels. Progression needs engendered and supported.
A need for flexible provision. Non traditional employment is increasing Skills provision must be equally flexible, with work-based learning routes part of this.
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 main presentation: Sector Trends and Specialisms