1. Regional Skills Assessments
Borders Region
December 2016 OK
Glasgow

2. Introduction An Introduction to Regional Skills Assessments (RSAs)
Key Data for the Borders 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 (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 (Schools, MAs, HE, FE), 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. The Borders Overview
Industrial base has evolved from agriculture, fishing and textiles into industries such as electronics, engineering, tourism, chemicals and plastics. A world leader in the design and production of high quality knitwear
Largely rural area with some key towns including Galashiels, Melrose and Peebles
Benefits from its location and transport links to Edinburgh and, to a lesser extent, Newcastle. The newly opened Borders Railway has enhanced links to Edinburgh although improved access to a large labour market could lead to recruitment challenges for local employers

9. Business Trends
The rate of growth of the business base in the Borders is positive at 5.2% but significantly below the Scottish rate (7.3%) (2010 – 2015)
250 new businesses in 2015 concentrated in: Professional, scientific and technical and Business, admin and support services
Relatively high business density with 441 enterprises per 10,000 residents
99% of businesses are small or micro (<50 employees). Only 10 employ 250+ people
Much higher rate of self employment (15.5%) compared to Scotland (10.8%)
The number of businesses in Growth Sectors increased slightly from At 49% it is slightly higher than the national figure (46%) (2015)
Much greater proportion of Border’s Growth Sector businesses in Food and Drink than nationally (48% v. 22%)
Finance and business services is significantly below national average (21% v. 35%) as is the Creative Industries sector (12% v. 19%)
31% of total employment is in Growth Sector businesses (compared to 28% nationally)

10. Sector Trends and Specialisms
Limited number of private sectors in high representation and high growth quadrant
Exceptional growth in public administration and defence and very good growth in professional, scientific and technical
Significant job losses in a number of sectors - finance and insurance, information and communication, transport and storage, accommodation and food, health 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

11. Population and Projections
Population of 114,030
Accounts for 2.1% of Scotland’s population (2015)
No measurable increase from 2014 to 2015 whilst national growth was 0.5%
Over the past ten years ( ) the region’s increase of 3% was below the increase 5% nationally
Population change :
Significant growth in the 45+ age group since 2005
Sharp decline in the age group and a decline in the 0-15 age group
Forecast Population change,
A static size of population but significant demographic restructuring
The profile of the population will age steeply
65+ age group projected to increase by 33% and the 75+ by 95%
All other age groups expected to decline
Working age population to fall by -20%
Dependency ratios will therefore increase significantly in Borders

12. Employment and Travel to Work
76% of working age residents are in employment, exceeding Scotland’s employment rate of 73% (2015)
78% of residents work within home LA, whilst 22% travel to work elsewhere.
Key destination for out-commuting is Edinburgh, more than 4,000 Borders residents commuted to here:
Commuters 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

13. Workforce Trends
Total employment in Borders = 42,600 which accounts for 1.7% of Scotland’s employed workforce
3.1% increase( ), the same as the previous year
Slightly short of the 3.2% increase in Scotland as a whole but outpaced 2.7% growth UK wide
41% work in higher level occupations (2015)
Slightly below Scotland average (42%) and a marginal decrease on the previous year
72% work in private sector, compared to 77% nationally
26% of the employed population work part-time with the percentage fluctuating between 24% and 31% over the past ten years
6.7% are in non-permanent employment, above the rate for Scotland
Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.

14. Unemployment and Participation
Unemployment rate is 4% of the working age population and is back in line with the pre-recession unemployment rate.
In the Borders, 91% of year olds are participating which is slightly above the national rate.
The proportion who are not participating is 3% against a Scottish rate of 4%.
The remainder are unconfirmed.
The unemployment rate in the region was below the national average (4% v. 6%), unemployment increased by 1ppts whilst nationally it declined (-0.4ppts) from 2014 to 2015.
Unemployment rate: Unemployed as a percentage of the economically active population
Unemployment measure used = ILO unemployment, i.e. those are available for and actively seeking work

15. Qualifications and Skills
An increasingly highly qualified workforce 2005 – 2015:
Proportion qualified to Level 7+ in the Borders increased by nearly 9ppts between 2005 and 2015
Scotland increased at a higher rate
The overall trend is upwards in the Borders and nationally
At 42%, a slightly lower proportion of working age adults hold SCQF qualifications at levels 7-12 than in Scotland as a whole (43%), although this is a higher proportion than UK wide (37%)

16. Skills Mismatches
47% of employers in the Borders have recruited staff over the past year (2015), compared to 53% nationally
A smaller proportion of employers report a skills gap in the current workforce (10%) than nationally (13%).
4% of the workforce with a skills gap (compared to 5% nationally)
5% report at least one hard-to-fill vacancy accounting for 1.3% of the workforce. Corresponding Scottish figures are 6% and 0.8% of the workforce.
Borders employers less likely to report skills gaps and more likely to report under-utilisation
Skills gaps most prevalent in skilled trades occupations
69% of employers with skills gaps say it impacts on the business, in line with Scotland overall

17. Modern Apprenticeships
Schools
Modern Apprenticeships
Education and Training
The secondary school roll in 2015 was 6,377, 2.3% of Scotland total
94% school leavers had a positive
destination in 2015, compared to 92% across Scotland
Modern Apprenticeship (MA) uptake decreased by 6% from 2014/15
2% of national total in 2015/16
Construction most popular MA framework group
19% of uptake
Heavily gender segregated – 97% male
79% MA achievement rate in 2015/16

18. Further and Higher Education
In 2015/16, at Borders College there were 5,195 enrolments
2% of Scotland’s total
92% FE and 8% HE
Top three subjects:
Full-time: Care, Land-based industries, Hairdressing, beauty & comp therapies
Part-time: Care, Hospitality & tourism
67% successful completion of FE courses
There were 690 students attending the Heriot-Watt Galashiels campus in the region in 2014/15
Top three subjects:
Creative Arts and Design, Business and Administrative Studies, Architecture, Building and Planning
Note: 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 projected to fall more steeply in the Borders than in Scotland to 2037
Between 2012 and 2037, around 14,000 fewer people of working age, reducing the scope to raise GVA through increasing the number of people in work
Compounding the fall in the working age population, the challenge will be to provide the skilled labour employers need as older workers retire and their skills are lost in the labour market
Continuing to improve productivity and retaining skills in the region will be key to maintaining and increasing economic prosperity
The Borders Region is forecast employment decline of -0.4% from 2016 to 2024, whilst nationally growth is forecast (1.0%). This equates to 200 fewer people in employment in the Borders
This is a slower rate of decline compared to 2006 to 2016 (-8.1%)
However, it suggests that the number of people in work will decline 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.

20. Jobs and Skills Changes (1)
Total employment (jobs) is forecast to decline in the short term before posting some moderate growth from Average annual growth over the forecast is largely flat, contracting slightly by 0.02% compared to growth of 0.2% in Scotland. Manufacturing is expected to shed around 600 jobs over the period to Employment within public administration & defence is also expected to fall, with the loss of 300 jobs by Professional, scientific & technical activities, construction and human health and social work are expected to have some job growth, each with an increase of 200 jobs each over from 2016 to 2024.
Forecast Demand for Jobs ( )
Total Employment Growth
Borders 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)
Growth across the occupations is largely flat and limited to caring, leisure and other service occupations (100 people). Process, plant and machine operatives, elementary occupations and skilled trades occupations are all expected to decline by 200 people, 100 people and 100 people respectively, perhaps reflecting the forecast decline in manufacturing at the sectoral level. All other occupational classifications are forecast to be relatively static over the period.
Forecast Changes in Occupational Demand
Borders 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 the Borders over the forecast will require individuals with higher level qualifications, in part a reflection of the sectoral and occupational trends expected over this period. Individuals qualified to SCQF level 7-10 will account for around 57% of the 13,600 openings expected to be created between 2016 and The remaining opportunities available will mainly be for individuals qualified to level 5/6, equivalent to 34% 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 13,600 openings within the Borders region from 2016 to These openings will occur across all occupations including those that are expected to decline in net terms. Expansion demand is expected to fall by 200 between However together with replacement demand, will result in 13,400 openings over this period. Replacement demand will be highest for the elementary and professional occupations, but will be prevalent across a broad range of occupations.
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. Borders region: Key Implications (1).
Recommended Areas of Focus
Increasing the quality of jobs. The Borders remains a relatively low wage, low pay economy, rooted in traditional employment sectors. There has been no real progress in increasing jobs in knowledge-based sectors, such as professional services.
Increasing the number of jobs. Jobs growth has stalled, and there remains a need to increase the number of jobs in the region. Out-commuting to Edinburgh in particular is common, and the region should seek to avoid becoming a dormitory region.
Engender and support more enterprise. A key route to more private sector jobs is to increase the start-up rate and business density. Birth rates have increased, close to the Scotland average, as have business survival rates. Supporting new businesses to start-up and grow – linked to quality of life benefits – may help to create new jobs in the future.
Glasgow

26. Borders 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 sales. These require work-based learning routes into, and upwards, within sectors.
There is a need for higher level skills. There is a real need for the Borders to start the transition to a more knowledge-based economy, and the availability of higher level skills locally needs to be a part of this.
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. Borders region: 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, and work-based learning routes are 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 jobs arising from the Edinburgh and South East Scotland City Deal. 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