1. SECTOR PROSPECT STUDY - MANUFACTURING Steven Cochrane Head of Strategy – PLACE Pennine Lancashire Leaders Joint Committee – 13 th July 2011

2. Context 1 st in a series of sector prospect studies; To give the ESB the evidence base and intelligence to fulfil its role effectively: “To bring together the supply and demand sides of the Pennine Lancashire labour market; ensuring the employability and skills levels of local people match employer needs”. “To lead on the planning, funding and commissioning of employment and skills provision in Pennine Lancashire”. Advanced Manufacturing: “Industries and businesses which use a high level of design or scientific skills to produce innovative and technologically complex products and processes”.

3. Pennine Lancashire Sectors PUBLIC SECTOR 28% MANUFACTURING 24% AEROSPACE 24% EMPLOYEES RETAIL 11% ACCOMODATION & FOOD SERVICES 6% CONSTRUCTION 4% WHOLESALE 4% PROFESSIONAL, SCIENTIFIC & TECHNICAL 4% BUSINESS ADMIN & SUPPORT 4% ARTS, ENTERTAINMENT & RECREATION 5% EDUC 9% HEALTH 14% ADMIN & DEFENCE 4%

4. PL district breakdown Pennine Lancashire retains a large degree of manufacturing industry (24%) in comparison to the regional (11%) and national average (9%). Pennine Lancs breakdown: –Ribble valley 40% - 11,700 –Pendle 31% - 9,000 –Rossendale 23% - 4,500 –Hyndburn 19% - 5,000 –Burnley 19% - 5,800 –BwD 18% - 11,000

5. 69.5%21% 7.5% 2.0% 1-10 employees 11-49 employees 50-199 employees 200 or more employees SME Manufacturing are adaptive, nimble and dynamic Over 1,780 manufacturing plants across PL

6. Manufacturing – Economic Impact Average manufacturing job in Pennine Lancashire = £36,500 Aerospace – GVA per employee BAE = £86,000 Rolls Royce £96,000

7. VARIETY OF ROLES NEEDED

8. Sub Sector - Aerospace Strong Aerospace cluster. The sub sector represents 24% of the total manufacturing workforce. PL accounts for 13% of England's and 56% of the North West’s total employment. Primes – BAE Systems and Rolls Royce; NW Aerospace Alliance. 10 year+ aerospace contracts including BAE JointFighter aircraft till 2035.

9. Pennine Aerospace Jobs Trend

10. Other Sub-Sectors Chemicals 2,600 employees/60 sites –Eka (Akzo Nobel) Chemicals, William Blythe, Baxenden Chemicals, Victrex & Blackburn Chemicals Fabricated Metals 4,500 employees/390 sites –Presspart, Saco, PDS Engineering Machinery and Equipment 2,100 employees/177 sites –Cobble, Fort Vale Computer Electronic & Optical Products 1,500 employees –Invotec, Crown Eyeglass, Promethean, Protec Fire detection, Raven, AMS Neve Motor Vehicles and Trailers 1,400 employees/40 sites –Optare, Merc, Setco, TRW Rubber 4,200 employees/118 sites –Lucite, RPC, RPC, Precision Polymar and Weltonhurst, Flexipol, Ultraframe, Veka and Wardles.

11. Skills, Education & Employment Advanced manufacturing requires a sophisticated skills base; Growth is heavily dependent on STEM; Home office changes to migration may affect ability of sector to access skilled labour; Employment opportunities: JC+ advertised vacancies 7% of all jobs within manufacturing in PL compared to 2% regionally and 3% nationally.

12. KS2 – Age 7-11

13. KS3 – Age 11-14

14. GCSE Attainment

15. Apprenticeships In 2009/10 – 4% Level 2 Apprentices; 9% Level 3 Apprentices in SEMTA. Does not meet the future need of the sector; Potential increase in future take-up – University tuition fee increases; Govt to expand adult apprenticeships places by up to 75,000 by 2014/15.

16. Prospects? Impact from CSR - welfare cuts & VAT reduce consumer spending affecting lower end manufacturing. Cuts in Strategic Defence Review Manufacturing ‘back in fashion’ with Govt Positives - Budget 2011 to assist UK’s Manufacturing sector - funding help for companies through the UK-wide Green Investment Bank and the protection of the Science budget.

17. Prospects? University Technical College Blackburn College STEM Burnley UCLAN Technology and Innovation Centres [TIC] Enterprise zones RGF Apprenticeships Business Growth Fund - SME

18. Prospects? UK Exports Market Top 20 plus BRIC Growing appetite for Western products Big opportunities for PL manufacturers Source ONS £million

19. Strengths Established manufacturing base; Aerospace cluster; NW Aerospace Alliance; 10year+ aerospace contracts including BAE Jointfighter aircraft till 2035 Weaknesses Economic outlook and dependency on Government spending Low Skills base / educational attainment Future skills and training Poor housing offer Weak Transport links Opportunities Globalisation into new market Currency fluctuations Adaptable manufacturing SME Low carbon economy Apprenticeships International controlled migration Forming alliances and partnerships across sub regions University Technical College Blackburn College STEM Centre / Bly UCLAN Threats Globalisation and innovation from other countries; Remanufacturing from the emerging economies Cuts to Research and Innovation Overseas company relocations to get closer to new markets Business relocations due to controlled migration

20. Next Steps… Continued dialogue with manufacturers and industry experts; ESB –Apprenticeships (clear targets) –Improved IAG –Simplify current ‘cocktail of funding’ –Explore potential for more ATA/GTAs Regenerate/LAs –Modern premises/suitable sites –RGF bid submitted “PL200” –Innovation/Business support/Access to finance –Education Raise PL’s manufacturing profile nationally Next study - construction sector