Improving Skills for Employment

There is an inarguable connection between skills and employment opportunities, both for the individual and for the wider workforce. Enhancing skills significantly improves the ability of the unemployed to find work. At the same time enhancing skills helps those in lower paid jobs to progress within the labour market. As the skills base of the local workforce increases, the area becomes more attractive to prospective investors looking to bring in new business.

A fast pace of change in the national and world economy coupled with rapidly evolving technology means that the modern workforce needs to be more skilled than ever before. These skills need to be flexible, adaptable and portable between jobs and even between employment sectors. The continuing shift from a production to a service based economy also means the workforce is increasingly having to develop its social skills, as employment becomes much more customer focussed.

The claimant count as a percentage of the working age population is the headline indicator for unemployment.[1] The impact of the Covid-19 pandemic has meant that in the spring of 2021, we had a claimant rate above 6% in Conwy and at 5.9% Denbighshire. These levels had not been seen since the 1990s. In August 2021, the claimant rate fell to 4.9% in Conwy and 5.1% in Denbighshire. Four areas in Wales (Newport, Blaenau Gwent, Cardiff and Merthyr Tydfil) had higher claimant rates.

ONS Claimant count by sex and age as a proportion of residents aged 16-64 (Source: Nomis)

	May-21	Aug-21
Blaenau Gwent	6.3	5.7
Bridgend	5	4.3
Caerphilly	5.6	4.9
Cardiff	6.2	5.3
Carmarthenshire	4.8	4.2
Ceredigion	4	3.3
Conwy	6.1	4.9
Denbighshire	5.9	5.1
Flintshire	4.8	4.1
GB	6	5.3
Gwynedd	4.6	3.7
Isle of Anglesey	5.6	4.7
Merthyr Tydfil	5.9	5.3
Monmouthshire	3.7	3.1
Neath Port Talbot	5.2	4.5
Newport	7.3	6.5
Pembrokeshire	5.1	4.3
Powys	4	3.3
Rhondda Cynon Taff	5.5	4.7
Swansea	5.4	4.7
Torfaen	5.7	5.1
Vale of Glamorgan	4.9	4.1
Wales	5.4	4.6
Wrexham	5.5	4.7

We also continue to see substantial inequality between areas with the most deprived areas of each county having double digit claimant count rates in key neighbourhoods; with a rate of 19% seen in the most deprived area of West Rhyl.

Inequality

There are equality issues associated with poverty. Welsh Government research indicates the following:

Lone parents had the highest rate of transient poverty and persistent poverty
Single pensioners also had high levels of persistent poverty (similar to the level for lone parents).
Families with two adults were less likely to experience poverty than their single-adult equivalents.
Families with children were more likely to have experienced poverty than the equivalent family type (single or couple) without children.

However, it is important to note that these calculations were based on income before housing costs (BHC) and that this has a significant impact on the numbers of pensioners judged to be in poverty. If the after housing cost (AHC) measure were used far fewer pensioners would be classed as in poverty because pensioners (on average) have much lower housing costs than other types of families.

There are other characteristics to consider beyond the family structure types examined in the Welsh Government study. Differences in the prevalence of particular working patterns within different protected groups also need to be considered. The list below is by no means exhaustive, but illustrative examples include:

Disabled people are more likely than non-disabled people to be workless and therefore more likely to experience poverty.
Women are more likely than men to live in single-parent households, to have low incomes, and to have only part-time work and are therefore more likely to experience poverty.
Pakistani and Bangladeshi women are also more likely, than other women, to be workless and therefore more likely to experience poverty.

A period of ill health, or a worsening condition can cause huge difficulties. For those in work, but who are just managing, it can lead to losing employment and then struggling to get back into work. Unable to support themselves and their family, and without the positive psychological and social support that comes from being in work, their wellbeing can decline and their health can worsen.

The gap between the employment rate for those with a long term health condition and the overall age specific employment rate in persons aged 16-64 is 15.3 in Conwy and 14.9 in Denbighshire. Wrexham has the highest rate in North Wales at 17.2. Both Conwy & Denbighshire are higher than the Wales average of 14.1.

Skills, employability support and training

The headline indicator for skill levels in the working age population comes from the ONS annual population survey. These show that the two counties share the characteristics of having smaller proportions of people with the higher levels of qualification, and larger proportions of people without qualifications, than is the case in the Wales or Great Britain figures.

	Conwy	Denbighshire	Wales	Great Britain
	percent	percent	percent	percent
% with NVQ4+ – aged 16-64	35.9	36.5	38.8	43.1
% with NVQ3+ – aged 16-64	55.7	55.3	58.5	61.4
% with NVQ2+ – aged 16-64	74.8	73.3	76.5	78.2
% with NVQ1+ – aged 16-64	84.3	86.6	86.7	87.9
% with other qualifications (NVQ) – aged 16-64	7.3	5.8	5.7	5.7
% with no qualifications (NVQ) – aged 16-64	8.4	7.5	7.6	6.4

Source: Annual Population Survey ONS Crown Copyright Reserved [from Nomis on 17 June 2021]

Included within the suite of skills for employment are a whole range of academic and work related qualifications. The route to higher education and a university degree are not suitable for all school leavers or adult learners, and apprenticeships and other work based learning opportunities form a large part of the local skills base. As well as educated graduates a resilient mixed economy will require skilled technicians, administrators, retail operatives and so on. On-the-job learning, apprenticeship schemes and formal higher education all have significant roles to play in providing skills within the employment market.

Denbighshire has the third highest youth unemployment rate of all Welsh Local Authorities, a rate which is significantly above the Wales and Great Britain levels (10.1% as at July 2021). Conwy’s rate stood at 9.1% in the same period.[2] West Rhyl is the ward most affected and accounts for a 5^th of the Denbighshire total. Although some recovery has begun, these levels of youth unemployment are at the same level of severity experienced in the aftermath of the credit crunch and subsequent down-turn (all age unemployment rates are actually worse than experienced in the credit crunch and are at levels not seen since the early 1990s).

Research currently underway by Working Denbighshire indicates that as for other age groups, disabled young people are more likely to be unemployed than non-disabled people.[3]

There is clearly a significant issue with youth unemployment in the county and as expected particularly high-levels in the more deprived areas (and there is an association with homelessness). We are at a point of transition in terms of the funding for services to support this cohort and unemployed people of all ages.

At a national level, we know that overall, the proportion of 16 to 18 year olds who are not in education, employment or training (NEET) had been gradually decreasing between 2011 and 2017, but increased slightly in the last two years. At the end of 2019, 15.7% of 19 to 24 year olds were NEET (37,400) a decrease compared with 16.0% (38,500) in 2018. After the start of the 2008 recession the proportion of 19 to 24 who were NEET saw a large increase from 17.4% in 2008 to around 22% to 23% from 2009 to 2012, decreasing in each subsequent year up to 2017. The decrease was driven by increased labour market activity, with participation in education and training remaining fairly stable.[4]

Employability support and training for skills is a complex area of policy in which many organisations are active. The traditional roles fulfilled by different agencies has been disrupted recently by BREXIT and the Covid-19 pandemic.

The Department for Work and Pensions (DWP)

In the past decade, the focus of Job Centre staff has been on the administration of unemployment benefits and the monitoring of people’s own attempts to seek work. A key task has been the rollout of Universal Credit and the use of benefits sanctions that have led some people who previously were economically inactive now having a requirement to seek work. More in-depth support for the unemployed came from the Work and Health Programme and DWP’s participation as a partner in Welsh Government’s European-funded Communities for Work scheme.

Recently, DWP has introduced the Kick Start and JETS projects as part of their covid-19 response and also the 5 year RESTART programme that will give Universal Credit claimants who have been out of work for at least 12 months, enhanced support to find jobs in their local area.

Welsh Government

The Communities for Work project is a European funded project co-ordinated by Welsh Government and delivered in partnership by local authorities and Job Centre Plus in areas of high deprivation. Its focus is on economically inactive people and the long-term unemployed and it will come to a close in the summer of 2022. The sister project Communities for Work Plus is funded by Welsh Government on a rolling annual basis. It does not have geographical or length of unemployment-based restrictions and was significantly extended during the Covid-19 pandemic to cope with rising demand.

Welsh Government also fund Working Wales (part of Careers Wales) to play a co-ordaining and triaging role as well as traditional careers service functions.

Regional

The key interface between employability support providers, colleges, training providers and the strategic regional economic objectives takes place in the Regional Skills board. Some recently closed European-funded projects including the ADTRAC project (to support not-in-education-employment-or-training (NEET) young people in to work or training) have had a regional focus and it is clear from their policy documents that Welsh Government intended the UK based replacement funds to have a regional dimension. Labour market intelligence, our understanding of growth sectors and demand; the co-ordination of key collage programmes and Personal Learning Accounts have also been co-ordinated at this level. However, UK Government announcements regarding the UK Community Renewal Fund, Levelling Up and forthcoming Shared Prosperity fund suggest that key decisions will be made at local and UK levels rather than Regional or Wales levels in the future.

Local

Working Conwy and Working Denbighshire teams co-ordinate each local authority’s delivery and engagement with partners in relation to the many projects and schemes mentioned above. In addition, local initiatives include apprenticeships, paid and unpaid work placements (including through the WorkStart and Kick Start schemes), training bursary for those in employment and seeking to progress their careers.

Third Sector

Third Sector organisations are significant deliverers of employability support and skills training in their own right as well as key partners in some of the other schemes listed above. Notable examples include the European funded Active inclusion Projects run by Conwy Voluntary Services Council, Denbighshire Voluntary Services Council, Citizens Advice and other agencies in the two counties. The Rhyl City Strategy and Betsi Cadwaladr University Health Board collaborative ICAN project, Cyfle Cymru’s employability support for those with substance misuse issues to name a few.

[1] This paper sets out our reasoning for using the claimant count as a measure of unemployment: https://gov.wales/sites/default/files/statistics-and-research/2019-01/differences-between-unemployment-and-the-claimant-count.pdf

[2] Claimant count by age – not seasonally adjusted (June 2021)- ONS Crown Copyright Reserved [from Nomis on 16 July 2021]

[3] Denbighshire County Council (2021). Working Denbighshire Strategic Review: TOWARDS A SUSTANABLE DELIVERY PLAN. Unpublished.

[4] https://gov.wales/young-people-not-education-employment-or-training-neet-april-2019-march-2020-html

The current claimant count levels have not been seen since the 1990s. In its best periods from 2001 to the middle of 2008 and between 2014 and 2019, the rate has been lower than 3% in both counties and just under 2% in outstanding years.

In common with other parts of Wales and the UK, the skills levels of the working age population in the two counties has been steadily improving in recent years. This can be seen in the rising trend in people with the highest levels of qualification and the falling trend for those with no qualifications. The most recent data suggest this progress may have stalled during the years affected by the Covid-19 pandemic and there may be a plausible reason for this in the disruption to training courses caused by the lockdown and reduction in economic activity. However, the margin for error is relatively large for these measures and it is probably too soon to say whether or not the previous positive trends have ceased.

In recent history there have been three key shocks to the economy followed by protracted recovery periods. The impact on the claimant rate was as follows:

From 1992, the recovery period stretched around five and half years with the rate not falling to 3% until the summer of 1998.
From the credit crunch in late 2008, it took a similar period to May 2014 before the rate was below 3% once again.
In 2020, the rate rose very rapidly as the Covid-19 pandemic struck – although it is worth noting that it had already been on the rise and stood above 3% in both counties in January 2020. The speed of the impact of Covid-19 may suggest that an equally swift recovery may be possible, but the fact that we were already seeing a rising rate suggests more fundamental issues, including BREXIT, may also be having an impact.

The Bank of England’s February Monetary Policy Report suggest the unemployment rate will remain above the levels seen in 2019 at least into 2024. It seems reasonable to expect that the employment rate will continue as a matter of concern through a good proportion of the forthcoming plan period. A traditional recovery rate would suggest it being a concern throughout the whole of the next planning period (five years).

There is significant uncertainty about future funding for employability support and skills training. We know that the DWP’s Kick Start scheme is due to end in December 2021 and that all European funded projects will end before March 2023. Likewise, the new planning cycle locally means that local funds are also uncertain.

We do know that the DWP’s RESTART scheme is planned to run to 2026 and expect key announcements regarding the UK Shared Prosperity Fund and Welsh Government’s community based employability funding during the autumn of 2021.

For the public sector, as well as contributing to the apprenticeship levy they will also be required to meet the legislative requirements contained within the Enterprise Bill. This legislation will stipulate that all public sector organisations will be required to make sure that 2.3% of their workforce are apprentices at any one time. This will potentially be a significant change to the way public sector organisations recruit and train staff.

In a world of home working and increasingly virtual recruitment and working, some people will need support with digital access, skills and confidence.

The workforce (both men and women) will need to be able to pivot / transition into new roles as technology continues to develop and new jobs are created. Skills will be required to do this. There are more barriers to upskilling for women who “have less time to reskill or search for employment because they spend much more time than men on unpaid care work; are less mobile due to physical safety, infrastructure, and legal challenges; and have lower access to digital technology and participation in STEM fields than men.”[1]

The UK Commission for Employment and Skills produced a series of insight reports in 2015 which highlight the challenges facing key employment sectors[2]

Health and social care

Increased demand for care, growing patient/service user expectations, improvements in treatments and technologies and the political and social push for resource efficiency means the health and social care sector is expected to be much more flexible than in the past. This can be seen, for example, in physiotherapists’ growing role in delivering reablement support in community settings, and nursing auxiliaries’ increasing specialisation and growth from providing primarily a support function to increasingly taking on additional clinical duties. There are also recruitment concerns for the future. The current workforce is predominantly female, has an older age profile, and is more highly qualified than the economy as a whole.

Retail sector

New technology requires workers to have up-to-date IT skills, which can be a challenge for older workers who are less likely to have good IT skills than younger workers. Predictions in 2015 suggested that by 2022 holding qualifications at this level will be a pre-requisite for 34% of wholesale and retail jobs and half of jobs across all industries. In order to meet the predicted skills demand retailers will need to upskill existing workers and attract appropriately skilled new entrants.

Energy sector

Evolving energy policy, the emergence of new technologies and the transition to a low carbon economy are prompting radical changes in energy consumption, management and storage. The skills mix required by sector employers is expected to evolve in the future, to include soft skills, technical skills such as data analytics, as well as knowledge of new technologies as they emerge. This is a high skill sector with a limited supply of skilled and experienced workers due to strong competition for skills between sub-sectors, other sectors and countries; uptake of the most sector-relevant STEM qualifications not meeting employer demand; poor visibility of (and consequently interest in) the energy sector as a career prospect among young people and potential new entrants from other industries.

Thinking about Conwy County Borough and Denbighshire, responding to growth in the energy sector, in particular in response to the new nuclear power facility on Anglesey is of specific interest to the area at the moment. Skills in the area need to be up to the challenge of the construction, running and maintenance of the new power station. This is not just about specialist engineering skills, but manufacturing and construction benefits as well. The demand will be high for competent and experienced staff and we need to make sure that the local workforce is prepared for that demand so that the economic benefits are realized locally.

Investment through enterprise zones in neighbouring authorities mean that both counties should prepare for growth in the energy sector, in particular in response to the new nuclear power facility, and a further growth in advance manufacturing in the Deeside Area. Likely requirements will include specialist engineering skills, and new jobs in manufacturing and construction.

Digital and creative sectors

The greatest recruitment challenges are currently experienced by those seeking workers with digital skills. Graduate recruitment is an important source of workers for the sector, but there are concerns that many graduates leave university without up-to-date technical skills, or the softer skills required to be effective in the workplace. Rapid technological advances are leading to skills gaps amongst the existing workforce. At the same time, employers encounter fewer difficulties recruiting to some more creative roles which are extremely attractive to potential employees. However, it would be wrong to draw a simple distinction between the digital and creative sub-sectors. The boundaries between digital and creative are becoming increasingly blurred and employers increasingly seek a fusion of creative and technical skills, combined with business and softer skills. Significant technological trends will include: strong growth in demand for technology from across the economy; the growing importance of cyber security; the convergence of content across platforms; mobile and cloud computing; big data and analytics; the automation of routine tasks; new applications of social media; and new business models and collaborative platforms. The future development of the sector could also be influenced by regulatory changes.

Advanced manufacturing

Broadly described as manufacturing that is intensive in its use of capital and knowledge and requires a high level of technology utilisation and Research and Development. Although manufacturing employment as a whole is expected to decline up to 2022, recent forecasts have predicted that advanced manufacturing is expected to grow significantly in the coming years. The role of production managers is expected to see an increasing workload, and will require enhanced business skills as well as keeping pace with production technologies. An increase in the role within the industry of biochemists and biological scientists is anticipated. Production is expected to become more complex and require higher skill levels across the board. Software skills will be required to maintain machinery. Assembly line roles are expected to decrease in number but increase the skills levels – particularly in IT – that are needed by operatives.

[1] Natural Resources Wales (2021). Future of Work in Wales Horizon Scanning approach. Unpublished document. Accessed 2 August 2021.

[2] https://www.gov.uk/government/collections/ukces-sector-insights-reports-2015

People have told us they would like to see:

Education, training and employability support for people of all economic activity levels
Education, training and employment for young people
Sustainable employment; not just seasonal work
Different types of private employers attracted to the area to increase jobs and support the economy
Recruitment issues in certain undesirable sectors tackled e.g. social care and hospitality

There is still a gap between skills and the needs of the local economy despite a huge effort from different sectors. We need more analysis on the on the implications for the public sector in developing skills, in particular in relation to areas of deprivation, the rural economy and efforts to develop skills to boost self-employment. We also need more analysis about the extent to which jobs are fair and decent (in terms of pay and conditions) and how prepared we are to upskill for higher paid jobs. Using information available on Nomis could support us with this. We also need to know about the trajectory in terms of young people’s employment, and for disabled people generally. Homelessness could be an issue linked to unemployment.

Based on the likely change in shopping habits, businesses, especially in the retail sector, may require more development opportunities in relation to technology and on-line presence. This also applies to the tourism sector.

We also need more analysis on green recovery and to what extent we feel we are supporting the low carbon economy with the different skillsets it needs now, and in the future.