Appendix 1
Response from Richard Cohen, Co-ordinator, Economic
Development & Regeneration, Bristol City Council
You asked for a response to the above inquiry questions.
The introductory paragraph causes me some concern
because it regards New Deal as a supply side policy. My understanding
and one of the reasons behind Bristol City Council's commitment
to New Deal was that it is more than a supply driven programme,
otherwise, why are employers involved? To my mind, it is too simplistic
to call New Deal a "supply side" initiative. This smacks
of academic pigeon-holing rather than a useful categorisation.
Bristol has tried to reflect labour market intelligence
and employer demand throughout the development and implementation
of New Deal locally and we will continue to do so. Employers are
part of the managing partnership and we have drawn on a variety
of local research into sectoral and key skills gaps.
I appreciate that the focus of New Deal is on making
jobless people more employable but not without reference to the
job market and skills needs of employers. If New Deal districts
are delivering the New Deals without reference to employer requirements
and labour market intelligence then they are not taking full advantage
of the opportunity.
Regarding the specific areas of investigation by
the inquiry:
1. The extent and causes of any geographical
jobs gap
Bristol is encountering high level skills problems,
hi tech and engineering in particular. 53 per cent of large (200+
jobs) employers (TEC survey 1998) had some internal skills gaps
of whom one-third felt that the problem was hampering growth and
efficiency. IT knowledge is a particular problem. Most local employment
growth is expected in professional, technical and sales occupations.
The Bristol area continues to demand a varied skills
base (often developing or new ones)—new technologies (eg
media related), new working arrangements (eg multi-skilling) and
new production processes (eg "Just in Time") all demand
new skills. In general, growth is in white collar, professional,
higher skills areas and is absent or low in traditional and lower
skilled areas. Exceptions include basic IT and customer care skills
which Bristol area employers have also identified as skills gaps.
Employers in the area perceive skill shortage as
a cause of recruitment difficulties. Whilst the cause may be something
else (eg uncompetitive wage rates, lack of job security), the
perception itself is important to the confidence of the Bristol
business community and potential inward investors.
2. Which groups might be most affected?
Skills gaps appear in rapidly changing skill areas
(eg IT work where new software is issued). IT and automation of
production are driving the need for new and regularly updated
skills. The unemployed or those completely outside the labour
market will fall behind in the acquisition of new skills. This
creates a spiralling difficulty in returning to employment. The
longer a person is jobless the more they lose their existing skills
and the further they fall behind the new skills needed in the
job market.
Traditional occupations now demand new skills (eg
motor mechanics must now operate computerised stock control systems)
and some workers may find it difficult to adapt to new systems
and demands. Multi-skilling is facing many workers with a problem
because being skilled in one job may no longer be enough.
The main groups affected by skills gaps in the Bristol
area and wider South West region are;
— The unemployed; especially long term
and those with low or no skills;
— Employees of declining traditional occupations;
— New entrants to the job market who are not highly skilled
are facing problems because of the reduction in entry level jobs
across all sectors. Lower skilled jobs in clerical, administrative,
construction and manufacturing are disappearing due to increased
computerisation and new technologies.
— Workers with responsibilities or circumstances that affect
their mobility in the job market, either geographically or occupationally
(care/family commitments are often the deciding factor);
— Older workers who are not experienced or adapted to regular
skills upgrading and new task activity.
On the employer side, those most affected in Bristol's
locality are the hi-tech companies competing for a limited supply
of staff. This leads to wage inflation and unpredictable flows
of staff. In the main Bristol companies are filling their vacancies
or coping with gaps. 73 per cent of companies have no significant
skills gaps to report.
3. How successful are official measures at
presenting spatial disparity
My experience is that they are not especially helpful
at presenting the local situation. (Probably understandable since
local economic bases can differ wildly) In Bristol a combination
of information from the two universities, WESTEC, Bristol City
Council, Employment Service and others provides a local analysis.
NOMIS, Labour Force Survey, International Labour Organisation
and nationally consistent information offer useful comparators.
4. The impact of jobs gaps on the effectiveness
of supply side policies
New Deal in the main supplies the lower skilled end
of the job market. In Bristol 50 per cent of 25+ New Deal participants
have no recognised qualification at all. The jobs gaps for this
clientele is the shrinking number of low and semi-skilled occupations.
Notable exceptions are the distributive and construction
sectors which are buoyant and continue to offer some unskilled
and semi-skilled occupations.
The New Deal is showing some lack of flexibility
to respond to labour market demands and participants' needs. 18-24
year old participants who are not job ready have the choice of
a year's education/training or six months placement in the ETF
or
voluntary option. 25+ New Deal offers some training
but no variety of options. The various programmes cannot be easily
mixed and their duration is fixed. For a client group that experiences
a lack of skills and a variety of multiple barriers there is a
need for customised support into the labour market and greater
flexibility within and between providers. If the skill level of
jobs in rising overall then supply side provision will need to
adapt to meet new market demands. This will require extended training
programmes, more innovative combinations of training and work,
and more resources with which to deliver these changes.
Colleges in particular can be inflexible in the face
of changing labour markets, new gaps in the job market and client
centred training arrangements. TECs have labour market research
expertise and, in theory, are better at responding to labour market
change, employer requirements, jobs and skills gaps. Modern Apprenticeships,
Training for Work etc are TEC supply side programmes that provide
"stock". I suspect that the degree to which the training
community reflects the job market (present and future) varies
dramatically:
Some questions that need answers in this arena are:
What is the role of the Training Standards Council?
Does the agency have a remit to look at training in terms of its
relevance to the labour market or does it assess the quality of
training delivery in a vacuum?;
How will the Post-16 White Paper affect the relationship
between training and jobs gaps? Will the Learning and Skills Councils
have a responsibility to look at training in its local labour
market context?;
What role do RDAs have in linking training to local
economy and local employer demands?
5. The extent of initiatives aimed at creating
a better balance between local supply and demand for jobs
Main Government programmes tend toward the supply
side, increasing employability but not necessarily focusing closely
on employer needs and labour market change. This is not surprising
since national programmes are unlikely to be able to reflect all
local differences. TECs and Employment Service have limited opportunity
to adapt main programmes toward local circumstances because their
core activity is dictated from the centre. There are exceptions
such as New Deal which has some local flexibility but only is
not available to the majority of registered jobless. TECs can
vary their contracts to reflect the changing labour supply needs
of different sectors and can use their reserves to fund innovative
programmes but the end result is usually a concentration on traditional
training for traditional employment sectors (hotel and catering,
retail, IT, etc).
Education services could make much stronger links
for school students with the world of work but tend not to. Bristol
area findings are that students are not satisfied with their work
experience placements and employers are not satisfied with the
level or appropriateness of skills that school leavers have, especially
in key skills.
Funding to balance labour supply and demand usually
comes from sources that can be used locally in an innovative way.
European Social Fund is a main provider of funding to try out
new labour market initiatives. The opportunity to use wage subsidies
and fund training customised to jobs is attractive to employers.
In the past central government recognised the need for focused
attention on failing local labour markets: Inner City Task Forces,
City Action Teams and City Challenge were all tasked with meeting
the needs of employers and employees alike. This administration
has introduced a range of initiatives on the supply side but we
are still short of the flexibility that allows for local employer
demand led initiatives. New Deal for Communities and SRB can include
a balanced approach but, because of their leaning towards communities
of need, tend to focus on individual rather than business need.
There is a case to be made that Government should
push for greater demand led interventions in the labour market
and greater practical involvement of employers. Will the Learning
and Skills Councils and Small Business Service have such a responsibility?
Will future funding for colleges and other training providers
require responsiveness to the market? Will RDAs take an active
role in dealing with skills and jobs gaps at a regional level?
6. Examples of good practice
From my knowledge I would suggest the following;
— Bristol's local employment in construction
initiative, "On Site", which is a partnership of City
Council, ES, TEC and others to supply the local construction industry
with trained workers and local suppliers. The project has re-introduced
apprenticeships in partnership with local building firms and offers
a register of construction workers that firms can recruit from.
The project also advises local agencies and training providers
on the present and future skills needs of the industry;
— Combined construction and end use recruitment programmes
tied to major developments. The Bluewater retail park in Kent
was established by developers with very clear and effective ideas
about meeting the employment needs of building companies and retail
end users. It is regarded as a recent exemplar;
— A variety of past initiatives under the "customised
training" heading. These have involved the identification
of vacancies from employers as a precursor to setting up a training
course and work experience in cooperation with the employer. Anyone
who finishes the course satisfactorily is guaranteed a job interview.
To my knowledge, customised training has been used with a wide
variety of employers including the Bank of England, Our Price
Records, Marks and Spencer, London Fire Brigade and the Employment
Service;
— Training and recruitment tied into the services of inward
investment. Traditionally, local authorities and others have offered
information on sites, premises, grants etc to companies seeking
to expand or move into an area. Increasingly companies are considering
local labour markets, supply and skill levels when making relocation
decisions. Bristol City Council has on occasion pulled together
training and employment partners to meet with prospective new
companies as part of a package of services. We are in the process
of formalising this approach so that skills and labour supply
are a core service on offer.
If you want further information I can try to track
it down.
With the caveat that I have some uncertainty about
what the inquiry is trying to do and what is meant by "jobs
gaps", I hope that you find the above useful. If the inquiry
wants an "in a nutshell" response then the message is
that New Deal and other programmes must allow for local flexibility
to address local labour market trends.
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