Memorandum from the East Midlands Development
Agency (emda) (EM3-01)
The East Midlands Development Agency (emda)
welcomes the opportunity to contribute to this Inquiry. This submission
aims to provide the policy context for the recent changes to the
skills agenda as well as outlining emda's new responsibilities.
emda has a lead role in developing the
Regional Skills Strategy with the first edition required by summer
2010.
emda is responsible, alongside partners,
to develop a Regional Skills Implementation Plan, this will detail
how partners in the region will deliver the skills strategy.
emda has a key role to champion and advocate
skills development for employers and individuals in the region.
Although RDAs do not formally take on these new
responsibilities until April 2010, BIS has requested that RDAs
produce Regional Priorities Statements for the academic year 2010-11.
These have now been submitted to BIS.
This skills strategy will form a core and integrated
element of the new integrated Regional Strategy.
These new arrangements provide a significant
opportunity to streamline strategy setting, ensuring that skills
are embedded in economic development more widely and enabling
all partners and stakeholders to contribute through a single process.
1) BACKGROUND—POLICY
CONTEXT
1.1 The 2007 Machinery of Government announcements
have resulted in significant changes to the skills infrastructure.
From April 2010 two agencies will replace the Learning and Skills
Council. The Skills Funding Agency (SFA) will be responsible for
the funding adult skills provision and will manage the overall
relationship with FE colleges and providers. The Young People's
Learning Agency (YPLA) will be responsible for funding 16-19 education
and training.
1.2 The National Skills Strategy, Skills
for Growth, was published on 11 November 2009 and supports
the delivery of the New Industry, New Jobs agenda. It sets
out the Government's vision for ensuring that people and businesses
have the skills they need to drive economic growth. Skills
for Growth puts skills at the heart of economic development
and gives RDAs, working with partners, important new strategic
responsibilities. This is to ensure that the skills system enables
businesses to grow and drive up global competitiveness and for
individuals to maintain their employability.
1.3 Skills for Growth confirmed the
requirement for RDAs to produce Regional Skills Strategies. These
will set out employer demand and closely align skills priorities
with economic development. The Regional Skills Strategies will
sit within the framework of the forthcoming integrated Regional
Strategies and be subject to joint sign off by RDAs and Local
Authority Leaders. It will also require ministerial sign off.
The National Framework for Regional and Local Economic Development,
Partnerships for Growth, confirmed that Regional Skills
Strategies will need to articulate all skills needs in a region,
encompassing pre-19, adult skills and Higher Education.
1.4 The Higher Education Framework set out
the Government's vision to sustain the success of Universities
in more challenging and competitive times. The framework emphasised
the need to broaden the range of delivery models to draw more
of the existing workforce into HE and highlights the role of universities
in economic recovery and future growth. It positions the RDAs
as a key channel for aggregating and articulating demand from
businesses, and helping universities respond to key priority NINJ
sectors.
2) EMDA'S
NEW SKILLS
RESPONSIBILITIES
2.1 As a result of the Skills for Growth
White Paper emda will take on the following four additional
responsibilities:
— Regional Skills Strategy. This will form
a core and integrated element of the Regional Strategy and be
subject to joint sign off by emda and the Local Authority
Leaders' Board. In this region this is the East Midlands Leaders'
Board. The Regional Skills Strategy will articulate the needs
of the economy, businesses and individuals and be based on evidence
of demand and intelligence gathered at the regional, sub-regional
and local level;
— Regional Skills Implementation Plan.
This will provide the detail of how partners in the region will
deliver the skills priorities identified in the Regional Skills
Strategy and how these actions will be measured. It will underpin
the new Regional Strategy;
— Regional Priorities Statement. The evidence
and underpinning analysis in the Regional Skills Strategy will
be used by emda to develop, with partners, a Regional Statement
of Priorities, set within a three year time frame and refreshed
annually. It will have ministerial sign off and will be binding
on the SFA and influence the contracting dialogues the SFA has
with FE providers regarding adult skills provision; and
— Skills Advocacy. Acting as champion and
advocate for skills for employers and individuals in the region.
This will include encouraging employer investment in skills and
raising demand for skills.
2.2 The Government has stated that Regional
Skills Strategies will:
— Have a 20 year time horizon, updated
every five years in line with the integrated Regional Strategy;
— Support the delivery of national priorities
for skills;
— Take account of skills priorities identified
on the basis of industry sectors, where they are relevant to the
region;
— Articulate all skills needs of the region;
— Articulate employer demand and set out
specific skills investment priorities for the region; and
— Inform the Regional Priorities Statements
which will be binding on the SFA.
2.3 RDAs do not formally take on these new
responsibilities until April 2010, but BIS has requested that
RDAs produce Regional Priorities Statements for the academic year
2010-11. These have now been submitted to BIS. emda has
used the updated RES Evidence Base to develop the Regional Priorities
Statement for 2010-11. emda is meeting with shadow SFA
staff in the region to ensure that current SFA contracting dialogues
with their providers include how they will support the delivery
of the regional priorities.
2.4 Although the Regional Priorities Statement
will be used by the SFA to shape adult skills provision the statements
in January 2010 are equally relevant to the whole of the skills
system. A copy of the East Midlands Regional Priorities Statement
can be found in Annex One.
2.5 The Government is positioning the RDAs
as holding the remit for improving the economic well-being of
the region. This extends into informing Local Authorities and
learning providers about skills which will be required for the
region in the longer term. LAs are required to plan for and address
these longer term skills needs. The Government has recommended
that RDAs co-chair the RPGs in order to ensure that 16-19 commissioning
plans align with longer term regional skills and economic development
priorities. emda's role is to ensure that when the RPG
develops their Regional Statement of Priorities, it is reflected
in, and supports, the Regional Skills Strategy and informs local
and sub-regional commissioning of 16-19 education and training
provision.
2.6 These new arrangements provide a significant
opportunity to streamline strategy setting, ensuring that skills
are embedded in economic development more widely and enabling
all partners and stakeholders to contribute through a single process.
The new skills system demands shared ambitions and effective partnerships
at regional and local levels to meet the challenges ahead.
2.7 The Government expects all regions to
have produced a Regional Skills Strategy by the Summer. Clearly
its production will be ahead of the timetable for the integrated
Regional Strategy. In the East Midlands an interim Regional Skills
Strategy will be produced, which will be refreshed, updated and
integrated within the forthcoming integrated Regional Strategy.
2.8 Over the next few months emda will
be working in partnership with the East Midlands' Leaders' Board,
sub-regional bodies and other partners such as the SFA, YPLA,
JobCentre Plus, Sector Skills Councils, Business representative
bodies, FE providers and Universities to produce the interim Regional
Skills Strategy. The joint sign off by emda and the East
Midlands' Leaders' Board will take place via the Joint Strategy
Advisory Board (JSAB) which will have responsibility for the Regional
Strategy. The JSAB has already agreed its governance structures
to enable it to discharge its responsibilities with regard to
the development, implementation and monitoring of the Regional
Strategy, including the additional skills responsibilities. One
of the four thematic working groups (Economy and Skills) will
support the development and implementation of the Regional Skills
Strategy.
2.9 In addition to the production of the
interim Regional Skills Strategy, emda will refresh the
Regional Priorities Statement by the end of the summer. BIS will
include the Regional Priorities Statements from all RDAs in the
national Skills Investment Strategy 2011-12, against which the
SFA will contract with providers.
Annex One
REGIONAL PRIORITIES STATEMENT EAST MIDLANDS
2010-11
A SUMMARY OF SECTOR, SPATIAL, EMPLOYER AND
LEARNER TYPES PRIORITIES FOR SKILLS INVESTMENT
HISTORICAL TRENDS
These reflect progress towards skills targets/impacts
and identified need for investment.
The East Midlands has low demand for skills
on behalf of employers reinforcing a lack of incentive amongst
the workforce to improve their skills. Key indicators of this
situation are -
— Comparatively high levels of employment
coupled with lower than average pay.
— Lower proportions of total employment
in higher skill occupations.
— Lower proportions of the working age
population with higher level skills and spatial concentrations
of low skilled workers.
— High representation of businesses engaged
in low value activities eg routine manufacturing or services,
which are spatially concentrated, for example parts of Lincolnshire.
The upskilling of the East Midlands' workforce
has been significant to date but the projected gap between 2011
and 2020 regional performance and PSA Leitch targets is still
significant for intermediate qualifications.
There are concentrations of low skilled workers
and low business demand for skills in the north and east of the
region. There is also a divide between workplace and resident-based
skills and earnings with better qualified, more highly paid professionals
living in the rural and sub-urban south and west of the region
and commuting to work in urban centres whilst lower qualified,
lower paid individuals are more reliant on local labour markets.
CURRENT NEEDS
These will be based on replacement demand, demand
identified by Business Link and Jobcentre Plus, current skills
vacancies and shortages and inward investment opportunities—distinct
regional information which will inform adult skills in today's
economy.
The current RES, "A Flourishing region"i,
sets out the following priority actions to address historical
and current skills issues in the region: Developing the skills
levels of the current and future workforce; Stimulating business
demand for skills; Improving the infrastructure and responsiveness
of skills supply; Exploiting the opportunities of the Higher Education
sector; Develop entrepreneurship skills.
Sub-regional skills priorities
— Replacement demand for high and intermediate
skills (including apprenticeships and sector-led Further Education
provision) in Transport Equipment, Advanced Engineering in southern
Nottinghamshire, Derbyshire, Leicestershire and Northamptonshire.
— Building on higher level skills, linking
to R&D activity in Health/Life Science and Pharmaceuticals,
building on centers of excellence in Nottingham, Leicester and
Loughborough.
— Addressing low skills in north Derbyshire,
north Nottinghamshire (linking to priorities in South Yorkshire)
and coastal Lincolnshire, coupled with business support activities
to improve demand for employment.
— Addressing low skills and access to employment
in urban areas, principally Nottingham, Leicester, Derby, Corby
and Lincoln.
— There were 8,450 Skills Shortage
Vacancies (SSVs) in 2007, equivalent to 20.6% of all vacancies
in the region comparing to 21.1% for Englandii. SSVs are
most common in Manufacturing 33%, Engineering 33% and Construction
(32%).iii Significant sub-regional differences show Derbyshire
as the lowest proportion at 16.8%, with Lincolnshire and Rutland
the highest at 27.2%.
FUTURE NEEDS
These will be based on known and expected demand
from key investments in places (the strategic sites identified
in the Regional Funding Advice) and the regional Innovation and
Enterprise Strategies and more generic needs (customer service
skills, adaptability, enterprise team working communications,
etc)
Long term drivers of change
— Replacement demand across the region's
business base is a significant challenge due to the ageing workforce.
— Changing sectoral and occupational structure
of the workforce due to technological development creating a need
for a strong technician class.
— Increased pressure on businesses operating
in a global knowledge economy requires the East Midlands to have
an educated, innovative and enterprising workforce.
— Critical to all priority sectors is the
need to ensure an increased flow of STEM skills.
Skills Gaps and Shortages
— Skills gaps tend to be concentrated in
Engineering, Construction, Hospitality and Retail.
— Engineering skills gaps relate to higher
level skills.
— Skills gaps are most common for workers
performing quite routine tasks eg Sales and Elementary Occupationsiv.
— Skills shortages are concentrated in
priority sectors Manufacturing, Engineering and Constructionv.
— Skills gaps/shortages are concentrated
in specific sub-regions eg Lincolnshire, Rutland and Leicester.
Replacement Demand
The recession will exacerbate some of the concentrations
of low skilled, transitory and casualised employment. Key skills
challenges associated with recession include meeting replacement
demand and retaining skilled workers.
— The extent of replacement demand between
2007 and 2017 in the East Midlands is forecast to be
the most significant among Managers and Senior Officials, Professionals
and Associate Professionals, Administrative and Secretarial, Skilled
Trades and Elementary Occupations.
— Replacement demand will considerably
exceed the number of jobs created by economic growth and is likely
to be much more significant in terms of education and training
requirements than expansion demand. This is particularly the case
in terms of craft, technician and professional skills.
RES AND NEW
INDUSTRY NEW
JOBS (NINJ) HIGH
GROWTH OPPORTUNITIES
FOR 2010-11 AND
BEYOND
These will be based on inward investment opportunities
and identified regional sectors under New Industry, New Jobs.
RES priority sector Transport Equipment includes
the aerospace, automotive and rail manufacture sectors and are
particularly important in Derby, Derbyshire and Northamptonshire
working with MKSM partnersvi. Thirty large employers indicate
the strategic significance of the sector in the region with assets
concentrated in Derby and its surrounding area. Key skills requirements:
— Increase investment in skills to tackle
the challenge of replacement demand resulting from the sector's
ageing workforce.
— Increase recruitment from ethnic minority
groups, females and older workersvii.
— Provide support for the joint emda/AWM
Manufacturing Technology Centre, located in Anstey Park, Coventry,
after it opens in summer of 2011.
RES priority sector Healthcare and Bioscience
covers the manufacture of medical equipment and pharmaceuticals,
R&D in life sciences and also the health-care sector, principally
represented by the NHS. There are particular strengths in this
sector in Nottingham. An increasing demand for products and services
associated with Life Sciences and pharmaceuticals due to the significant
growth of the region's population. Also, the aging population
will increase the demand for pharmaceuticals, medical equipment,
and other health care products. Healthcare is expected to be amongst
the fastest growing sectors in both the East Midlands and nationally.
In the East Midlands output and employment in the sector are expected
to grow significantly faster than nationallyviii. Key skills requirements:
— Management and leadership skill shortages
across the sector.
— 16% of establishments within the East
Midlands health sector report having skills gaps within their
workforce citing Written Communication, Technical and Practical
skills are the main ones. ix
RES priority sector Sustainable Construction.
The quality of the built environment is hugely important to the
quality of life within the region, and to the economy of the East
Midlands. Offsite Manufacturing is driving the construction sector
to learn as much as possible from the manufacturing sector and
incorporate the development of low carbon technologies. Key skills
requirements:
— Training providers to develop programmes
to meet the needs for an adaptable, flexible and mobile workforce.
— Co-ordinate the availability of opportunities
for work experience and the training of apprentices and other
vocational trainees.x
RES priority sector Food and Drink covers a
range of different activities, from routine food preparation and
packaging in Coastal Lincolnshire to innovative food production
sciences around Leicester. Workplaces in the sector are concentrated
in Lincolnshire (23%), Northamptonshire (working with MKSM partnersxi)
(18%) and Leicestershire (15%)xii. Key skills requirementsxiii:
— 8% of East Midlands industry workers
have no qualifications.
— Workforce skills gaps are more common
than skills shortages (affecting 15%) and most evident in lower
skilled Machine Operatives and Managerial positions.
NINJ priority Low Carbon is covered in a number
of RES Priority Actions, including one to "Exploit Low Carbon
Technologies". This set of technologies is important because
the region is a key exporter of energy and building materials
and also likely to see an increased demand for housing due to
population growth. The region has a number of existing strength,
ongoing investment and university collaborations relevant to low
carbon sector. In particular the Energy Technologies Institute
(ETI), located in Loughborough, which is an East Midlands/West
Midlands collaboration between Nottingham, Birmingham and Loughborough
Universities and emda and AWM.
NINJ priority Digital technologies will play
an increasing role in delivering a low carbon economy. The region
has acknowledged strengths in Transport Technologies (identified
in the region's Innovation Strategy) particularly in the area
of Space and Global Navigation Satellite Systems (GNSS) where
there is internationally acknowledged expertise through universities
and a network of businesses based in the region. Key skills requirementsxiv:
— IT & Telecoms workforce is an ageing
one. At the same time, IT professionals are highly qualified and
therefore, replacement demand is likely to be an issue in the
future.
Note on consultation process
This statement is based on "The East Midlands
in 2009" the refreshed evidence base for the region which
has been subject to a 12 week consultation process following
Cabinet Office guidance. This evidence base underpins the RES
refresh for 2010 which will be the designate RES from April
1st 2010 and forms the basis of this Regional Priorities
Statement.
emda has consulted with key regional stakeholders
and delivery partners in the skills field in the development of
this statement.
Skills gaps refer to the extent to which employers
perceive their employees as not being fully proficient to undertake
their job.
Skill shortage vacancies are those hard-to fill
vacancies which result from applicants not having the required
skills, experience, or qualification which the employer demands.
Future occupation structure depends on the interaction
of two demands:
1. Replacement demand takes into account
the need to replace those who leave their jobs because of retirement
or other reasons. Therefore, these jobs are not new jobs but jobs
that need filling as their current occupants leave the labour
market (predominantly into retirement).
2. Expansion demand refers to job creation
which is generated by sectoral growth. These jobs are genuinely
new jobs which did not exist before and which are the result of
the changing demand for goods and services. The changing demand
is driven by technological change, globalisation and other factors
which continuously influence the patterns of demand for goods
and services and consequently the demand for skills. Occupations
that benefit from such changes will experience employment growth.
Conversely some will experience job losses.
REFERENCESi "A
Flourishing Region", regional Economic Strategy for the East
Midlands 2006-20, http://www.emda.org.uk/res/
ii "The East Midlands in 2009" cited
from BMG Research on behalf of The Learning and Skills Council
in the East Midlands, "National Employers Skills Survey
2007: report of results for the East Midlands", Table
21.
iii "The East Midlands in 2009" cited
from BMG Research on behalf of The Learning and Skills Council
in the East Midlands, "National Employers Skills Survey
2007: report of results for the East Midlands",
iv "The East Midlands in 2009" cited
from BMG Research on behalf of The Learning and Skills Council
in the East Midlands, "National Employers Skills Survey
2007: report of results for the East Midlands"
v "The East Midlands in 2009" cited
from BMG Research on behalf of The Learning and Skills Council
in the East Midlands, "National Employers Skills Survey
2007: report of results for the East Midlands", page
36, Table 23
vi MKSM Economic Development Implementation Plan
(EDIP) for emda, eeda and seeda
vii Engineering Skills Balance Sheets, East Midlands
http://www.semta.org.uk/public_bodies/research/engineering_balance_sheets.aspx
viii "The East Midlands in 2009" cited
from BMG Research on behalf of The Learning and Skills Council
in the East Midlands, "National Employers Skills Survey
2007: report of results for the East Midlands". http://www.intelligenceeastmidlands.org.uk/content/view/1363/
ix Skills for Health, LMI Regional reports, National
Employers Survey 2007
x Construction Sector RES Implementation plan—Feb
2008
xi MKSM Economic Development Implementation Plan
(EDIP) for emda, eeda and seeda
xii Improve Regional LMI data August 2009, http://www.improve-skills.co.uk/downloads/research_lmi/Regional/EM-2009-template.pdf
xiii Improve Regional LMI data August 2009, http://www.improve-skills.co.uk/downloads/research_lmi/Regional/EM-2009-template.pdf
xiv E-skills, Latest LMI, East Midlands, http://www.e-skills.com/Around-the-UK/Regions/2114
(accessed 30 October 2009).
22 March 2010
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