57.Several sectors of the UK economy are currently facing skills shortages or skills mismatches. The Recruitment and Employment Confederation, representing the recruitment industry, told us that there was “a crisis of large proportions as employers continue to find themselves unable to source the skilled individuals they desperately need”. It highlighted a number of sectors reporting shortages of temporary and permanent staff and noted that “sectors consistently suffering from a shortage of skilled workers range from engineering and IT to accounting and medical care”.97
58.We were told that more should be done to help young people reflect on how their aspirations fit with the opportunities available in the labour market. City & Guilds, a vocational education organisation, carried out research into 14–19 aspirations in 2015, which mapped young people’s responses against jobs available now and those forecast to be available in the future. The results suggested that there was a mismatch between aspirations and opportunities: 26% of the respondents, for instance, indicated that they “would like to work in professional, scientific and technical roles, whereas the proportion of people working in this sector is forecast to be 9% in 2022”.98 Of equal concern to us was the evidence we received about people being over-qualified for their jobs. The Chartered Institute of Personnel and Development described research it had carried out, which “found that 58.8% of graduates are currently working in non-graduate roles—a percentage only exceeded by Greece and Estonia in the OECD”.99 Several pieces of evidence pointed out that this skills mismatch was contributing to the country’s productivity problem.100
59.We heard time and again that good careers information, advice and guidance had an important role to play in tackling the skills gap, by helping to better align young people’s aspirations with the opportunities most likely to be available to them.101 National Grid, an electricity and gas company employing people in a wide variety of roles, said that current careers provision was having negative consequences because it was “failing to inspire and raise the aspirations of secondary school students, resulting in too many young people struggling to secure employment at a time when employers cannot find the skills they need”.102
60.Investing in good quality careers advice can help to tackle the skills misalignment by making young people aware of the opportunities available in the job market and helping them to match these opportunities to their skills and interests. Failing to invest will only exacerbate the skills mismatch, which in turn will have a negative impact on the country’s productivity.
61.The Association of School and College Leaders told us that direct access to labour market information could “help young people make positive and proactive choices”.103 One of the Gatsby Foundation’s benchmarks relates to “learning from career and labour market information”: it states that pupils and their parents should have access to good quality labour market information but also “will need the support of an informed adviser to make best use of available information”.104 In our view, accurate labour market information is vital to providing young people and their parents with guidance about available routes and salaries; it is also important to recognise the key role careers advisers play in helping young to understand this information and how the opportunities in the jobs market fit with their skills and aspirations.
62.At a national level, labour market information has been provided in recent years by the UK Commission on Employment and Skills (UKCES) in a package known as “LMI for All”.105 This package includes details of employment levels in different occupations, average earnings, the skills required in particular jobs and information about the relevant higher education qualifications.106 The Government decided, as part of the 2015 Spending Review, to withdraw funding from UKCES.107 A number of witnesses to our inquiry spoke very highly of UKCES: in particular, they considered that the LMI for All data had a very valuable role to play in supporting careers guidance and urged that it be preserved.108 The Ministers agreed that LMI for All was a “valuable and trusted national data set” and assured us that, following the closure of UKCES, it would continue to operate under the project management of BIS.109 The Committee is disappointed that the consistently high quality analysis and advice provided by the UK Commission on Employment and Skills (UKCES) is to be lost. We welcome the Government’s commitment to continue operating the LMI for All dataset. We trust that the Department for Business, Innovation and Skills will build upon the good work of the UK Commission for Employment and Skills. We recommend that the Government set out in its response how it will ensure that LMI data published in future will match the high standards achieved by UKCES. We recommend that in its careers strategy, the Government set out its plans for further improving the quality and usefulness of the data.
63.Labour market information at a national level is important, as people may relocate for particular jobs. We also heard about the importance of good information at the local level, and the role that Local Enterprise Partnerships (LEPs) could play in providing it. We were impressed to hear about the range of support being offered by some LEPs. The West of England LEP told us that it produced an “annual series of user-friendly reports [bringing] local employment data to life and [ … ] designed to support careers and employability professionals”. It was also planning to hold a workshop on how to understand this information, and to send a film of the event to all schools.110
64.It was nevertheless made clear to us that, while some LEPs were doing a lot to provide labour market information, others were not. Education for Engineering told us that such information at the local level was “extremely difficult to access at the moment, with many LEPs not yet on a statistically strong footing”.111
65.LEPs have an important role to play in the provision of local labour market information. We recommend that the Government take steps to ensure that all Local Enterprise Partnerships have the capacity and are encouraged to provide up-to-date good quality labour market information to schools, college and careers professionals within their local area. The Careers & Enterprise Company could be charged with supporting LEPs to improve their data provision. Money saved by the rationalisation of national careers organisations we proposed earlier in this Report could be used to boost the capacity of LEPs for this and other roles in support of careers provision.
101 See, for example, North East Chambers of Chambers (CAD 53) para 2, Cornwall Council (CAD 91) para 3.6, All-Party Parliamentary Group on Skills and Employment (CAD 93) para 4.
105 LMI for All, accessed 25 May 2016
108 See, for example, Q 37 (Professor Sir John Holman), Q 39 (Dr Deirdre Hughes), Q 55 (Martin Doel), Q 88 (Virginia Isaac).
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4 July 2016