Headlines
- Skills levels in the region are increasing.
- However, the proportion of the population qualified to NVQ Level 4 remains lower than the national average and the proportion of young people not in education, employment or training remains relatively high.
Skills levels among the North East population have increased considerably over recent years. The number of young people and adults qualified to at least Level 2 or Level 3 has increased substantially to the point where it is now equivalent or better than the national average. There are still substantial numbers of people in the region without qualifications, however, or with qualifications below Level 2. This is particularly true among older sections of the population. Basic skills needs remain a primary target of publicly-funded skills programmes as substandard literacy and numeracy represent a significant barrier to labour market entry. There are also relatively low numbers of people qualified at higher levels (Level 4 and above) to drive the high skill economy that the region is seeking to develop – although weak demand for higher level skills is also thought to contribute to this shortfall.
Policy context
A number of strategies have been put in place to promote the development of skills that meet the needs of the North East economy. At times of economic difficulty, employers’ attention inevitably turns to skills to help them respond to the economic situation and to prepare for the forthcoming upturn. Individuals also tend to focus more on their skills to help improve their position in the labour market. In the North East, participation in Further Education and employer engagement have remained strong. The Regional Employability Framework has supported people from unemployment into sustainable jobs. As new areas of economic activity emerge in the region, public investment aims to respond with sustained focus on the demands of employers, strengthening the employer voice in employment and skills priorities. Nationally, the Department of Business, Innovation and Skills is committed to engaging employers, colleges and training providers to respond to the needs of key sectors and markets. Reform to Higher Education will see individuals contribute a greater proportion of the cost of tuition, with HE Institutions needing to demonstrably meet students’ needs to secure the funding they require.. At the same time, Government policy is clear that the financial reward for moving from welfare dependency into work should be greater, although the process through which this is achieved will depend on the detail of the financial envelope within which the Department for Work and Pensions must operate.
Adult attainment
Adults aged 19 to retirement in the North East are less likely to have qualifications at Level 4 or above than adults across England. It is more likely that their highest level of qualification is at Level 2 or Level 3.
As of 2009 data, an estimated 461,000 adults aged 16 to retirement – 31 per cent of the region’s adult population – are not qualified to Level 2. A further 332,000 adults in the region are qualified to Level 2, but not Level 3.
Inequalities in qualification levels among adults in the region reflect those seen nationally:
- Women are less likely to be qualified to Level 2 or above than men.
- The older an adult, the less likely he or she is to be qualified to Level 2 or Level 3. Older adults are appreciably less likely to have any formal qualifications than younger adults.
- Generally speaking, adults from black and minority ethnic communities are slightly less likely to have qualifications at Level 2 than white adults, though they are more likely to be qualified to Level 4 or above. Data is not available to show variations in qualification levels between different BME groups.
- Adults with disabilities are less likely to be qualified to Level 2 or above than those without. In particular, they are less likely to have qualifications at Level 3 or Level 4. They are more likely to have no formal qualifications at all.
Achievement by age 19
Since 2004/05, the North East has seen one of the biggest improvements of any English region in attainment among young people. This improvement has brought attainment at Level 2 by age 19 in the region close to the national average, a significant improvement from a historical position as the worst performing region in the country. Attainment at Level 3 by age 19, however, remains lower in the North East than in any other region, despite improving at a similar rate to the rest of England over the 2004/05 - 2008/09 period.
75.4 per cent of the North East cohort aged 19 in 2009 achieved a Level 2 qualification by the age of 19, compared with the national average of 75.9 per cent. Despite improving attainment, around 8,000 young people – around a quarter of the regional cohort – reached 19 years old in 2009 without achieving a Level 2. Currently approximately 50% of North East school leavers achieve a Level 2 qualification (equivalent to 5 GCSEs graded A*-C). Therefore approximately half of the residual cohort persevere with learning and achieve a Level 2 qualification by the age of 19.
44.1 per cent of the regional cohort in 2009 achieved a Level 3 qualification by the age of 19, some way below the national average of 49.4 per cent.
Young men are less likely than young women to achieve Level 2 or Level 3 qualifications by their 19th birthday. Young learners with learning difficulties and/or disabilities are far less likely than those without to achieve Level 2 or Level 3 qualifications by the age of 19. Young learners from disadvantaged backgrounds are also less likely than average to achieve Level 2 or Level 3 qualifications by the age of 19.
Historically, the low levels of attainment at Level 3 by age 19 in the North East have reflected the need for many young people to ‘catch up’ and achieve a Level 2 after leaving school. However, the relatively low level of attainment at Level 3 also reflects employer demand. The region’s labour market dictates that young people leaving school with a Level 2 qualification often undertake a second Level 2 in a vocational area rather than progressing to a Level 3. Some learners are also required to achieve a vocational Level 2 qualification in a particular sector before they can progress to Level 3, which they may go on to achieve after the age of 19.
The latest available data suggests that many adults in the North East lack the Skills for Life needed to progress in learning and work. In 2003, 22 per cent of working age adults in the region had literacy skills below Level 1, and 28 per cent had numeracy skills below Entry Level 3.
This data, however, is several years out of date – since the Skills for Life Survey was conducted in 2003, significant numbers of learners have achieved Skills for Life qualifications in the North East. In 2007/08, North East learners achieved almost 34,000 literacy and language Skills for Life aims, and around 24,000 numeracy aims.
Learning
Overall rates of participation in learning among adults aged 16–69 year olds in the North East are in line with the national average. 69 per cent of adults in the region took part in some form of learning in 2006, compared with 68 per cent in England.
Participation in taught learning among adults in the North East is above average. 49 per cent of adults in the region took part in taught learning in 2006, compared with 47 per cent in England.
Historically, participation in job-related training among working age adults living in the North East has also been above the national average. Participation in job-related training among the region’s adults has fallen over the last 2 years, while there has been a more gradual decline across England as a whole.
Adults who are well qualified tend to be the most positive about learning, though they can face significant time barriers due to family or work commitments. The better qualified an adult, the more likely he or she is to participate in learning. In part, this reflects inequalities in opportunities to access learning, and job-related training in particular. But more highly qualified adults are also more likely to take up training if it is offered than adults who are less well qualified.
Older adults, those on low incomes, and those with low or no qualifications tend to have more negative attitudes towards learning. Many also have significant barriers to learning, including work and family pressures on time, but also lack of confidence, basic skills problems, lack of information on or awareness of learning opportunities, and limited financial resources.
Young People and Learning
Overall participation rates in further education and training among 16 and 17 year olds in the North East have not increased significantly since 2000 – though participation rates have fluctuated, and in broad terms there has been an upward trend in participation among both 16 and 17 year olds since lows in 2003. Participation rates among young people in the region compare favourably with the national average.
Some 91 per cent of the North East cohort aged 16 in 2008 were participating in further education and training at age 16. By age 17, this fell to 86 per cent of the cohort in learning. However, this is in line with the Government’s target for participation among 17 year olds in 2010 (86 per cent, on the trajectory towards 100 per cent participation in 2013).
Since 2001, the drop-out rate between ages 16 and 17 in the region has averaged around 10 per cent of the cohort, slightly above the rate seen nationally (an average 9 per cent). Local Connexions data suggests a greater drop-out by age 18. There is evidence to suggest that some young people complete a planned programme between the ages of 16 and 17, and move into paid employment in preference to further learning.
Young People not in Education, Employment or Training
The proportion of young people in the North East who are not in education, employment or training is above average, though the NEET rate varies considerably across different local authorities. 9.0 per cent of 16–18 year olds in the North East were not in education, employment or training in the period November 2009–January 2010, compared with the national average of 6.4 per cent. Although the gap between the NEET rate in the region and the national average appears to be narrowing, there is still some way to go.
16 year olds make up 10 per cent of the NEET group, reflecting the relatively high rate of participation in learning among this age group. The numbers of 17 and 18 year olds who are NEET are considerably higher. There is a significant inflow to the NEET group at each of these ages among young people who leave learning or fail to progress.
There is considerable turnover among the NEET group in the region, with large numbers of young people becoming NEET or entering education, employment or training at different times of the year. There is also a large core of young people who have been out of education, employment and training for extended periods.
Some 80 per cent of the NEET group are considered to be available to the labour market. The majority are seeking employment or training. Three quarters (67 per cent) of young people in the NEET group who were not available to the labour market in May 2009 were teenage parents (predominantly mothers) or were pregnant. Teenage parents and expectant mothers accounted for 14 per cent of all young people who are not in education, employment or training, regardless of availability to the labour market.
Other young people who are more likely than average to be NEET include those who are looked after, care leavers, substance misusers and those supervised by Youth Offending Teams.
There is a strong correlation between areas with high levels of NEET and those with high levels of deprivation, while young people who are NEET are under-represented in more affluent areas. Areas where the proportion of young people who are not in education, employment or training is high also tend to have relatively high proportions of the adult population who lack qualifications at Level 2, who have basic skills needs, or who claim income-related state benefits.
Skills shortages
In the year to summer 2009, some 3 per cent of establishments in the North East experienced difficulties filling one or more vacancies due to a shortage of applicants with the skills, experience or qualifications required. Such skills shortage vacancies accounted for 17 per cent of all vacancies. These proportions were in line with national averages.
Skills shortage vacancies affected recruitment in professional, skilled trades and machine operative jobs more than recruitment in other occupations. Technical, practical and job-specific skills were most commonly reported by employers as being difficult to obtain from applicants.
Customer care skills, problem solving skills, team working skills and technical skills were also reported to be difficult to obtain. There were also difficulties associated with job applicants’ generic skills, particularly in relation to oral and written communication, literacy and numeracy. General IT skills, office-based administrative skills and IT professional skills were also cited as problem areas.
Skills gaps
Skills gaps exist where employees are not fully proficient at their current job. 19.6 per cent of establishments in the North East reported skills gaps in their existing workforce in summer 2009, slightly above the national average of 19 per cent. Nevertheless, the proportion of establishments reporting skills gaps in the region is falling, from 26 per cent in 2003 and 21 per cent in 2005.
Skills gaps were most commonly reported in traditionally low skilled and semi-skilled jobs, particularly elementary and sales occupations. Significant minorities of employees in other occupations were also reported to have skills gaps.
Employers most commonly reported that technical, practical or job-specific skills need improving among staff identified as having a skills gap. Team working skills, customer care skills and problem solving skills were also commonly reported to need improving. Oral and written communication skills, general IT skills, management skills and office-based administrative skills were also cited as needing improvement.
The most common reason reported by employers for their staff not being fully proficient was that they lack experience, or had only recently been recruited. Employers also acknowledged that their failure to invest in the training and development of their staff can lead to skills gaps emerging.
An apparent unwillingness or inability of staff to engage in training and development is also reported to lead to skills gaps, with employers citing a lack of motivation among staff and the inability of the workforce to keep up with change.
The overwhelming response to skills gaps was to increase training activity or to increase the amount spent on training. Less common responses were to increase supervision, introduce more staff appraisals or introduce mentoring schemes. A significant proportion of employers with staff who were not fully proficient, however, did nothing to address the skills gaps among their workforce.
Future skills needs
Projections suggest that total employment in the North East will increase by 3 per cent between 2007 and 2017, compared with growth of 7 per cent in England. The trend in the economy towards service sector growth is expected to continue, offset by decline in manufacturing and production sectors. The number of jobs requiring intermediate and higher level skills is projected to grow, while the number of jobs in craft level occupations and in occupations with low skills needs is projected to fall.
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Projected employer demand by occupation, North East, 2007–2017
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Projected employment change
2007–2017
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Expansion demand
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Replacement demand
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Net recruitment demand
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Managers and Senior Officials
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11%
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15,400
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54,000
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69,500
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Professional
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7%
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9,700
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49,800
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59,600
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Associate Professional and Technical
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7%
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11,100
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52,200
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63,300
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Administrative and Secretarial
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–5%
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–6,300
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57,700
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51,300
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Skilled Trades
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–7%
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–10,800
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47,400
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36,600
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Personal Service
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8%
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7,600
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38,600
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46,200
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Sales and Customer Service
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12%
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13,800
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41,400
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55,200
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Process, Plant and Machine Operatives
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–8%
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–8,200
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36,700
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28,500
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Elementary
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2%
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3,500
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57,300
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60,800
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All occupations
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3%
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35,800
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435,200
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471,000
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Source: UKCES Working Futures III
All sectors and occupations will require new employees over the next decade, including those projected to decline in overall employment terms, because of the need to replace staff lost through turnover and retirement. Total replacement demand in the North East is estimated to be around 12 times as great as net expansion demand (the number of new jobs created minus the number of jobs lost).
The projections suggest that between 2007 and 2017, North East employers will need to fill over 470,000 vacancies.
Employer Engagement in Training and Development
Employers in the North East are more likely than average to provide training for their staff. 70 per cent of establishments in the region funded or arranged training in the year to summer 2007, the highest proportion of any region, and above the national average of 67 per cent.
Employers in the region invested an estimated £2,015 million in training and development in the year to summer 2007. Investment in training among employers in the North East increased by 44 per cent since 2005 – the largest increase of any region.
Establishments in the North East invested a higher proportion of their training budgets in off-the-job training than in any other region. In the year to summer 2007, employers in the region invested 55 per cent of their training expenditure in off-the-job training, compared with the national average of 47 per cent.
More than 689,000 people working in the North East received training arranged or funded by their employer in the year to summer 2007. This equates to 68 per cent of the workforce, slightly lower than in the year to summer 2005 (70 per cent). Despite this fall, people working in the North East were more likely to receive training than those in other regions.
By far the most common reason for not providing training was a perceived lack of need. 64 per cent of establishments which did not fund or arrange training reported that this was because all their staff were fully proficient. The second most common reason for not providing training was that the organisation prefers staff to learn by experience (‘learn as you go’), but this was cited by just 7 per cent of establishments which did not fund or arrange training.
Smaller proportions suggested that a lack of time prevented training and development, that employees were too busy to go on training courses or that managers were too busy to organise training. A very small proportion of non-training establishments (2 per cent) reported that the courses they sought were not available locally.