Written Statement: Employability Plan Annual Statement 2021

Last week, I launched our plan to build resilience and reconstruct the economy.  I signalled a commitment to support people, both in and out of work, to make the most of their potential, improve their adaptability and employability prospects, or retrain and upskill in new and high-growth areas.

Today, I launch our new employer recruitment and skills package to demonstrate that ‘we’re in your corner’.  We are doing this with the support of our colleges and employability providers to help businesses access and train new recruits, adapt the skills of the existing workforce and create inclusive workplaces where individuals can thrive and develop. 

Going into the pandemic, we had a record low unemployment rate and economic inactivity reached a record low in 2018. The employment levels of disabled people were rising and the levels of young people aged 19-24 not in education and employment had decreased steadily. Since 2014, we’ve supported 27,080 people into work and 144,440 people to gain qualifications through £861m investment from the EU structural fund programmes.

Since 2008, the proportion of working age people with no qualifications has nearly halved and those with higher education level skills increased by 11 percentage points. The gender pay gap for full-time employees and the pay gap between White and Black, Asian and Minority Ethnic full-time employees were at the lowest values on record, and smaller than the UK’s. In 2018-19, over half of all new public appointments in Wales were women. 

Despite this progress, the pandemic has propelled us into the most challenging of circumstances instigating a period of profound change and disruption to the labour market. It has surfaced and deepened existing societal trends such as the security of work and income, an aging population and underlying vulnerability to ill health, industrial shifts to the economy and digitalisation.  It is further compounded by the employment impacts of EU exit which includes the departure of foreign-born workers. 

The impact on the labour market hasn’t affected all groups equally.  The hardest hit are those entering the labour market for the first time or with lower qualification levels, those in low-paid, low skilled ‘fragile’ employment, or those who face existing labour market disadvantage, including disabled people and Black, Asian and Minority Ethnic and other minority groups. 

Whilst we anticipate economic conditions will improve, we expect the withdrawal of existing job protection interventions, the UK’s departure from the EU and on-going global economic uncertainty will continue to impact on jobs, hours worked and the levels of hiring in the economy. These, coupled with the shifts to home and remote working and technological changes which favours higher skilled workers, risks greater polarisation of the labour market.

Further, with our new devolved responsibilities for income tax in Wales, helping people secure rewarding opportunities is crucial to maintaining the revenues that fund our public services in Wales. 

Recognising these challenges, in July 2020 we invested £40m in jobs and skills to boost front line services and programmes responding to the potential volumes of individuals at risk of redundancy, or seeking new or alternative employment or skills.  

The Covid Commitment has already supported 22,000 individuals with careers advice and guidance via Working wales, with Community Employability Programmes supporting the employability skills of 9,000 people, with nearly 4,000 entering employment during the pandemic. 6,000 people applied for a Personal Learning Account, 2,000 ReAct vocational training grants have been awarded, and 1300 Apprentices recruited via employer incentives.

We do not underestimate the scale of the negative impact on the labour market and on individuals’ incomes and wellbeing. Experience from previous recessions tells us that young people will bear the scars of this crisis for many years.  We also know helping people to avoid unemployment, particularly long spells, is a key component in dealing with the mental health implications of this crisis.

Going forward, we will need a relentless focus on:

• young people transitioning into further learning, employment or entrepreneurship;
• finding new ways to reach those most impacted to improve their employability;  
• supporting the current workforce to restart or reskill following unemployment or furlough; 
• harnessing the potential of lifelong learning to grow our digital, advanced engineering and green skills base and support the foundational economy to thrive;
• championing fair work, promoting mental health and wellbeing in the workplace and enabling job and pay progression.

To deliver our ambitions, we will work closely with the Department for Work and Pensions to maximise UK Government investment in employment support in Wales by adding value to the national offer. We will align and focus our skills and employability policies and programmes to deliver against these challenging priorities, in the context of the rundown of European funded support in Wales and the economic impacts of EU exit. We will also need to maximise regional leadership, collaboration and infrastructure to exploit the potential of regional investment, such as City and Growth Deals, to deliver our agenda. 

Today, I call on Welsh leaders, employers, our social partners, the employability and skills network and our colleges and higher education institutions, in all corners of Wales to work together to help our people, businesses and communities to prevail and prosper.

I am confident our continued focus on jobs and skills will benefit the people of Wales.  I will continue to keep Members updated on our progress.