Written Statement - Working Futures 2010-2020: Summary Report for Wales and Employer Skills Survey 2011 Wales Report

I am pleased to inform you of the recent publication of two Wales specific UK Commission for Employment and Skills (UKCES) Reports:

Working Futures 2010-2020: Summary Report for Wales; and
Employer Skills Survey 2011: Wales National Report.

Working Futures 2010-2020 provides projections for output and the demand and supply of skills between 2010 and 2020.  The report provides detailed national level data on anticipated employment trends against sectors for this period.  Some of the key trends highlighted include:

• largest increases in employment are projected in high skill occupations;
• the need to replace workers leaving jobs is projected to be almost 8 times higher than the need to fill new jobs;
• there will be an expected growing demand for those with L4+ qualifications; and
• the proportion of workers with no qualifications is expected to decrease.

The information in Working Futures 2010-2020 will be combined with locally generated intelligence and labour market information to ensure closer alignment of future skills delivery with the needs of both businesses/employers and individuals in Wales.  As Deputy Minister for Skills my focus is to deliver a single cohesive skills programme which can provide sustained employment and progression opportunities.  The success of this relies, in part, on obtaining high quality labour market intelligence which recognises both current and future demand and expectation.  Working Futures is a key source of that data and will allow us to better evidence-base our targeting of resources in order to meet the forecast demand for future occupational needs.

The UK Commission’s Employer Skills Survey 2011 is the key UK data source on employer demand for and investment in skills.  I am pleased to state that in Wales 6,012 interviews were completed across all sectors and covering all sizes of employer.  The scale of the survey means we can be confident in the results.  The survey covered topics such as skill related recruitment difficulties, skills gaps, training investment and the work-readiness of education leavers.  A few important key findings include:

• while there continues to be scope for improvement, there is evidence that the education system is mostly preparing young people for the world of work.  Employers mostly found education leavers to be well prepared for work, with 80% of those who had recruited from Higher Education finding this to be the case.
• only four per cent of establishments reported having a vacancy they were finding difficult to fill at the time of the survey (March to July 2011).  Importantly, these establishments also stated that this was having a knock-on effect to their overall business in terms of issues such as morale and meeting customer service objectives;
• overall across Wales six per cent of establishments reported they had difficulties retaining staff, most commonly among skilled trades occupations and elementary staff. Most commonly these difficulties were attributed to a lack of interest in the work in question, a factor in three-fifths of all establishments with retention difficulties.
• in Wales, 59 per cent of establishments had provided on- or off-the-job training for some or all of their staff in the 12 months preceding the survey.  Establishments in Wales provide the equivalent of 4.2 days per employee per annum and 7.5 days per person trained, which is very similar to England and the UK as a whole, but higher than Northern Ireland.
• a slightly higher proportion of staff in Wales are trained than across the UK as a whole, but the per trainee expenditure (£2,600 per person trained) is lower in Wales than it is in England (£3,325 per person trained).
• the most common reason Welsh employers gave for not training is that employers consider their staff to be fully proficient and/or that their staff did not need training (mentioned spontaneously by 65 per cent of non-trainers).  Few respondents pointed to failures in training supply as a reason for not training.

I believe that the findings from both these reports are exceptionally important for Wales. On the one hand they provide some genuine encouragement, for example our education leavers are considered to be well prepared for their first jobs.  On the other hand they also present a genuine challenge.  For instance a higher proportion of skills gaps in Wales are considered to be due in part to issues relating to literacy and numeracy compared to the rest of the UK.  The current Review of Qualifications and separate Curriculum Review will be significant as we seek to address these issues.

I will continue to use the intelligence generated by these reports and others as evidence to inform policy.  Through the LMI Project I initiated last year, we are encouraging FE providers to use the data for planning and provision.  In addition, projections from Working Futures and data from surveys have been utilised as part of the National Planning and Funding System Review, the Review of Qualifications and with respect to the allocations policy for apprenticeships.  Furthermore, officials from within the department are working with the Department for Business, Enterprise, Technology and Science to ensure that learning, development and education gaps are identified by the Sector Panels and that these are taken into account when forward requirements for training are considered, including National Occupational Standards, Qualifications and Apprenticeships.

My absolute priority in these tough times is to create jobs and enable growth.  The Steps to Employment programme, which was introduced on 1 August 2011 and is offered throughout Wales, offers adults not in employment the opportunity to gain confidence, improve their skills and gain work experience with a view to entering sustained employment.

We are also committed to helping young people in Wales into employment and have a number of initiatives in place to support this.  Our Jobs Growth Wales programme has just created it’s 4,000 job opportunity and our Traineeships programme for young people aged 16-18 is providing young people with the skills needed to get a job or progress to further learning at a higher level, such as an apprenticeship or further education.  I also recently announced £5million for additional apprenticeship places for newly recruited young people aged 16-24.  All of these programmes and more will help to address the findings raised in both the Working Futures 2010-202:  Summary Report for Wales and the Employer Skills Survey 2011:  Wales National Report.

Both reports can be found at www.ukces.org.uk/publications and more information from the LMI Project team on LMI@wales.gsi.gov.uk.