Skills in England 2001

Labour Market Trends, Jan 2002 by Campbell, Mike, Baldwin, Simon, Johnson, Steve, Chapman, Rachel, Et al

Two recent reports summarise the available evidence on the demand for, and supply of, skills in England.

Key points

* Industrial and occupational changes in the UK are leading to a growth in jobs requiring higher level skills and a decline in jobs requiring lower level skills.

* In addition there is an increased demand for skill types which cuts across sectors and occupations, including basic skills, generic skills (including verbal, numerical, planning and communication skills), IT skills and management skills.

* Those most likely to be poorly qualified include the unemployed, economically inactive, older individuals, those employed in manual occupations and some ethnic minority groups.

* A third of establishments with between one and four employees provide off-the-job training compared with almost all of those with 500 or more employees, and small employers are also less likely to provide training that leads to a qualification.

* Skill-shortage vacancies are predominantly concentrated in London, the South East, South West and East regions though the scale of variation across local learning and skills council areas is greater than across regions.

* Participation rates in job-related education and training are among the highest in the OECD (56 per cent of employed adults had participated in such training in the previous year compared with an OECD average of 34 per cent), although growth in qualification attainment is slower among young people in the UK ( 1995 figures).

Introduction

SKILLS IN England 2001: research report, provides a synthesis, review and assessment of the available evidence on the demand for, and supply of, skills in England. It also seeks to identify the main aspects of skill deficiencies and imbalances between skills demand and supply and to draw together the key findings from research as a basis for developing the skills agenda in the future. A second report, Skills in England 2001: key messages, draws out ten key messages from the review.

Skills have a crucial role to play in enhancing economic performance, and in stimulating social inclusion, especially if the evolving pattern of skills acquired can respond to the changing requirements of the labour market. These changes in the labour market have presented, and look set to continue to present, major challenges for public agencies, employers and individuals.

Demand for skills

Changes in occupational structure, in qualifications and in skills required vary by economic sector and geography. The overall pattern is for the `skill intensity' of employment to increase (especially in managerial, professional and associate professional occupations), for the qualifications held by people in jobs to continue to rise and for most jobs to need more training, and more training time than previously.

Employment growth is likely to be particularly concentrated in professional, associate professional and personal service occupations. However, it is also necessary to replace the existing skills that will be lost to different occupations through occupational mobility and retirements. The scale of this replacement skills demand substantially exceeds that of the demand created by growth of new jobs in the economy. For example, two and a half million new jobs are forecast by 2010, but there are forecast to be over 13 million job openings in total.

The increasing need for job specific, technical skills is paralleled by an increased demand for skill types that cuts across sectors and occupations, including basic skills, generic skills (including verbal, numerical, planning and communication skills), IT skills and management skills.

There are very substantial regional variations in the pattern of recent, current and expected future skill needs. It will be necessary to address the particular evolving skill needs in each region to seek to ensure that the volume and structure of skills supply is appropriate to changing labour market requirements.

Supply of skills

In recent years there has been considerable progress in raising educational attainment. For example, the proportion of the economically active population with qualifications at National Vocational Qualification (NVQ) level 4 or above has increased from 23 per cent in 1995 to 27 per cent in 2001. However, for young people, attainment among boys at level 2 is relatively low, as it is among some ethnic minority groups. There is also limited progression among females from NVQ level 2 or equivalent to level 3.

There are substantial variations in attainment levels across large sections of the workforce with, overall, more than one in four of the economically active still having no qualifications or qualifications below NVQ level 2 or equivalent. Those most likely to be poorly qualified include the unemployed, economically inactive, older individuals, those employed in manual occupations and some ethnic minority groups. The latter's qualification levels are of particular concern, not only for reasons of social inclusion, but because they will account for a significant proportion of future workforce growth. Poor basic skills in literacy and numeracy are also an important issue affecting at least one in five of the workforce.