South West Regional Skills Enterprise and Employment Analysis 2007/2008

Final Report

4.12 Skills supply

4.12.2 Skills Supply

The supply of skills is changing rapidly. The level of skill in the workforce has increased, participation in post-compulsory education compares favourably with that in other countries, and immigration has offset some potential labour shortages.

Much of the improvement over the last decade has been brought about by relatively rapid improvements in the qualifications held by young people flowing into the working age population, and older, less well-qualified people retiring. In particular, there has been a rapid expansion in HE, leading to a rise in the proportion of young people with at least a Level 4 qualification. In 2004, more than one quarter of the working age population was qualified to Level 4 or above, compared to less than one-fifth of the population in 1994. In 2004, only one third of the population held less than the equivalent of a Level 2 qualification, compared to more than 40% in 1994.

Figure 10: Highest qualification level of the economically active population, 2005, percentages (Click image to open in new window)

Source: Qualifications and Participation in Learning at a local level England 2005, DfES August 2006

Skills in England 2005 observes the following characteristics of the working age population in terms of the distribution of qualifications:

• The relatively high levels of people with no qualification who are unemployed;
• The strong age cohort effect, with older people being much more likely to have no qualifications;
• Women are much less likely to be qualified to Level 3;
• There is little difference between the qualifications profile of white and non-white populations respectively;
• People in higher-level occupations are more highly qualified, but a substantial proportion of people in managerial and professional occupations are qualified at Level 2 or lower.

The current pattern of qualification by age group is shown below.

Figure 11: Highest level of qualifications of working age adults in the South West, 2005, percentages (Click image to open in new window)

Source: LSC Strategic Analysis

Although we have classified this as the supply of skills, it too is a form of demand, or potential demand, from learners. The potential demand for the Level 2 entitlement remains high. In the South West, there are about 892,000 adults of working age who are qualified below Level 2. In the last five years, there has been a 3.5% decrease in the proportion of adults who are not qualified to Level 2.

Across the economically active population, the largest ‘demand’ for Level 2 amongst the adult population is in the 35-64 age groups(52) with the largest proportions being in the 55-64 age group (albeit this is the group which is less likely to engage in learning and is nearing retirement).

White, unskilled males with GCSEs below C make up a significant group of those who do not hold Level 2 qualifications. In policy terms, this group may pose different challenges. The school curriculum has failed this group and it is clear that many of them are not attracted to re-enter any form of learning once they have left compulsory education; memories of poor school experiences may still be fresh and an offer of a continuing entitlement to a Level 2 qualification may not be sufficient to attract them back to learning, particularly if they see it as being ‘more of the same’. This may have implications for the design and delivery of vocational qualifications at Level 2 and below.

Not all people without five+ GCSEs at A*-C are without a Level 2 qualification. Of those without five GCSEs, men are more likely than women to have other Level 2 qualifications. Those from higher social classes are also more likely to have other Level 2 qualifications than those from lower social classes. For those aged 18 or above, the ‘jump effect’ is significant, where the probability of participating in Level 3+ is higher than the probability of participating in Level 2. Around 36% of those without a Level 2 who contribute towards the target between 2001 and 2010, attain at Level 3 rather than at Level 2.

The changes in the qualifications profile of the region are largely driven by three factors: the qualifications of the young people who enter the working age population, the qualifications of those who retire and the qualifications acquired by those within the population.

The Leitch Interim Report anticipates that on the basis of current targets, the projections suggest a steady improvement in the qualifications held by the working age population. In particular, there is likely to be a marked decrease in the proportion with no qualifications, and significant increases in the proportion of individuals with a qualification at Level 4 or above.

There is likely to be little change in the overall proportion of the population with a Level 2 or 3 qualification. This is due primarily to the high rates of progression from these qualifications to Level 4 and above amongst younger groups, for example from A’ levels to a degree.

However, there will still be significant numbers in the workforce with very low levels of qualifications.

Leitch indicates that it is important to note that, as the UK moves towards an ever more highly-skilled economy, some of these trends will become harder to maintain. For example, in many areas it will be a significant achievement even to maintain recent underlying trends, and a significant challenge to meet current PSA targets. The model does not disaggregate the projections to a lower level than that of the UK. The South West region, for example, demonstrates a high proportion of working age people at Level 4 or above, higher than the rest of the UK, so the trajectory implied at an aggregated UK level may not be replicable within this region.

(52) Sample sizes for the 16-19 age group are too small so are not deemed to be robust. Moreover, the suggested proportion not qualified to Level 2 does not correspond to the matched administrative data set that indicates that 74 per cent of 19 year olds are qualified to Level 2.