South West Regional Skills Enterprise and Employment Analysis 2007/2008

Final Report

6.3 Unemployment

The South West has the lowest rate of unemployment of any region in England. Long-term unemployment for +6 months and +12 months is also low in the South West compared with other regions and, consequently, considerably below the national average (5.5%). Despite this, unemployment rates have been gradually increasing from 3% at the beginning of 2004 to 3.8% second quartile, 2006.

The regional rate of increase, although starting from a lower base, is slower than the national average. This suggests that both the regional labour force is better able to absorb the increase in population through the creation of additional employment opportunities and that the industrial structure was relatively insulated from global redundancy pressures.

Despite this, as would be expected with a region as diverse as the South West, significant geographical disparities can be seen within the region in terms of employment and unemployment for example. The highest rates of employment tend to be located towards the north and east of the region whereas the far west has lower levels of employment and higher levels of unemployment.

Unemployment also varies significantly according to age group with the highest rates being experienced by the youngest age group (16 to 19). Just over 11% of this age group within the region are unemployed. Thus unemployment is most significantly focused on the younger age group.

Figure 21: Rate of unemployment by region, 2004 (click image to open in new window)

Source: ONS, Nomis data service, 2006

A certain level of unemployment is necessary to ensure the flexible working of the labour market. In terms of the functioning of the labour market, a greater challenge is the nature of long-term unemployment. Long-term unemployment is much more problematic; for the individuals concerned, they tend to experience higher levels of deprivation whilst a return to the labour market is less likely as their employability skills deteriorate over time. The region recorded a long-term claimant count rate of 0.2%, half the rate of the national average (0.4%) in September 2006.

Sub-regionally, the pattern is for comparatively higher claimant rates in the urban areas such as Torbay, Plymouth and Bristol (above 2.5%) and lower rates in more rural areas such as Dorset and Wiltshire (1.0%). There may be more ‘hidden’ unemployment in rural areas. The highest long-term unemployment rates are recorded in urban areas such as Swindon and Plymouth (0.4%), where combined over 1,100 people were unemployed for over 12 months.

Unemployment increases the chances of social exclusion. This group tends to be less well qualified compared with those who are in some form of employment. So that this group can re-engage effectively in the labour market, up-skilling or re-skilling is important. Improving the skills of this group benefits the individual by improving the chances of being an active player in the workforce, but also the employers and the economy who utilise the skills by reducing the skills gap. The table below illustrates the link between skills levels and employment. It is clear that the higher the qualifications, the more likely it is that individuals are employed. The reverse is true, especially if individuals possess no formal qualifications.

Figure 22: Employment rate by qualification level, South West, 2005 (click image to open in new window)

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

Conclusion

There is significant variation in unemployment levels across the South West. Although it averages 3.3 per cent (in comparison with a national average of 4.9 per cent ), the range varies from 4.5 per cent in Bristol to 1.9 per cent in Bath & North East Somerset.

The diverse nature of unemployment requires a concerted area-based focus.