| Issue 18 | February 2010 |
Research and policy e-bulletin covering employment and skills issues, from the UK Commission for Employment and Skills.
The focus of this e-bulletin from the UK Commission for Employment and Skills is on employment and skills issues from research and policy perspectives. For further information on the research and policy activities of the Commission please click here.
In this edition's "spotlight feature" we examine a new report published by the UK Commission for Employment and Skills on 'The Economic Value of Intermediate Vocational Education and Qualifications'.
Content
this month includes (click to follow)...
Employment
High Growth Firms and their Contribution to Employment
Review of Creative Workers and the Creative Economy in Scotland
Job Quality in Britain
Workplaces and the Quality of Employment
The Impacts of Migrant Workers in Northern Ireland
Ideas for Making Welfare Work
Low Carbon Jobs in an Inter-Connected World
Building Britain’s Recovery: Achieving Full Employment
The Employment Crisis in Europe
Review of New Deal 25+ in Northern Ireland
Skills
Impact of Train to Gain
Adult Basic Skills and Workplace Learning
Adult Literacy and Numeracy in Northern Ireland and Scotland
Education, Mobility and Rural Business Development
The Demand for Recent Graduates from SMEs
Skills for the Transition to a Low Carbon Economy
Preparing Young People for the Opportunities of a Reviving Economy
Higher Education Strategy and Plan for Wales
Digest of Latest Data and Statistical Releases
ONS – National and Regional Monthly Labour Market Statistics
| Employment |
Research and Evaluation
High Growth Firms and their Contribution to Employment
A recent report from the National Endowment for Science, Technology and the Arts (NESTA) states that a small number of high growth businesses are responsible for most of the UK’s job creation. In what is claimed to be the first comprehensive study of business growth rates in the UK, NESTA business registry information from 1998 to 2008 was analysed, giving particular attention to firms’ direct contribution to the growth of employment. It found that 11,530 high-growth firms were responsible for 1.3 million new jobs, from an overall increase of 2.4 million between 2005 and 2008.
Those firms that are defined as demonstrating high growth are those that have achieved an average annual employment growth of more than 20 per cent over three years (starting with a minimum of 10 employees). The report suggests that policies targeting these firms specifically are likely to be more efficient than general support for small and medium sized enterprises. It also calls for a focus on ‘quality rather than quantity’ in encouraging business start-ups.
Full details here
Review of Creative Workers and the Creative Economy in Scotland
A paper from Scottish Government Social Research provides analysis of Scotland’s creative industries with the primary goal of gaining a better understanding of those working in the sector. It notes that the Scottish Government has identified creative industries as one of six key sectors because of its potential to contribute to sustainable economic growth. The paper observes that there are difficulties in classifying creative industries and uses a UK Department of Culture, Media and Sport definition from 1998 as a starting point. This identified creative industries as having an ‘origin in individual creativity, skill and talent’ and a ‘potential for wealth and job creation through the generation and exploitation of intellectual property’. It states that official statistical methods that use Standard Industrial Classification (SIC) codes provide a limited definition of the creative economy. This is because they do not take account of creative workers operating in ‘non-creative’ industries. Furthermore, there are workers in creative industries that do not have creative roles. There is thus potential for the estimated size of the creative economy to be distorted. Therefore, the Scottish Government Social Research approach is to use occupational classifications of employment.
The analysis highlights the non-traditional nature of the creative economy with a large amount of small businesses, self employment, informal hiring and project based work. Employment growth in the creative industry is driven by new start-ups, but there is a problem with growth in the medium term often being slow. This is due, suggests the review, to issues relating to strategic development, business planning and financial management, which are linked to the fact that creative entrepreneurs often see their enterprises as ‘lifestyle businesses’. It is argued that policy interventions in the creative economy should reflect the diverse requirements and practices of creative workers and the need to encourage the longer term growth of small creative businesses. The paper also reports that there is evidence of skills gaps, particularly in relation to soft skills as well as commercial and financial skills.
Full details here
The meaning of good quality work is the subject of the first edition of Praxis, a new occasional series of policy think pieces from the UK Commission, which aims to challenge, inspire and stimulate discussion and debate. In this article, Professor Green sets the vision of ‘more and better jobs’ against the very real obstacles of work intensity and a lack of autonomy. He discusses possible options for policy makers considering ways of improving job quality. In doing this, he focuses on three ongoing issues – skills, autonomy and effort.
The UK government’s aspiration of a more highly skilled workforce in 2020 is considered to be positive for job quality with the caveat that it will be important to ensure that skills demand meets skills supply. The problem of lack of autonomy in many workplaces could be difficult to solve with government interventions due to the private nature of job design, but Professor Green suggests that the UK Government could set an example by empowering public sector employees through increased trust and control in their jobs and therefore encouraging greater innovation and productivity. Finally, he argues that enhanced job quality as a result of greater autonomy and a more highly skilled workforce could be hampered by possible work overload. To counter this problem, Professor Green proposes that work practices are designed and managers are trained to encourage greater efficiency rather than simply pushing for more work effort.
Full details here
Workplaces and the Quality of Employment
An occasional paper written for the Department for Business, Innovation and Skills (BIS) by Mark T. Williams of Nuffield College, Oxford, explores the impact of workplace characteristics on aspects of employment quality. Using data from the 2004 Workplace Employment Relations Survey, the workplace was examined as a factor in job satisfaction, stress, the degree of discretion at work and perceived job security. The paper finds that the workplace does have a mediating factor in determining the quality of employment, particularly with regards to elements such as High Involvement Management (HIM) task practices, working in a single establishment and workplace size. In relation to each aspect of employment quality, the research found that:
- Job satisfaction was higher in workplaces based in single establishments, but lower the larger the workplace. HIM task practices were positively associated with job satisfaction
- Public sector employees were reported to have higher levels of discretion than private sector employees. The financial services and transport industries were found to have low discretion levels and hotels and restaurant, education and health industries had higher discretion levels
- Stress is less well predicted by workplace characteristics, possibly because individual-level factors are more significant.
Full details here
The Impacts of Migrant Workers in Northern Ireland
A significant positive contribution has been made to the economy in Northern Ireland by migrant workers in recent years. This is one of the main findings of research led by Oxford Economics for the Department for Employment and Learning in Northern Ireland (DELNI). The findings are based on a synthesis of available evidence from the Northern Ireland Labour Force Survey, a survey of employers by Perceptive Insight Market Research, a quantitative economic impact analysis, plus stakeholder consultations and a review of academic literature. This found that migrant workers were found to be useful in filling labour shortages and providing a strong work ethic during a ‘golden era’ for Northern Ireland’s economy.
The research report estimates that up to 41,000 people born outside the UK and Republic of Ireland were in employment in Northern Ireland in 2008, with many working in the hospitality and manufacturing sectors. This amounts to around 5 per cent of the regional workforce, which is a relatively small figure in comparison to, for example, the UK (11 per cent), the Republic of Ireland (15 per cent) and the United States (17 per cent). The report also notes the difficulties of calculating numbers of migrant workers, especially as some that have lived in the country for a number of years may no longer be considered to be migrants. However, the overall contribution of migrant workers in 2008 could have been as much as £1.7 billion gross value added for the economy of Northern Ireland. Furthermore, one third of employers that were surveyed for the research claimed that migrants had helped their organisation to survive in recent years.
The report anticipates that the onset of the recession will have changed this situation with a fall in the number of migrants working in Northern Ireland and the UK in general.There are also concerns that fewer jobs being available could create more competition between migrants and native workers. The report highlights issues of shortages in middle-tier supervisory occupations due to high labour turnover as a result of the temporary nature of migrants’ employment. This could also have an impact on training in that migrants could be used to fill short-term labour shortages rather than providing training for the existing workforce.
Two other reports have been published by DELNI on migrant workers, one on the experiences of migrant workers in Northern Ireland and the other on attitudes towards migrant workers. These found that migrant workers tend to move to Northern Ireland for mostly economic reasons and less than one in five plans to stay permanently. In addition, a broadly positive attitude to migrant workers was found among the general public of Northern Ireland.
The report on the impacts of migrant workers can be found here, the report on the experiences of migrant workers can be found here and the report on attitudes can be found here
Policy Analysis
The Confederation for British Industry (CBI) has published a report that outlines its ideas for reforming the welfare system in the UK in the context of recession and rising unemployment.The central point of the report, Joined Up, Moving Up, is that services should be joined up and tailored towards individual needs. It is observed that the legacy of previous recessions has been increased long-term unemployment and the CBI argue that continuing to target the hardest-to-help is the way to avoid this happening again. Addressing the multiple barriers to employment that are experienced by the hardest-to-help requires linking and personalising services and also cutting out the duplications, inconsistencies and inefficiencies of the current system. The report suggests that the outcomes-based prime contractor model of the Flexible New Deal presents an opportunity to join up a wider range of services. The CBI also recommends that:
- A minister in the Cabinet Office is assigned responsibility for a joined-up approach to service planning
- Individual budgets are extended to be spent in conjunction with a lead professional
- More information sharing on employment markets and unemployment takes place between public, private and voluntary sector partners.
Full details here
Low Carbon Jobs in an Inter-Connected World
A paper that addresses the emerging debate about the growth of ‘low-carbon’ jobs has been published by the Global Climate Network (GCN). A coalition of think tanks from around the world, the aim of the GCN is to connect human, economic and environmental wellbeing.
The paper presents a review of government policies and progress in relation to low-carbon job creation, in GCN member countries. The report provides estimates of the number of jobs that could be created in low carbon industries between now and 2020.
The UK is one of the countries featured in the report and it is estimated that up to 70,000 jobs could be created by 2020 if the country is successful in attracting manufacturers and suppliers. It is observed that the UK is not a worldwide leader in low-carbon industries, although offshore wind is noted as a major resource and financial and legal services in relation to this industry is a possible growth area.
The report concludes by making recommendations for ways that government policies in member countries can drive job creation. These are:
- To develop national low carbon industrial strategies with a coherent approach to subsidies, targets, regulation and taxes
- To pull all available financial levers, including tax incentives and effective regulation of the low-carbon capital market
- To identify skills gaps and develop a training strategy
- To identify likely job losses and ensure these are minimised by retraining staff and helping businesses to be better oriented towards greater efficiency.
Full details here
Building Britain’s Recovery: Achieving Full Employment
The UK Government has published a White Paper aimed at achieving its full employment aim of 80 per cent of working age people being in employment. It states the goal of getting over one million more people into work over the next five years, which the Government claims is greater than the fall that has been seen during the recession. Tackling the effects of the recession is part of the strategy for achieving this, as is targeting young people and the reform of welfare.
The approach to economic recovery includes helping unemployed people into work by using Government procurement and greater partnership working between Jobcentre Plus, local authorities, and other local partners. There are also plans to provide more support and financial assistance to unemployed people who want to start their own business. For young people there is a series of measures such as a subsidy for employers taking on 16-17 year-old apprentices and offers of internships for unemployed graduates after six months. There is also a Young Person’s Guarantee for 18-24 year-olds that they will be offered training or employment if they are still unemployed after six months.
Among the plans for the reform of the welfare system is a review of Pathways to Work and increased health support for those on Jobseekers Allowance. In addition, measures to encourage people back into work include a £40 per week ‘better off in work’ credit and ensuring that the benefits system encourages lone parents to try working for a few hours per week. The White Paper concludes by outlining a series of measures for Jobcentre Plus, including offering advisors accreditation for their advisory skills, a substantial increase in outreach services and testing approaches in which private and voluntary sector contractors provide people claiming different benefits the help they need to get back into work.
Two other documents have been published by the UK Government that accompany the White Paper. Investing in Potential outlines the strategy for increasing the proportion of 16-24 year-olds in education, employment and training. The measures that make up this strategy include:
- The September Guarantee which offers every 16 and 17 year old a suitable place in learning
- A 14-19 reform programme aimed at providing all young people with learning opportunities that are suited to their needs and interests
- Creating 35,000 more Apprenticeship places
- Financial support for 16-18 year olds amounting to £650 million in 2009-10
- Fast track entry to support for 18 year old job seekers who have not been in education, employment or training for six months.
Learning from the Past: Tackling Worklessness and the Social Impacts of Recession is another Government document published in association with the White Paper. It focuses on lessons to be learned from past recessions and also suggests some practical steps that local areas can take in responding to worklessness. This includes using a ‘Total Place’ approach to public service delivery which has already been pioneered in 13 local areas in the UK. This consists of an integrated local strategy with the following elements:
- Local worklessness assessments that identify and tackle social barriers to employment
- Identifying potential efficiencies by mapping the public spending of local agencies
- Greater collaboration between Jobcentre Plus, employers, skills providers and also registered social landlords, Primary Care Trusts, third sector organisations and local authorities
- Work and skills plans used to set out integrated local responses with clear accountability.
Building Britain’s Recovery is available here, Investing in Potential is available here and Learning from the Past is available here
The Employment Crisis in Europe
A European Commission working document looks at trends in European Union (EU) labour markets since the onset of the recession. It also describes policy responses to the crisis and identifies the key actions required to counter its negative effects. It observes that while some countries have experienced poor labour market performance during 2009, the overall rise in unemployment has been less than may have been feared considering the strength of the recession. A comparison is made between the 2.1 percentage points rise in unemployment in the EU and the 3.6 percentage points rise in the United States.
Temporary work is described as being most affected by job losses and the most affected groups in the EU are young people, low skilled people and migrants with low qualifications. The document states that the full impact of the economic crisis on labour markets is still to be faced, with unemployment expected to rise to around 10.3 per cent during 2010, 3 percentage points higher than 2008 levels.
The policy responses of the EU and its member states have included fiscal stimulus packages and massive budget consolidation programmes. Member states agreed on employment measures focusing on three priorities:
- Maintaining employment, creating jobs and promoting flexible labour markets
- Upgrading skills and matching labour market needs
- Increasing access to employment and supporting households.
In addition, the document describes other measures such as the increased use of financial and training support for employers and employees experiencing reductions in working hours, income support for the most vulnerable citizens and active inclusion measures for those furthest from the labour market. The working document proposes five key actions for 2010 and beyond to enable a sustained returned to employment growth. These are:
- Labour market measures to avoid long-term unemployment, aimed at reaching out to the most disadvantaged and offers of skills upgrading and retraining for unemployed people
- Helping businesses to create new jobs with assistance for new entrepreneurs, access to finance and incentives for companies to offer apprenticeships
- Economically sound and sustainable flexible working arrangements that are combined with training opportunities
- Stepping up support for young people and those most affected by the crisis, including economic incentives to make work more attractive, in-work benefits, targeted reductions of non-wage labour costs and other subsidies
- Improvements to the situation of people on non-standard contracts, making employment more secure and legislation that provides adequate rights and obligations for employees and employers.
Full details here
Review of New Deal 25+ in Northern Ireland
The Public Accounts Committee of the Northern Ireland Assembly has published a report on the review of New Deal 25+. The welfare to work programme which was aimed at long-term unemployed adults over the age of 25 was replaced in September 2008 by Steps to Work and the Committee’s aim is to identify lessons to be learned for the new programme. The report is generally critical of New Deal 25+, stating that the overall employment impact of the programme was very limited and often short-lived, with only 18 per cent of leavers finding a job. The Committee states that the Department for Employment and Learning (DELNI) could have done more to prevent this disappointing outcome, claiming that it reacted slowly to problems such as repeat participants and failed to address specific barriers to employment faced by individual participants. In order to achieve better employment outcomes under Steps to Work, the Committee makes the following recommendations:
- A progressive annual increase in employment outcomes to be an objective for Steps to Work
- Research conducted that assesses the net economic impact and the actual employment impact of Steps to Work
- DELNI to use a fully comprehensive and consistent set of performance measures that are reported regularly
- Job outcomes to be measured more frequently
- A review of procedures on promoting the uptake of relevant essential skills training for all those participants that need it
- A more rigorous approach in managing the organisations that provide participants with work experience and training
- Methods to be considered for countering the negative perceptions among employers about people who are long-term unemployed.
Full details here
| Skills |
Research and Evaluation
The Office for Standards in Education, Children’s Services and Skills (Ofsted) has published the findings of a follow-up review to the 2007/8 survey of Train to Gain provision. Inspectors undertook further analysis of 40 of the original inspections to determine whether the findings of the 2008 survey had been maintained. It found that Train to Gain is continuing to improve the knowledge, understanding, motivation and self esteem of employees and improvements have been made in the development of employees’ technical and practical skills.
Skills for Life training, which includes support for the development of employees’ skills in language, literacy and numeracy, was one of the areas identified as still needing improvement. Only 13 of the 40 providers offering Skills for Life provision that led to some form of qualification. Another issue was a lack of opportunities to train at a higher level after initial awards had been completed. The time it takes to complete a programme was also identified as an issue in the review with an insufficient number of employees gaining their qualifications before the planned end date.
Ofsted’s report makes some recommendations for agencies, providers and the Department for Business, Innovation and Skills (BIS) for improving Train to Gain provision. These include:
- BIS to work on increasing the quality and uptake of Skills for Life provision
- BIS to review the role of the skills brokerage service in delivering Train to Gain
- BIS to prioritise the sectors that are in most need of publicly funded training
- The Learning and Skills Council (LSC) (and its successors) to continue to strive to help those who have been made redundant to continue their studies when they return to employment
- The Learning and Skills Improvement Service (LSIS) to provide guidance and disseminating good practice on assessing employees’ needs and the use of individual learning plans
- Providers to extend the offer of Level 3 training and qualifications.
Full details here
Adult Basic Skills and Workplace Learning
The findings of research supported by the Economic and Social Research Council (ESRC) have been published that analyse the impact of workplace ‘Skills for Life’ programmes. The research, conducted by Professor Alison Wolf of King’s College, London, involved longitudinal analysis of the progress and attitudes of learners undertaking literacy and IT courses. Having set out to ascertain whether workplace programmes can make big changes to basic skills and other life course variables, the study found that although there was only a small measurable impact on skills, participants’ learning-related behaviour was affected.
The motivation for participating on skills for life courses was surveyed and this found that the desire among participants to increase earnings or chances for promotion were far less than the desire to develop new skills or do their jobs better. Furthermore, the research found that employers reasons for sponsoring basic skills courses were not necessarily due to skills gaps, but because of interests in improving staff confidence and morale. It is suggested that these findings contradict the theory behind policies that assume the prospect of increased earnings will bolster motivation to learn.
Full details here (to access the report, please scroll down to the bottom of the page and click on the link to the ‘Attached file’)
Adult Literacy and Numeracy in Northern Ireland and Scotland
The Northern Ireland Audit Office (NIAO) has published a report that analyses the situation regarding adult basic skills in the region and makes recommendations for future action. Estimates have been made that around 1 in 4 (or 250,000) people of working age in Northern Ireland have levels of literacy and numeracy below those expected of school leavers. These estimates were made by an International Adult Literacy Survey in 1996 and no measurement has taken place in Northern Ireland since then. However, the Department of Education in Northern Ireland has reported that around 4000 young people are leaving school with deficient basic skills.
The NIAO were commissioned by the Northern Ireland Department for Employment and Learning (DELNI) to add to this limited knowledge of basic skills using data from a range of sources and analysis of current policy interventions. The report describes the Essential Skills for Living strategy, launched in 2002, as a radical new approach to literacy and numeracy and states that between by July 2009 over 54,000 people had enrolled in Essential Skills courses, with more than 34,000 achieving at least one recognised qualification. The programme’s evaluation was published in 2006 and was generally positive, but highlighted the need for more impact with employers and the hardest-to-reach groups. NIAO’s recommendations include:
- DELNI to consider ways of maintaining an up-to-date measurement of the standard of literacy and numeracy in Northern Ireland
- A clearer and more accurate assessment of Essential Skills needs at a local level
- The evaluation of a recent DELNI advertising campaign that encourages adults to learn
- The provision of Essential Skills in further education (FE) colleges to be monitored in the context of changes to FE and an expected increase in participation levels
- DELNI to persuade more local employers to allow their employees access to Essential Skills courses.
Basic skills is also the subject of a report from the Literacy Commission in which it sets out a vision of zero tolerance of illiteracy in Scotland. It is suggested that as many as one million adults in Scotland may not have adequate literacy skills and 18.5 per cent of children leave primary school without being functionally literate. The report goes on to briefly discuss the impact of poor literacy on areas of life such as economic status, health and civic engagement, and then tackles the problem of defining literacy. Socio-economic disadvantage is described as the major cause of poor literacy and the report notes the high levels of poor literacy among the 50-65 age group to show that there has never been a ‘golden age’ of literacy.
The report also covers issues such as the link between poor literacy and English as an Additional Language (EAL) and the role of testing for certification and diagnosis. Examples of action in school projects are used to highlight four features of successful literacy schemes, which are: national leadership; starting formal literacy programmes early; careful monitoring of teaching and continuous professional development; and intensive intervention strategies. Finally the Literacy Commission makes a series of recommendations which includes:
- A formal commitment by Scotland as a nation to zero tolerance of illiteracy
- Local authorities to share best practice in multi-agency strategies that meet the needs of children in their care
- A focus on early years to address the negative effects of socio-economic disadvantage on learning.
The Northern Ireland report is available here and Vision for Scotland is available here
Education, Mobility and Rural Business Development
A recent article in the Journal of Small Business and Enterprise Development discusses rural economies within the context of inward migration. In particular, it looks at the introduction of new human and social capital to rural areas, when individuals move into rural areas to establish small business activity. The research, conducted by Gary Bosworth of the University of Lincoln, involved qualitative interviews with rural business owners in the North East of England.
The findings highlight the diversity of skills and networks among rural business owners. The article suggests that the trend of rural ‘in-migrants’ to some extent compensates for concerns relating to the loss of educated young people from rural communities, arguing that it can help to foster a culture of enterprise for the benefit of other local business activity. The growth of rural businesses and the wider range of activities that are encompassed are anticipated as potential causes of an increased demand for higher level skills, which may in turn provide more opportunities for young people in rural areas.
The full reference of the article is: Bosworth, G. (2009) ‘Education, mobility and rural business development’, Journal of Small Business and Enterprise Development, 16(4), pp.660-677.
The Demand for Recent Graduates from SMEs
Research and consultancy specialist CFE has published a report that looks at the demand for recent graduates from small and medium sized enterprises (SMEs). It highlights the difficulties that many SMEs have in understanding the complexities of the education and skills landscape and the diversity of graduates that it produces. It is argued in the report that policies aimed at encouraging greater demand for graduates must be based on an understanding of what a graduate is.
CFE’s research, which was based on a survey of 502 SMEs in the East Midlands, found that 11 per cent had recruited a recent graduate in the previous year (up to August 2009) and that 12 per cent planned to do so in the following 12 months. It also found that the primary reason for not recruiting recent graduates was lack of demand, rather than inadequate or unsuitable supply which CFE suggests could limit the impact of attempts to increase the employability skills of graduates.
Full details here
Policy Analysis
Skills for the Transition to a Low Carbon Economy
A key recommendation of a report from the Aldersgate Group is that all major environmental policies should be accompanied by a corresponding skills strategy. The organisation consists of a coalition of businesses, environmental groups and individuals who are committed to high environmental standards for future economic growth. The report calls for accelerated industrial intervention by government in the UK in order to fill the gap in skills required to make a transition to a low carbon economy. It is suggested that future skills strategies should be developed in line with environmental legislation. Other recommendations for government action in the report are:
- Providing investment to develop core technical skills in targeted sectors
- Making the skills delivery system fit for purpose so that all sectors of the economy can develop skills in generic issues such as resource efficiency, energy efficiency and dematerialisation of products
- Driving demand for environmental skills through funding programmes that help to alter long-term business practices
- Reforming the government’s communication strategy by re-defining what is meant by a ‘green job’ and engaging with the workforce on the implications of the shift to low carbon.
Full details here
Preparing Young People for the Opportunities of a Reviving Economy
A recent paper from the Association of Learning Providers (ALP) suggests ways of addressing what it describes as the significant challenges currently facing the further education system. These challenges relate to the raising of the age of compulsory participation in education and training, rising unemployment as a result of the recession, changes to the machinery of government and the potential for further change as a result of a General Election in 2010. The paper calls for all young people to be given truly independent and impartial careers advice and guidance, so that they can make their own judgement about whether they are interested in the vocational route.
The paper also discusses making practical ‘pre-Apprenticeship’ opportunities available in order to create potential employment for young people in the upturn and suggests that an equivalent to the ‘work for your benefit’ programme could be introduced for 16-18 year-olds. The ALP also proposes that colleges provide pre-Apprenticeship and Apprenticeship opportunities, stating that independent providers and colleges need to work more closely together to better use the strengths of each type of organisation. Finally, the paper advocates a better understanding of the costs of various routes followed by young people after the age of 16 so that meaningful comparisons and evaluations can be made.
Full details here
Higher Education Strategy and Plan for Wales
The Welsh Assembly Government has published For Our Future: the 21st Century Higher Education Strategy and Plan for Wales. This builds upon and replaces the previous plan, Reaching Higher and provides a response to the Jones review of Higher Education (HE) in Wales. It sets out the Welsh Assembly Government’s vision for the HE community of transforming lives and livelihoods across Wales and includes a list of expectations that need to be met in order to achieve this. These include maximising participation by offering different ways to experience HE, addressing inconsistencies in access and opportunity and improving part-time learning opportunities. The plan also states the Welsh Assembly Government’s aim of a greater proportion of the population achieving higher level skills and describes employability as a key outcome of the HE experience.
A list of challenges faced by HE in Wales is presented that includes the ageing of the student base (more people over the age of 25 and fewer younger people), the need to develop high level skills in science, technology, engineering and mathematics and the greater expectation being placed on HE by individuals, employers and governments. In order to meet these expectations and respond to these challenges the plan sets out actions to be delivered as part of a new national higher education system for Wales. These actions include:
- Developing a regional dimension to planning and delivery that encourages collaboration to ensure that local needs are better identified and met across Wales
- Developing more flexibility in programme design to match need and demand, including a stronger focus on shorter accredited programmes
- Increasing the number of programmes that can be studied in the Welsh language
- Targeting financial support to promote access to HE, including a new national bursary and scholarship framework to be announced in Spring 2010
- Strengthening the contribution of HE to workforce development with a more systematic, transparent and consistent approach to the relationship between HE and the business community.
Full details here
| Digest Of Latest Data and Statistical Releases |
ONS – National and Regional Monthly Labour Market Statistics
The regional monthly Labour Market Statistics data tables are published by the Office for National Statistics (ONS) in the form of ‘zip’ files which then open up as separate regional excel spreadsheets.
Within those spreadsheets are data on employment; unemployment; economic activity and inactivity; and vacancy data. The regional data now includes information by local authorities, parliamentary constituencies and travel to work areas.
Latest official statistics show that the number of unemployed people has fallen, the unemployment rate has stayed the same and the claimant count has increased. The unemployment rate was 7.8%, the same as the previous quarter. Meanwhile the number of notified vacancies has increased on the previous quarter at 479,000. Growth in average earnings, excluding bonuses, was up 1.2 percentage points and growth in average earnings, including bonuses, was up 0.8 percentage points.
All the data, including that at national level and from previous months, is all available via a single link, which can be found here
| Spotlight Feature |
The Intelligence briefing contains a topical “spotlight” feature, where we focus on a key issue relating to the work of the UK Commission for Employment and Skills and its partner organisations. This month we look at a new report published by the UK Commission for Employment and Skills on ‘The Economic Value of Intermediate Vocational Education and Qualifications’.
Introduction
A new report from the UK Commission for Employment and Skills in partnership with the Department for Business Innovation and Skills, reviews the most recent available evidence on the economic value of intermediate vocational qualifications, looking at the private wage returns (and briefly the improved likelihood of being in employment) associated with such qualifications. The question that the review sought to answer was:
What is the economic value of acquiring intermediate vocational qualifications to a particular individual, on average? That is, by how much will his or her wages increase following the acquisition of such a qualification?
This value could differ, according to whether the new qualification acquired is the individual’s new highest qualification and so takes them to a higher level of attainment than they had previously reached, or whether the individual already held qualifications at the same, or even at a higher level than the new qualification acquired. This differentiation is important when considering vocational qualifications, since they can often be acquired at a level equal to or below an individual’s existing highest academic qualification.
Headline Results
When individuals acquire an NVQ2 qualification as their new highest qualification, the most recent evidence suggests that they earn around 4% more than individuals with no qualifications. The wage gap is around 2% compared to low qualified individuals (individuals with at best Level 1 academic qualifications and at best Level 2 vocational qualifications).
Other Level 2 vocational qualifications have larger returns when held as highest qualifications, relative to the same specific control groups, ranging from around 7% for City and Guilds Craft qualifications up to 20% for RSA Level 2. At Level 3, all vocational qualifications receive positive and statistically significant returns when held as highest qualifications relative to specific control groups, ranging from 11% for NVQ3 up to 25% for ONC/OND, with the others in the range of 16-18%.
The report speculates that the difference in returns across types of vocational qualification is caused by differences in the type of training offered and differences in the unobserved characteristics of the individuals acquiring them (for instance motivation, ability, work ethic and experience).
Some studies estimate the returns to intermediate vocational qualifications separately according to whether they are obtained through employers at work, at a college, or as part of government training. The available evidence shows that obtaining a vocational qualification through one’s employer is the most valuable acquisition route. An individual with an NVQ2 held as a highest qualification and obtained through work earns on average around 10% more than an individual with no or low level qualifications. No other route is associated with positive and statistically significant returns, with the exception of the college route for females only (9%).
It is possible to obtain separate estimates of returns to qualifications for low and high ability individuals, using childhood test scores as a measure of ability. The available evidence is not strong, but suggests that low ability individuals obtain higher returns to intermediate vocational qualifications than those of higher ability.
The evidence shows that, compared to individuals with no or only low level qualifications working in the same occupation, individuals acquiring an NVQ2 as their highest qualification earn positive and statistically significant returns in some occupations, namely skilled occupations (8% return), personal services (5%), sales (3%), machine operatives (4%) and elementary occupations (4%). Similarly, certain industries see positive and statistically significant returns to NVQ2 in the same circumstances (held as highest qualification, relative to a specific control group), such as construction (9% return), public administration, education and health (3%) and other services (7%).
Apprenticeships have been shown in the literature to be an effective means of supplying vocational education, with positive and statistically significant returns observed. Traditionally, such good returns have been observed for males only, but more recent evidence, looking at apprenticeships completed since their reintroduction in the form of Modern Apprenticeships, has found evidence of positive and statistically significant returns for females as well, at Level 3.
Cost benefit analysis taking into account the costs to government, employers and individuals of providing or undertaking an apprenticeship show apprenticeships are a more cost-effective means of providing vocational learning than other intermediate vocational qualifications.
Conclusions
This review concludes that, although on average individuals with intermediate vocational qualifications earn less than all individuals without intermediate vocational qualification (the latter group may include those holding academic qualifications), such comparisons are affected by two factors:
- Firstly the unobserved characteristics of the individuals being compared. Those who hold intermediate vocational may, on average, have lower levels of motivation, ability, work ethic and experience than all other individuals
- Secondly, the nature of the jobs that they do. For example in some sectors or occupations intermediate vocational qualifications may accredit skills and abilities already held by the individual. In such circumstances the acquisition of an intermediate qualification may not lead to a boost in wages. Also, individuals who acquire intermediate vocational qualifications, particularly NVQ2s, often already work in low-paying jobs.
However, returns vary across sectors and occupations with intermediate vocational qualifications being more successful in some sectors than in others and more valuable in some occupations than others. The more positive sector and occupational specific results in the report derived from comparing similar individuals with and without intermediate vocational qualifications in the same occupation or sector show the importance of estimating returns in this way. Such an approach helps to control for the unobserved characteristics of the individuals being compared and the nature of the jobs that they do. As such the report finds that intermediate vocational qualifications, including those at NVQ Level 2, can provide wage benefits to their holders.
Future Research
Besides the importance of estimating sector and occupation specific wage returns, the report has several related implications for further research.
The most positive returns to NVQs are reported by the most recent evidence so it is possible that the economic returns to NVQs are rising over time. Therefore, it would seem that further longitudinal evidence in the returns literature is required.
The minimum requirements for such data would be to include information on individuals’ wages, occupation, industry and qualifications at each point in time, though information on as many additional background characteristics as possible would, of course, be useful.
Information on qualifications held at each point in time would help identify situations in which a qualification is acquired as the individuals’ new highest qualification, or whether they already hold qualifications at that or indeed at a higher level. The wage data could then be used to identify the wage change that occurs following qualification acquisition in each of these circumstances. There is also of course the additional advantage of longitudinal evidence that any unobserved characteristics that remain constant over time would not bias the results as the same individual is being tracked over time.
The Economic Value of Intermediate Vocational Education and Qualifications is available here
'Intelligence’, the employment and skills research and policy e-bulletin, is produced in association with the Policy Research Institute at Leeds Metropolitan University.
