Skills Cardiff City Region

Skills and the Cardiff City Region

Working population trends torfaen

The vale of glamorgan

unemployment Wales

employment structure

Skills and Qualifications highest number of graduates Blaenau Gwent RCT

CCR skills base

Bridgend

Newport

inward investment socio-economic data Caerphilly

Monmouthshire

economic background

skilled workers cardiff Merthyr Tydfil

2

Skills and the Cardiff City Region

summary Modern developed nations need a mix of skills in order for their economies to function efficiently. All of the nation’s resources and opportunities need to be identified so that skills can be developed.

The Welsh Government has recommended that ten local authorities in South East Wales work together under the guise of the Cardiff City Region (CCR) to improve their economic performance.

Developing the skills supply side and harnessing existing skill sets is key to improving the economic performance of the area. This report analyses the diverse socio-economic conditions within the CCR, and the skills base of the local authorities that are part of it. The report finds opportunities as well as challenges for the region, with great variation in levels of economic activity and access to economic opportunity across the CCR.

KEY FINDINGS • Cardiff city is the key engine for growth for the whole of the CCR. • T he Cardiff area should promote its existing skills base as a means of attracting inward investment, as this compares very well with other UK cities.

• T he economic structure of the region has changed and skills provision needs to reflect the resulting changing needs of the economy.

Focus needs to be placed on developing skills in areas outside of Cardiff in the CCR along with much closer linking of employment and skills policies and interventions, and a better dialogue with the business community.

• Improvements to transport infrastructure need to be made so that people living further away from the capital can more easily access skills and job opportunities in Cardiff.

• There needs to be an understanding that low demand for skilled workers is linked to low supply. One means of breaking this cycle is to work harder to attract larger firms with significant HQ functions to the CCR.

Cardiff Business School

Our conclusions and recommendations: • There is a significant difference in experience of areas within the Cardiff City Region in relation to full time/part time working, public sector employment, and overall employment growth.

• The employment structure of the CCR is developing in such a way that gross value added per capita differentials between the richest and poorest parts of the area are expected to grow in the next decade.

• This will lead to a greater level of inequality between Cardiff and the Heads of the Valleys area. It is difficult to see where sustainable employment opportunities will emerge in the Heads of the Valleys.

• Improving the skills base of those outside the Cardiff area is unlikely in itself to resolve the disparity. Evidence including that from the European Social Fund Leavers Survey in Wales highlights the necessity of developing improved infrastructure. This would ensure that suitably qualified and skilled people are able to access opportunities around the M4 corridor from areas further to the north in the CCR. The concept of a city region would need to see strong links developed between the education, skills and training provision infrastructure, and physical transport infrastructures.

• Significant interventions are needed to improve skills. This will help improve access to employment and opportunity. A particular focus needs to be placed on skills development outside the Cardiff area.

• Policymakers need to consider what the demands for skills are, and where employment is likely to be based geographically. Economic prospects across the CCR vary tremendously. Evidence suggests that Cardiff and Newport will remain the growth drivers for the City region.

• The structural change in the employment base of the CCR needs to be reflected upon carefully by those developing new skills training provision to ensure that supply responds quickly to changing demands.

3

4

Skills and the Cardiff City Region

table of contents 5

1. THE CARDIFF CITY REGION AND SKILLS 1.1

6

Introduction

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS 2.1

WORKING POPULATION TRENDS IN THE CARDIFF CITY REGION

8

2.2

EMPLOYMENT

14

2.3

SKILLS AND QUALIFICATIONS BASE OF THE CARDIFF CITY REGION

17

2.4

UNEMPLOYMENT

18

2.5

ECONOMIC ACTIVITY RATES

21

2.6

EARNINGS ACROSS THE CARDIFF CITY REGION AREA

22

3. CONCLUSIONS AND RECOMMENDATIONS

5

Cardiff Business School

1. THE CARDIFF CITY REGION AND SKILLS 1.1 Introduction 1.1.1 The Cardiff City Region is the focus of a new regional development agenda. Following a review by the Welsh Government in 2012, it was recommended that 10 local authorities1 should work together to improve the overall economic performance of the South East of Wales. Given the diverse socio-economic conditions facing the local authorities involved, and the large population encompassed (over 1.4 million), it is imperative to understand better the existing resources and the potential of this new region.

1.1.2 Wales was long viewed by inward investors as a low cost manufacturing base and export platform – something akin to a branch plant economy. But Wales has moved on.

The economy now features high levels of service industry employment. This report examines the employment structure and skills base of the new Cardiff City Region (CCR). It provides a comparison with other leading city regions in the UK.

1.1.3 Cardiff has one of the highest numbers of graduates relative to other cities. However, the report finds that the CCR faces some real skills challenges when compared to its major competitors.

1.1.4 The report examines the employment structure of the CCR. It does this by first looking at the socio economic data as well as the individual skills base of the local authorities that are included in the CCR, before drawing comparisons with other city regions. Earnings and unemployment data provide valuable insights. Finally some recommendations are made on how to improve the current skills base of the City region.

Skills and Qualifications Working population trends

employment structure

highest number of graduates socio-economic data

1

ardiff, Newport, Monmouthshire, Merthyr Tydfil, Bridgend, Torfaen, Blaenau, C Gwent, Vale of Glamorgan, Caerphilly, Rhondda Cynon Taf (RCT)

6

Skills and the Cardiff City Region

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS 2.1

Working population trends in the Cardiff City Region

2.1.1 Table 1 compares the recent population trend in the local authorities that constitute the CCR and Wales. The data refer to Office for National Statistics (ONS) mid-year estimates.

Wales as a whole experienced a 3.3% increase in population over the period 2001 to 2010. However in the CCR, the local authorities of Blaenau Gwent, Merthyr Tydfil and Torfaen saw a decline in population over the period. Stronger population growth was found both in urban and rural authorities with notable increases in both Newport and Monmouthshire. Cardiff itself saw the largest increase (10%) growing three times faster than the rest of Wales.

Table 1: Population change: Cardiff City Region Local Authorities & Wales, 2001-2010 Source: ONS, mid-year population estimates, [NOMIS]

Local Authority/Country

2001

2005

2008

2010

Population Change 2001-2010

2,910,232

2,950,128

2,990,077

3,006,430

3.3

Bridgend

128,735

131,247

133,921

134,564

4.5

Vale of Glamorgan

119,277

121,789

124,123

124,976

4.8

Cardiff

310,088

317,846

330,515

341,054

10.0

RCT

231,910

234,538

234,377

234,309

1.0

56,207

55,314

55,556

55,699

-0.9

169,546

170,743

172,363

173,124

2.1

Blaenau Gwent

70,000

68,709

68,759

68,368

-2.3

Torfaen

90,912

90,527

90,645

90,533

-0.4

Monmouthshire

84,984

87,347

87,837

88,089

3.7

137,642

138,553

139,662

141,306

2.7

1,399,301

1,416,613

1,437,758

1,452,022

3.7

Wales

Merthyr Tydfil Caerphilly

Newport CCR

7

Cardiff Business School

2.1.2 Table 2 provides information on the working age population of the CCR local authorities. The working age population varies between 61.3% of total population in Monmouthshire to 68.5% in Cardiff. In seven of the local authorities, the share of working population to total population is within a percentage point of the Welsh average at 63.4%.

These variations in the population of working age are one component contributing to differences in gross value added per capita across the CCR. However, other factors such as concentration of different sectors in particular areas which pay different rates can greatly distort this figure.

Table 2. Working Population across the Cardiff City Region, mid-2011 Source: ONS, 2011 mid-year estimates

Local Authority/Country Wales

Total

Working Population Working age population as a %

3,063,758

1,941,524

63.4

Bridgend

139,410

89,024

63.9

Vale of Glamorgan

126,679

79,677

62.9

Cardiff

345,442

236,627

68.5

RCT

234,373

149,734

63.9

58,851

38,026

64.6

178,782

114,124

63.8

Blaenau Gwent

69,812

44,821

64.2

Torfaen

91,190

57,509

63.1

Monmouthshire

91,508

56,067

61.3

145,785

92,546

63.5

1,481,832

958,155

64.6

Merthyr Tydfil Caerphilly

Newport CCR

8

Skills and the Cardiff City Region

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS Cont.

2.2 Employment 2.2.1 Table 3 reveals the distribution of the Cardiff City Region employment across the 10 constituent local authority areas. The region encompasses nearly 50% of total Welsh employment. This is to be expected as it accounts for approximately 50% of the Welsh population. Around one third of employment in the CCR is within the Cardiff local authority area. Table 3 also reveals the intensity of employment within

the local authorities. It measures the share of the Welsh population in the local authority compared to the share of employment in the local authority. For example, Cardiff has 16.4% of Welsh employment with 11.2% of the Welsh population. If a local authority has a score greater than one it indicates it has a high intensity. These data shows the importance of Cardiff and Newport as employment hubs for the city region.

Table 3: Employment across CCR Local Authorities 2011 Source: Business Register and Employment Survey (ONS)

KEY

1.5 %

Employment

4.4 %

% of Wales Total

Intensity of Employment

4.2 %

16.4 %

+3+2H +10+2H +8+2H +32+4H 0.7

employment

1.0

0.7

employment

18,129

employment

51,871

Blaenau Gwent

Bridgend

1.9 %

employment

49,458

191,929

Caerphilly

2.7 %

Cardiff

6.2 %

6.2 %

+4+2H +6+2H +14+4H +13+2H 0.8

0.9

1.3

employment

employment

employment

employment

Merthyr Tydfil

Monmouthshire

Newport

RCT

22,283

31,208

3.1 %

72,486

2.9 %

72,363

49.6%

+7+2H +6+2H +50+2H 0.8

employment

36,434

1.0

employment

employment

33,688

579,849

1.0

The Vale of Glamorgan

Torfaen

CCR

1.5

+100+H employment

1,170,077

Wales

0.8

9

Cardiff Business School

2.2.2 Table 4 provides more detail and shows recent changes in employment for CCR local authorities for the period 2008-2011. It should be noted that changes in employment can be affected by the time-scale adopted. This analysis aims to investigate whether employment in the individual local authorities is recovering after the problems of the credit crisis.

Overall employment in Wales fell by 2.1% between 2008 and 2011. Although no local authorities saw growth

across the period selected, Table 4 does reveal some limited recovery in employment in the Cardiff City Region as a whole after 2009. At the same time, the table provides strong evidence of a variation in prospects across the CCR. Taking the shorter period 2009-2011 from Table 4, Bridgend and Monmouth see large losses of employment, while stronger growth in numbers is evidenced in Cardiff and Newport. It is important to recognise that employment growth in Cardiff and Newport often involves people outside of these two local authority areas, with Cardiff particularly seeing strong inward commuting from local authority areas to the North and West.

Table 4: Employment across CCR Local Authorities 2008 to 2011 Note: Numbers are for those aged 16 and over. Source: Business Register and Employment Survey (ONS)

Total Employment

2008

2009

2010

1,195,520

1,157,749

1,165,520

1,170,077

-2.1

0.4

Blaenau Gwent

19,034

18,062

18,991

18,129

-4.8

-4.5

Bridgend

56,947

55,354

53,344

51,871

-8.9

-2.8

Caerphilly

50,727

51,552

48,887

49,458

-2.5

1.2

193,710

187,732

190,692

191,929

-0.9

0.6

Merthyr Tydfil

22,334

21,874

21,859

22,283

-0.2

1.9

Monmouthshire

35,582

33,310

32,496

31,208

-12.3

-4.0

Newport

73,864

69,862

70,750

72,486

-1.9

2.5

RCT

73,276

70,390

72,435

72,363

-1.3

-0.1

The Vale of Glamorgan

36,661

35,972

35,687

36,434

-0.6

2.1

Torfaen

35,150

33,333

33,457

33,688

-4.2

0.7

597,285

577,441

578,598

579,849

-2.9

0.2

Wales

Cardiff

CCR

2011 2008-2011 2008-2011 % Change % Change

10

Skills and the Cardiff City Region

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS Cont.

2.2.3 There has been a concern in South East Wales as a whole that selected employment increases reflect higher numbers of part-time opportunities, and a possible reduction in the quality of employment. To understand the nature of the changes in employment, comparisons are made between the changes in part time and full time work across the period.

2.2.4 Table 5 displays these data. Overall across the Cardiff City Region the level of part-time employment is actually little changed over the period with the exception of a peak in 2010.

2.2.5 However, Table 5 reveals that full time employment in the CCR fell by around 22,000 over 2008-2010, but saw some recovery in 2011. There is little evidence of a general trend that would hint at a strong overall increase in part time working. Again interpretation here is sensitive to the reference year taken, but in five local authorities there is evidence to demonstrate that part-time employment increases marginally in the period 2008-11. Three areas (Caerphilly, Monmouth and Bridgend) see sharp falls in part-time working over the period 2008-11.

Table 5: Part Time and Full Time Employment across CCR Local Authorities 2008 to 2011 Source: Business Register and Employment Survey (ONS)`

Total Employment

2008

2009

2010

2011

Full time

Part time

Full time

Part time

Full time

Part time

Full time

Blaenau Gwent

12,839

6,195

11,795

6,268

11,786

7,205

11,391

Bridgend

39,155 17,793

36,668 18,686

35,270 18,075

35,820 16,051

-8.5 -9.8

Caerphilly

33,385 17,342

34,079 17,473

33,195 15,692

33,982 15,475

1.8 -10.8

Cardiff

Part time

% Change Full Part time time

6,738 -11.3

133,469 60,240 130,207 57,525 129,543 61,148 130,242 61,687 7,494

3.5 -7.5

20,671 11,824

20,034 11,175

-8.9 -17.8

46,931 22,931

47,459 23,292

50,019 22,467

-0.1 -5.6

53,126 20,150

46,711 23,678

48,376 24,060

47,475 24,887 -10.6 23.5

The Vale of Glamorgan

23,528 13,133

22,677 13,295

22,202 13,485

22,102 14,331

-6.1

9.1

Torfaen

23,845 11,304

21,828 11,504

20,994 12,463

21,880 11,808

-8.2

4.5

406,240 191,046 386,916 190,524 384,213 194,386 388,297 191,552

-4.4

0.3

Merthyr Tydfil

14,840

Monmouthshire

21,980 13,603

21,534 11,776

Newport

50,073 23,792

RCT

CCR

14,717

7,142

2.4

6,933

14,486

7,388

-2.4

8.8

15,352

11

Cardiff Business School

2.2.6 Covering both semi-rural and urban areas, the economic base of the Cardiff City Region was built on the old manufacturing and extractive industries. This focus has changed over the last three decades. Studies in the last decade have revealed that the growth of services, particularly in the public sector, has dominated economic activity. Table 6 shows the changes in public and private sector employment across the more recent period 2008-11 after the credit crunch.

2.2.7 Table 6 reveals that there are significant differences in the changes in public and private sector employment. The majority of public sector employment is within the education, health and public administration sectors.

For the whole of the Cardiff City Region, employment in the public sector grew in 2008-09. By 2011 public sector employment stood at around 166,000, 0.6% higher than

it had been in 2008. Table 6 confirms that up until 2011 the non-market sector of the Cardiff City Region was providing something of a mask concealing private sector employment losses. For example Table 6 reveals nearly 27,000 private sector job losses in the Cardiff City Region between 2008-09 with some limited recovery in 2010 and 2011.

Once again the data identify some of the variation across the Cardiff City Region. In terms of changes in public sector employment, Bridgend, Caerphilly and Monmouthshire have seen relatively high losses, compared with stronger gains in Cardiff and Newport. Cardiff has seen over a 10% rise in public sector employment between 2008-11, whereas Monmouthshire saw a fall of over 16%. With the exception of Caerphilly and RCT, there has been a fall in private sector employment in all local authorities between 2008-11.

Table 6: Changes in Public and Private Sector Employment across CCR Local Authorities 2008 to 2011 Note: Numbers are for those aged 16 and over. Source: Business Register and Employment Survey (ONS)

Total Employment

2008

2009

2010

2011

Public Private Sector Sector

Public Private Sector Sector

Public Private Sector Sector

Public Private Sector Sector

% Change Full Part time time

5,459 13,575

5,849 12,213

5,964 13,026

5,435 12,694

-0.4 -6.5

Bridgend

16,962 39,985

16,731 38,623

17,189 36,155

15,684 36,188

-7.5 -9.5

Caerphilly

13,958 36,769

15,157 36,395

11,992 36,895

12,636 36,822

-9.5

Cardiff

46,546 147,164

50,248 137,483

49,907 140,785

51,466 140,462

10.6 -4.6

Merthyr Tydfil

8,533 13,801

8,802 13,072

8,764 13,095

8,632 13,651

1.2 -1.1

Monmouthshire

9,169 26,414

7,933 25,377

7,804 24,691

7,670 23,539 -16.3 -10.9

Newport

20,548 53,316

23,211 46,651

22,800 47,950

21,484 51,003

4.6 -4.3

RCT

22,602 50,674

22,525 47,865

23,291 49,145

21,363 50,999

-5.5

9,929 26,732

10,200 25,772

10,036 25,651

10,282 26,151

3.6 -2.2

11,043 24,106

11,125 22,208

12,009 21,448

11,074 22,614

0.3 -6.2

164,749 432,536 171,782 405,659 169,757 408,841 165,726 414,123

0.6 -4.3

Blaenau Gwent

The Vale of Glamorgan Torfaen CCR

0.1

0.6

12

Small and Skills Businesses the Cardiff in Priority City Region Sectors

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS Cont.

2.2.8 Looking in more depth at the current sectoral composition of the Cardiff City Region, Table 7 breaks down employment by industry. The first point to note is the high level of employment in industries where productivity growth has historically been slow (i.e. the public sector and education).

2.2.9 Historically, the CCR local authorities have had a relatively high proportion of employment in manufacturing and extractive industries. This has been important in offering relatively higher earnings for males. However, the long term trend has seen rationalisation and restructuring of the manufacturing sector, and during the recession the manufacturing base has shrunk even further. Indeed between 2008 and 2011 it is estimated that the Cardiff City Region area may have lost up to 13,000 manufacturing jobs. Over 5,000 manufacturing jobs were lost in RCT and Bridgend alone between 2008 and 2011. Figure 1 shows the significant decline of manufacturing over this period.

Table 7: Industry employment 2010 CCR Area Source: ONS, BRES

industry Employment

Blaenau Gwent

Manufacturing, Public Financial and Business 7.9 Construction Administration insurance Administration & and Extraction and Defence Support Services

Retail

Other Education Sevices & Health

2,740

3,339

Total

5,125

1,268

173

648

Bridgend

10,655

3,931

1,133

3,512

8,871 10,220 13,548 51,870

Caerphilly

14,805

4,191

681

3,803

7,134

Cardiff

20,902

16,110

12,400

Merthyr Tydfil

3,351

2,329

187

1,091

3,919

4,465

6,945 22,287

Monmouthshire

5,402

893

422

1,151

5,724

8,187

9,428 31,207

Newport

14,166

5,804

3,803

5,508 12,418 14,023 16,764 72,486

RCT

15,353

2,725

864

2,907 11,911 14,779 23,823 72,362

The Vale of Glamorgan

5,716

1,950

516

2,209

5,287

9,320 11,436 36,434

Torfaen

7,968

3,907

379

1,596

4,885

5,421

103,443

43,108

20,598

CCR

4,835 18,128

8,135 10,708 49,457

18,228 28,328 48,365 47,554 191,927

9,533 33,689

40,653 91,217 126,254 154,574 579,847

Cardiff Business School and Federation of Small Businesses, Wales

2.2.10 Of growing importance is the retail sector with over 91,217 jobs. As highlighted above, the CCR has high levels of employment in the public sector comprising public administration, education and health. With such a large proportion of jobs connected to public expenditure, a significant problem for the CCR is the UK government’s cuts programme, which will continue apace until the next general election.

Figure 1. Manufacturing Decline in CCR Source: ONS, BRES, [NOMIS]

2008

80,000

2009

66,000

2010

63,000

2011

67,000

13

2.2.11 Declining employment across the CCR is the defining trend across the period 2008-2010, although there is some indication of recovery in the latest figures. Full-time work has been decreasing more rapidly than part time work.

There is also evidence that the public sector has not seen the declines of the private sector across the region. Overall there is a great deal of variation between local authorities within the CCR. These changes in the employment base will have a marked impact on the future growth potential of local authorities across the CCR, with implications for patterns of skills demand going forward.

14

Skills and the Cardiff City Region

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS Cont.

2.3

Skills and Qualifications Base of the Cardiff City Region

2.3.1 Skills and growth are inherently linked, and there is much evidence of the growth of city regions being linked to highly educated workforces. Academic work such as Grossette (2007) makes a link between business networks and education. Cardiff has been cited as having a relatively well educated workforce3 - the Welsh Government notes that almost 40 per cent of the Cardiff workforce is qualified to at least NVQ level 4.

2.3.2 One important issue is the potential conflation of skills and qualifications. Statistical data is readily available on the qualifications that people hold, but there is rather less on the skills that people have. In 2004 a survey of basic skills was carried out by BMRB for Wales based on a comparable study carried out in England for the Department for Education and Skills during 20034. The survey sampled over 2,500 adults between the age of 16 and 65 in Wales. Although this research was carried out using different methods, it nevertheless allows some comparatives to be drawn.

2.3.3 The results of the surveys drawn from data across Wales demonstrated that: • 75 per cent of adults were assessed at Level 1 or above, around half of whom were at Level 1 and half were at Level 2.

• 53 per cent of adults (around 980,000) were estimated to have Entry Level numeracy or below. Of the 47 per cent assessed at Level 1 or above, less than half were at Level 2.

• Compared with the 2003 results for England, a higher proportion of adults in Wales were estimated to have Entry level or below literacy (25 per cent in Wales compared to 16 per cent in England) and numeracy skills (53 per cent in Wales compared to 47 per cent in England).

2.3.4 In 2010 a similar study conducted by Miller Research found that some progress had been made: 88% of respondents achieved Level 1 or higher for literacy. However, progress on numeracy has been slower, with just 50% of respondents assessed at Level 1 or above.

Table 8. Cardiff City Region. Percentages of the Working Age Population with Different Qualification Levels 2011 Source: Annual Population Survey, ONS

% with degree % with higher % with GCE, or equivalent education below A level or % with no and above degree level equivalent aged % with NVQ 4+ % with NVQ 3+ % with NVQ 2+ % with NVQ 1+ qualifcations aged 16-64 aged 16-64 16-64 aged 16-64 aged 16-64 aged 16-64 aged 16-64 aged 16-64 industry Employment

9.6

7.0

22.5

16.5

35.6

57.7

73.7

15.6

Bridgend

20.3

8.4

24.7

28.6

50.3

69.2

82.9

9.5

Caerphilly

13.6

8.5

22.7

21.8

41.8

61.5

76.5

17.0

Cardiff

33.5

5.6

22.3

38.9

58.5

74.7

84.7

9.8

Merthyr Tydfil

10.0

11.0

19.7

20.7

37.5

56.0

68.9

20.1

Monmouthshire

27.1

10.0

24.0

36.7

57.3

75.5

86.8

8.5

Newport

22.0

9.3

21.2

31.1

50.3

68.1

81.5

11.9

RCT

18.6

8.5

21.5

27.0

45.5

66.8

79.7

14.4

The Vale of Glamorgan

25.7

10.9

24.2

36.2

58.4

75.1

86.1

9.1

Torfaen

13.8

8.6

21.7

22.3

42.7

63.2

77.7

13.6

Wales

20.7

8.9

23.3

29.3

50.1

68.6

81.4

12.3

Blaenau Gwent

15

Cardiff Business School

2.3.5 Table 8 examines the qualifications mix of the Cardiff City Region and focuses on both vocational and traditional academic qualifications within the working age population.

For the purposes of the study the percentage without qualifications has also been examined. The table also examines 16-18 year old provision by looking at GCEs and A levels.

2.3.6 The proportion of the working age population with GCE A level or equivalent has been examined. Only three of the local authorities in the Cardiff City Region do better than the Welsh average (23.3% of the working age population with A level or equivalent) with Merthyr Tydfil having the lowest figure of 19.7%.

2.3.8 Looking at the wider skill base of the city region, Blaenau Gwent records one of the lowest levels across the UK with only 16.5% qualified to NVQ (4) or above. When examining the proportion of the working age population with a degree or above the figures also vary dramatically from 9.6% in Blaenau Gwent to 33.5% in Cardiff. Five of the local authority areas in the CCR are well below the Welsh average of 20.7%.

2.3.9 Table 8 also gives figures for the percentage of working age population with no qualifications. The Welsh average is 12.3%, with a level of over 20% in Merthyr Tydfil.

2.3.10 A comparison of qualifications levels has been undertaken against some of the major city regions in the UK. Table 9 2.3.7 Looking at the proportion of the working age population displays these results. Cardiff does well when compared to with an NVQ (4)5 or above, the Welsh average (29.3%) is other major cities for skill levels. Cardiff is second only to Bristol only bettered in four parts of the Cardiff City Region (Cardiff, for the percentage of the working age population with a Monmouthshire, Newport and the Vale of Glamorgan with degree and is highest for NVQ3+ with 58.5% of the working 38.9%, 36.7%, 31.1% and 36.2% respectively). age population achieving this (this is considerably higher than the UK figure of 52.5%). In terms of no qualifications as a proportion of the working population, Cardiff has the lowest level across the sample. For the purposes of comparison the Table 9. Percentages of the Working Age Population with Different CCR averages have also been calculated.

Qualification Levels: Cardiff City Region and Other City Areas 2011 Source: Annual Population Survey, ONS.

industry Employment

Birmingham Liverpool Mancheshter

Bristol

Cardiff Cardiff City Region

UK

% with degree or equivalent and above aged 16-64

18.8

20.8

31.4

36.2

33.5

19.4

24.3

% with GCE, A level or equivalent aged 16-64

21.2

23.1

20.5

17.1

22.3

22.4

22.7

% with NVQ 4+ aged 16-64

25.2

26.2

38.3

42.2

38.9

27.9

32.7

2.8

2.8

2.0

2.8

2.4

3.5

3.7

% with no qualification aged 16-64

16.9

18.2

14.0

12.5

9.8

12.9

10.9

% with NVQ 3+ aged 16-64

43.5

46.6

57.0

57.7

58.5

47.7

52.5

% with NVQ 2+ aged 16-64

59.3

64.3

70.2

70.5

74.7

66.7

69.5

% with NVQ 1+ aged 16-64

72.8

76

79.4

81.6

84.7

79.8

82.4

% with Trade apprenticeships aged 16-64

ttp://www.ljmu.ac.uk/EIUA/EIUA_Docs/Cardiff_Executive_Summary.pdf h https://www.education.gov.uk/publications/eOrderingDownload/RR490.pdf 5 RNVQs are not formally defined in terms of equivalence to conventional academic qualifications. However for the compilation of social statistics and other purposes, approximate equivalences have to be established.

NVQ 1 = foundation GNVQ, three to four GCSEs at grades D-E, Business & Technology Education Council (BTEC) first certificate.

NVQ 2 = four or five GCSEs at grades A*–C, BTEC first diploma.

NVQ 3 = two or more A levels, BTEC Ordinary National Diploma (OND), City & Guilds Advanced Craft.

NVQ 4 = BTEC Higher National Certificate (HNC) or Higher National Diploma (HND), or City & Guilds Full Technological Certificate /Diploma 3 4

16

Skills and the Cardiff City Region

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS Cont.

2.3.11 The CCR fares less well than Cardiff, having a higher percentage than the UK average of the working population without any qualifications. Notwithstanding the success of Cardiff in having significant numbers of graduates, when the Cardiff figures are combined with those of the wider CCR, the region falls below the UK average. The region however does better in terms of trade apprenticeships where it is close to the UK average and greater than the other selected cities.

Table 10. Non-traditional Methods of Learning 2011 Source: Annual Population Survey, ONS.

local authority/country

%

%

of economically active with trade apprenticeships aged 16-69

with taught adult learning aged 16-69

Blaenau Gwent

4.9

28.0

Bridgend

3.6

27.0

Caerphilly

4.3

30.2

Cardiff

2.3

27.8

Merthyr Tydfil

6.3

29.1

Monmouthshire

4.5

28.5

Newport

3.3

26.9

RCT

3.5

31.0

The Vale of Glamorgan

4.4

27.3

torfaen

5.0

27.6

Wales

4.2

28.0

2.3.12 Another important aspect of skills development is the more non-traditional methods of learning and informal qualifications and training undertaken by individuals. Table 10 shows the proportion of people of working age who have undertaken taught adult learning courses and trade apprenticeships. Increasing the numbers of young people accessing trade apprenticeships has become an important policy objective in Wales.

2.3.13 Looking first at adult learning, the proportion of economically active who have undertaken taught adult learning is generally better than the Welsh average, with 7 out of the 10 local authorities in the CCR having a higher percentage of adult learners than the overall Welsh level of 27.6%.

Two of the authorities that have not done well in qualification terms are nevertheless well represented in the numbers of adult learners: in Merthyr Tydfil and Blaenau Gwent, approximately 28% of the economically active have engaged in taught adult learning.

The proportion of the economically active with trade apprenticeships averages 3.7% for the UK. For Wales the comparative figure is 4.2%. Across the CCR the figure varies from a low of 2.3% in Cardiff to a high of 6.3% in Merthyr. Clearly, these numbers tell us much about the historic and current industrial structures of these areas.

17

Cardiff Business School and Federation of Small Businesses, Wales

2.4 Unemployment 2.4.1 In what remains of this section we focus on other labour market and economic variables that are relevant to a discussion of skills and skills development.

2.4.2 Table 11 provides a summary of the Jobseeker’s Allowance (JSA) claimant count for the Cardiff City Region and comparative figures for Wales. The JSA claimant count records the number of people claiming JSA and National Insurance credits at Jobcentre Plus local offices. To avoid distortions caused by commuting patterns, the rates here are the claimant count expressed as a portion of the local resident (not workforce) population of working age.

2.4.3 There were over 46,000 JSA claimants across the Cardiff City Region in August 2012. Comparison of the claimant rate with figures for Wales as a whole again hints at the poor economic prospects for some parts of the CCR area.

In August 2012 7.6% of the resident population of working age in Blaenau Gwent were JSA claimants, with a figure of 6.3% in Merthyr. Rates of unemployment are lower in Cardiff, Monmouthshire and the Vale of Glamorgan (see Figure 2). It appears that areas closer to the M4 corridor perform better on this measure relative to the Valleys economies. Table 11 also reveals the sharp divide between claimant rates for males and females.

Table 11. JSA Claimants August 2012 CCR Local Authorities Note: Rates for 2011 onwards are calculated using the mid-2010 resident population aged 16-64.

2.6 %

1.4 %

FEMALE Rate

+50+3218H +47+3617H +51+3217H +49+3417H 5.2 %

TOTAL NUMBER

3,395

TOTAL NUMBER

3,626

2.1 %

10,801

3.4 %

Bridgend

3.1 %

Caerphilly

0.9 %

Cardiff

1.8 %

1.7 %

+58+3111H +52+3315H +53+3413H +50+3317H 6.3 %

2.6 %

TOTAL NUMBER

5.6 %

TOTAL NUMBER

2,386

TOTAL NUMBER

1,458

Merthyr Tydfil

1.1 %

7,637

3.8 %

Monmouthshire

3.4 %

Newport

1.8 %

RCT

1.6 %

2.7 %

+45+3421H +52+3315H +48+3319H +34+4422H 3.5%

5.5 %

TOTAL NUMBER

The Vale of Glamorgan

4.8 %

TOTAL NUMBER

2,807

TOTAL NUMBER

3,157

3.7 %

TOTAL NUMBER

46,390

3.2 %

torfaen

5.1 %

TOTAL NUMBER

5,192

1.7 %

4.6 %

TOTAL NUMBER

5,931

2.7%

Blaenau Gwent

2.4 %

MALE Rate

1.4 %

4.1 %

TOTAL NUMBER

4.1 %

Total Rate

1.8 %

7.6 %

4.9 %

KEY

78,978

5.6 %

CCR

Wales

4.4 %

18

Skills and the Cardiff City Region

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS Cont.

2.4.4 The duration of unemployment for local authorities in the north of the Cardiff City Region in August 2012 was also more likely to be of a longer term than that found for all Wales.

2.4.5 The local authorities of Blaenau Gwent, Caerphilly, Merthyr Tydfil, Torfaen and RCT have the highest unemployment rates. The five authorities had nearly 23,000 people unemployed in August 2012, over 28% of the Welsh total unemployed.

Figure 2: Claimant rates; all people: CCR Local Authorities August 2012 Note: Rates for local authorities are calculated using the mid-2010 resident population aged 16-64.

Source: NOMISWEB

Blaenau Gwent Bridgend Caerphilly cardiff Merthyr Tydfil Monmouthshire Newport RCT The vale of glamorgan torfaen Wales

7.9 = +790 4.2 = +420 5.3 = +520 4.6 = +465 6.8 = +680 2.8 = +280 5.9 = +590 5.1 = +500 3.6 = +360 5.6 = +560 +4104.1 =

2.5 Economic activity rates 2.5.1 Table 12 illustrates rates of economic inactivity across the CCR area. The average economic activity rate in Wales was 73% in 2011-12. Overall activity rates fell below the Welsh rate in Blaenau Gwent, Caerphilly, Cardiff, Newport, Merthyr Tydfil, Newport and RCT. The economically inactive include those with a disability, carers, people experiencing long-term illness and those early retired. Students are also included in these figures which helps to explain the relatively low rate of economic activity in Cardiff.

2.5.2 Each working day, approximately 70,000 people commute from the Cardiff City Region into the capital to work. There is evidence to suggest that this plays a large part in the growth of the city’s employment and will continue to do so.

The economically inactive are therefore a potentially critical source of labour for future development.

19

Cardiff Business School

Table 12: Economic activity rates, Apr 2011-Mar 2012 Source: NOMISWEB

+70+7663 + +7867 72 +73+8066 +75+8169 Blaenau Gwent

69.4

62.5

76.5

cardiff

72.1

66.9

77.6

Newport

72.8

65.5

80.2

torfaen

74.7

68.9

80.9

+ +7663 70 70 + +7764 +71+7864 +7884+73 +71+7666 +7678+73 +73+7968 Bridgend

Caerphilly

77.3

70.4

84.3

76.8

Merthyr Tydfil

71.0

64.4

Monmouthshire

83.7

RCT

The Vale of Glamorgan

70.9

76.1

75.5

73.1

78.1

Wales

key

73.0

67.6

78.1

72.7

77.9

65.8

70.3

63.9

economic activity rate female aged 16-64 economic activity rate male aged 16-64 economic activity rate aged 16-64

78.5

20

Skills and the Cardiff City Region

2. ECONOMIC BACKGROUND TO THE SKILLS ANALYSIS Cont.

2.5.3 Table 13 examines the components of economic inactivity across the Cardiff City Region. For Wales as a whole, 23.6% of economically inactive are students. Within the Cardiff City Region this figure varies considerably between 38.9% in Cardiff and 11.4% in Merthyr Tydfil. Only Cardiff and the Vale of Glamorgan have higher levels of student-linked economic inactivity than the Wales average.

2.5.4 Of particular importance for the skills development in the Cardiff City Region is the very large number of the inactive that are classified as long term sick. For Wales as a whole this figure was 27.5% . However, for parts of the CCR the long term sick figure reaches well over 30% of the economically inactive. Nearly 40% of the economically inactive were classified as long term sick in Merthyr Tydfil and nearly 36% in RCT.

Table 13: Components of economic inactivity in the Cardiff City Region: Sept 2012 Note: % for top total row is as proportion of all aged 16-64, while other rows %s refer to total economically inactive.

Source: NOMISWEB: ONS Annual Population Survey

industry Employment

% who are % of economically economically inactive % of economically inactive looking after aged 16-64 inactive student family home

% of economically inactive long % of economically % of economically term sick inactive retired inactive other

Blaenau Gwent

30.6

20.9

22.5

29.6

15.8

7.3

Bridgend

22.7

18.6

18.5

32.3

22.2

6.3

Caerphilly

29.7

12.5

27.4

34.6

14.5

6.7

Cardiff

27.9

38.9

20.7

18.1

10.1

7.3

Merthyr Tydfil

29.0

11.4

24.4

39.5

15.3

6.1

Monmouthshire

21.9

20.1

18.9

23.9

27.0

7.0

Newport

27.2

22.2

23.6

27.4

15.7

7.9

RCT

29.1

21.4

20.3

35.5

14.1

6.3

The Vale of Glamorgan

24.5

23.8

19.7

25.3

19.4

11.0

Torfaen

25.3

17.0

21.5

30.8

22.0

6.1

WALES

27.0

23.6

21.4

27.5

17.3

7.1

21

Cardiff Business School

2.6 Earnings across the CCR area 2.6.1 It is important to consider the rewards available for better qualified and skilled people when assessing skills development. Table 14 shows average (median) gross weekly pay for full-time workers taken from the Annual Survey of Hours and Earnings (ASHE) for 2011. The table reveals that earnings across the Cardiff City Region vary greatly. There is also significant gender difference. The unweighted averages of the male earnings against female earnings see a £152 difference. However without exception, on all of the measures, the unweighted Cardiff City Region averages are greater than the overall Welsh figure, so the disparity between the incomes of men and women are greater outside of Cardiff than they are elsewhere. In terms

of all full time earnings the Cardiff City Region average level is £463 per week. There is large variability, with Blaenau Gwent over £76 less than the average.

2.6.2 Outside Cardiff city, the area typically has a lower proportion of employees in the relatively wellpaid categories of managers and professionals, and administrative and skilled occupations. The proportion of people employed in the managerial and professional category (Standard Occupational Class (SOC) 2010 1-3) in 2010-2011 was 28.8% in Blaenau Gwent compared to 38.9% for Wales There are also links between the occupational basis of employees in Blaenau Gwent and the underlying qualification base.

Table 14: Average Weekly Earnings in CCR Areas 2011 (residence based) Source: ONS, Annual Survey of Hours and Earnings (ASHE)

Bridgend Caerphilly cardiff Merthyr Tydfil Monmouthshire Newport RCT The vale of glamorgan torfaen ccr Wales

Male

feMale

Total

Full Time Workers

+460+ 370+ 301+ 454 +463+ 376+ 305+ 459 +438+ 384+ 267+ 470 +508+ 394+ 326+ 490 +445+ 363+ 291+ 438 +434+ 368+ 306+ 434 +560+ 420+ 318+ 552 +441+ 370+ 324+ 439 +489+ 390+ 327+ 480 +460+ 383+ 312+ 470 +463+ 350+ 278+ 451 + 385 + 342+ 305+ 382

Blaenau Gwent

+385+ 342+ 305+ 382

Key

382.2

305.3

342.3

385.1

451.2

277.8

349.9

463.4

470.1

311.9

383.3

459.7

479.1

327.2

390.3

498.5

436.8

323.8

369.5

441.1

551.9

317.6

419.9

560.3

421.8

306.3

367.4

433.5

436.7

291.1

362.6

444.7

490.8

326.3

393.9

508.5

469.6

266.9

383.9

438.8

459.0

305.4

376.3

463.4

453.8

301.3

369.5

460.0

22

Skills and the Cardiff City Region

3. CONCLUSIONS AND RECOMMENDATIONS 3.1.1 The statistics reviewed in this report clearly show that economic prospects across the Cardiff City Region vary tremendously. The skills of the Cardiff area are the second highest in the UK in terms of the proportion of the working age population with a degree.

The employment structure of the Cardiff City Region is developing in such a way that the disparities between the richest and poorest parts of the area are expected to grow in the next decade.

There is little doubt that Cardiff and Newport will remain the growth drivers of the City region. Providing sustainable economic opportunities, particularly in local authority areas in the Heads of the Valleys, represents a real challenge. In the Heads of the Valleys area, it is difficult to see where sustainable employment opportunities will arise over the next decade.

3.1.2 Differentials across the Cardiff City Region in terms of unemployment levels, inactivity rates and household incomes show few signs of reducing without more structured interventions. The long-term role of skills interventions is to improve access to opportunity and employment together with growth prospects across the area. The underlying challenge is a huge one, particularly when seen in the context of persistent socioeconomic disparity across the City region. Evidence suggests that skills and employment interventions for those in the CCR outside of the Cardiff area are unlikely in themselves to resolve the disparity. Rather, a more realistic view would be to use the relatively strong growth of Cardiff as a driver of the whole CCR.

23

Cardiff Business School

3.1.3 The strong skill base of the Cardiff area presents a good foundation on which to build a reputation for the CCR as a whole. But the picture is not uniformly good. While the conditions for attracting inward investment from other parts of the UK or overseas are tough, the capital city does not succeed in attracting firms with significant headquarters types functions.

3.1.4 These same firms often demand higher order skills. We believe this lack of headquartered businesses marks the Cardiff City Region out from other city regions in the UK and places a constraint on skills demand in the capital. There needs to be an understanding that low demand for skilled workers is more likely to lead to low supply so Cardiff needs to attract larger firms with significant HQ functions to the CCR area as a means to boost the CCR as a whole.

3.1.5 It is difficult to see how the underlying concept of the Cardiff City Region will change economic prospects for local authorities to the north of the capital given the existing quality of infrastructure links. Evidence including that from the European Social Fund Leavers Surveys in Wales highlights the role of improved infrastructure in getting suitably qualified and skilled people to opportunities around the M4 corridor from areas further to the North. The concept of a city region would need to develop strong links between the infrastructure surrounding education, skills and training provision, as well as physical transport infrastructures.

Contact Details Roy J Thomas Tel: 029 20442020 Email: roy@positifgroup.co.uk

Design: www.blacksheep.info

Positif 104-105 Bute Street Cardiff CF10 5AD UK