The employment survey figures from BRES show that the ...



centertop00 Sector Skills Baseline Study FORADVANCED ENGINEERING AND MANUFACTURINGExecutive Summary2015Introduction1.1 ContextThe manufacturing sector directly employs around 2 million people in the UK, accounting for 8% of total employment and contributes 10% of UK output. Furthermore, the sector makes a significant contribution to exports, undertakes a high level of research and development, and is a key driver of technological change. It helps to create employment in other sectors and supports local supply chains. On average, the sector pays higher wages than the service sector. The sector is therefore a significant contributor to the national economy and presents an opportunity for improved economic growth.This illustrates the continued importance of the manufacturing sector. The use of developing technologies and techniques means that advanced manufacturing offers greater potential for productivity growth than many other sectors. Economic theory and international experience also suggests that the UK is more likely to enjoy a comparative advantage in more advanced forms of manufacturing. Mechanisms to achieve this include developing higher skills, facilitating greater levels of innovation and activity across the value chain.The Lancashire Strategic Economic Plan (SEP, 2014) sets out a sector development programme which aims to improve the capability and capacity of Lancashire’s competitive strengths in key sectors. The SEP identifies the advanced manufacturing sector as providing Lancashire with a strong platform on which to develop, sustain and grow clusters of international importance. There is a need to ensure the sector is competitively positioned to maximise this opportunity. 1.2 AimsRegeneris was commissioned by the Lancashire Skills and Employment Board to develop a draft Skills Action Plan for Advanced Manufacturing in Lancashire.The objective of the project was to produce a detailed analysis of skills and employment issues for the Advanced Manufacturing sector in Lancashire and to develop a draft partnership-based Action Plan with recommendations to address those issues. The Advanced Manufacturing sector has been identified as a key sector for Lancashire and it is recognised that the skills and employment system play a crucial role in supporting growth in the sector. 1.3 ApproachThere were three phases to the research:Phase 1: Identify key issues through developing an understanding of the detailed skills and employment issues that the sector faces and how effective the skills and employment system in Lancashire is in Lancashire at addressing those issues;Phase 2: Understand delivery constraints that prevent providers responding as effectively as they might to the identified issues; andPhase 3: Develop an Action Plan with local partners to respond to these issues. There are two outputs from the study:A detailed Evidence Base report which supports the Action Plan and encapsulates the research undertaken in Phase 1 and 2 of the study; andA draft Skills Action Plan which establishes the rationale for intervention and identifies recommended actions required to meet the skills needs of the advanced manufacturing sector. The research was undertaken between May and July 2015 and encompassed data analysis, literature review, and extensive consultation with learning providers, industry representatives and employers. State of the Sector2.1 Nature of the Sector in LancashireThe advanced manufacturing sector employs around 73,300 people in Lancashire, accounting for 12% of total employment. The sector generates around ?3.7 billion in Gross Value Added each year, contributing 15% to Lancashire’s GVA compared to 8% nationally.The advanced manufacturing sector is important in absolute terms to all authority areas in Lancashire but there are areas of geographical concentration, illustrating the dependence of local areas on the sector including Fylde, Blackburn with Darwen, Pendle, South Ribble, Ribble Valley and West Lancashire. There are around 3,900 VAT registered businesses in the advanced manufacturing sector in Lancashire, accounting for 9% of the total business stock. A key challenge in delivering training to meet the needs of the sector is the size of the business base, with 99% of the manufacturing business stock classified as a Small Medium Enterprise (<250 employees) and with 74.7% of manufacturing businesses falling into the micro category (employing 0-9 people). This has an impact on businesses willingness to participate in training because of the time and cost implication it creates for a small business. The employment survey figures from BRES show that the advanced manufacturing sector in Lancashire has experienced a reduction in employment over time, with a loss of -2,800 employees (-4%) between 2010 and 2013. However this trend was considered unusual by the representatives at the Aerospace Focus Group as the time period did not align with a time when the sub-sector was shedding employees. In the case of the aerospace sector in Lancashire it is noted that a significant proportion of BAE’s workforce were located in Saudi Arabia but had Lancashire as their UK administrative base. A change in the administrative base of these workers contributed to a perceived decline in employment when in actual fact there was no physical change in employment in Lancashire throughout this time period. If this perceived anomaly was to be updated in the BRES statistics, it would suggest that the advanced manufacturing sector has remained stable over recent years. This is in line with the trend nationally, where there has been an increase in employment of around 1%. A number of sub-sectors are considered to be of both relative and absolute importance to the Lancashire economy including aerospace, automotive, food and drink, textiles, and chemicals. 2.2 Profile of the Workforce and Future Demand SignalsKey features of the manufacturing workforce in Lancashire include:The workforce of the manufacturing sector is characterised by full-time workers, with 97% of workers in the sector employed full time, compared to 63% across all sectors of the economy.The sector is male dominated, with males accounting for 76% of the workforce in the sector compared to a 53% average for the economy overall.The manufacturing workforce is ageing, with 45% of the workforce aged between 45 and 64 years of age (compared to 40% overall). In the forthcoming years, a large section of the workforce will enter retirement age and need replacing.Most workers in the manufacturing sector hold some form of qualification. A high proportion of workers in the sector have an apprenticeship or similar illustrating the strength of the intermediate skill base in the sector.The occupational profile of the sector is well represented by skilled trades and process/plant and machine operatives, whereas higher level occupations are below average in their representation.The sector pays well: the median annual wage of a full time worker in the manufacturing sector in the North West is ?27,800 (10.3% above the average across all sectors).The manufacturing sector has one of the highest rates of skill shortage vacancies in Lancashire at 23%, according to the latest UK Employer Skills Survey. Future Demand SignalsThe Foresight Project into the Future of Manufacturing identified the opportunities and challenges faced by the manufacturing sector. This included technological change; new markets driving demand; continued fragmentation of the production chain; and greater dependence on skilled workers. These drivers for change will have a significant implication for skill needs, requiring a flexible workforce with strong specialist skills in niche areas. The future profile of the workforce indicates that whilst the population of Lancashire is predicted to grow (+5% increase between 2012 and 2037) the structure of the workforce is predicted to age substantially, with a projected contraction of 7% in the working age population. This highlights the issue of replacement demand: the need to replace workers who are retiring from the workforce. Published economic forecasts for the advanced manufacturing sector provide a ‘baseline’ scenario for Lancashire and project a reduction in employment of 14% (equivalent to 9,400 workers) in Lancashire between 2015 and 2030. However, it is likely that these forecasts have been based upon historic data (BRES & ABI data) and they do not take into account planned policy interventions. The aerospace sub-sector in particular is subject to a perceived statistical anomaly. The implication of this is that the forecast are likely to exaggerate the forecasted reduction in employment in the sector. It should also be noted that the prospects for the aerospace sector (which accounts for a large proportion of employment in the advanced manufacturing sector in Lancashire) are closely tied to the performance of BAE systems and the size of contracts that it wins, so it is difficult to forecast with any accuracy in the longer term. Working Futures forecasts take into account both replacement and expansion demand. Excluding replacement demand, the forecasts imply that in Lancashire the manufacturing sector as a whole is expected to contract by 6,500 between 2012-2022 (as expansion demand is negative). However, the forecasts also show that the sector will need to recruit 21,800 workers to accommodate replacement demand. This yields a net demand of around 15,300 (1,530 per annum). A closer examination of the forecasts by occupation reveals that expansion demand is driven by professional and managerial occupations which typically require a higher level of qualification. These high level skills are also important to meet replacement demand, although it is noted that skilled trades account for a quarter of all replacement demand, illustrating the continued need for investment in the intermediate skill base.These forecasts do not take into account planned investments and policies aimed at stimulating the sector. These interventions have the potential to alter the baseline forecasts through ‘policy-on’ demand-led and supply-side interventions such as the development of the Warton and Samlesbury EZ sites including the potential establishment of a National Catapult Centre. These interventions offer tremendous opportunity for enhancing the scale and value of the advanced manufacturing sector in Lancashire and must be embraced and supported by the Skills Action Plan to maximise the opportunities presented. 2.3 Provision in LancashireLancashire has a highly relevant and well regarded learning infrastructure to meet the needs of advanced manufacturing employers. The quality of this provision is generally very high, however the pace of technological change is so fast within the sector that the challenge is how responsive the system can be to ensuring that the provision on offer is directly relevant and meets employer needs. Higher EducationHigher Education provides a highly regarded pathway into career opportunities in the manufacturing sector. An analysis of entrants to universities in 2012/13 shows the number of entrants into STEM subjects in Lancashire and surrounds. The University of Central Lancashire had the highest number of students enrolling in STEM courses in Lancashire (1,205) followed by Lancaster University (870) and Edge Hill University (760). The ability of retaining graduates within Lancashire is more challenging when students originate from overseas. According to the 2013/14 HESA Student Record non-EU students accounting for 17% of engineering and technology students at UCLan and 18% of students at Lancaster University. Learner satisfaction with engineering provision at Lancaster University and UCLan is high. The institutions rank highly with respect to research specialisms, for example, general engineering at Lancaster University is ranked 9th by the Complete University Guide 2016, and UCLan ranks 47th. Further Education and Work Based Learning ProvisionThere are 10 Further Education Institutions (FEIs) within Lancashire. Nine of these FEIs have an engineering offer, with the majority of FEIs offering a range of provision in the field. Blackpool and Fylde College and Preston College have the largest variety of provision. The quality of provision is high, with all relevant courses achieving a ‘good’ and ‘outstanding’ offer through Ofsted. Group Training Associations (GTAs) provide a significant amount of relevant provision in Lancashire, particularly Apprenticeships. There is only one Group Training Association located within Lancashire, Training 2000 Limited, which is the largest GTA in England. Training 2000 is also the largest provider of engineering apprenticeships in Lancashire. Other non-college organisations are either private providers, not-for-profit, or third sector. In 2013/14 there were 25,230 ‘learner starts’ in Advanced Manufacturing related subjects (Science, Engineering and Manufacturing Technologies’ and ‘Science and Maths’) at FEIs (through education and training courses, community learning and workplace learning) and 2,090 apprenticeship starts in engineering and manufacturing technologies. Of the apprenticeship starts there were 1,330 achievements. The majority of starts are at intermediate level, accounting for 62% followed by 38% advanced and 0.3% higher level. The average qualification success rate for apprenticeships studying engineering and manufacturing technologies was 67% which is higher than the overall success rate for apprenticeships in Lancashire (65%).2.4 Critical issuesThe critical issues facing the skills needs of the advanced manufacturing sector can be summarised as follows:Ageing of the workforce and replacement demands are driving the need for forward-facing recruitment strategies. In particular the sector needs to widen its appeal to young people entering the workforce and to provide clear career paths and progression pathways; New technology is changing the shape of demand for skills and there is a need to ensure support structures are in place to enable the sector to embrace technological change to enhance their competitive position and facilitate innovation; Ability of Lancashire’s business base to attract highly skilled employees, particularly in technical areas and in leadership and management positions, to meet current and future skill needs. This highlights the need for the Lancashire skills system to provide this calibre of supply but also the importance of the wider housing/culture/transport offer of Lancashire to attract and retain talent to meet sector needs; Ensuring a sufficient supply of provision (by level and course type) to meet employer demands in the sector. There is a need for a coherent and responsive model of provision which is collaborative and offers a strong core of provision as well as meeting specialist requirements; Ability of Lancashire’s advanced manufacturing sector to embrace supply chain opportunities and ensure they have the world class bidding, delivery skills and growth capacity to be the preferred suppliers. ................
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