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Skills Assessment January 2016

SDS-1131-Jan16

Aberdeen City and Shire

AcknowledgementThe Regional Skills Assessment Steering Group (Skills Development Scotland, Scottish Enterprise, the Scottish Funding Council and the Scottish Local Authorities Economic Development Group) would like to thank Ekosgen for their highly professional support in the analysis and collation of the data that forms the basis of this Skills Assessment Update.

Skills Assessment 2015 Update: Aberdeen City and Shire

Contents

Introduction 3 What is this report? 3 What has changed in Scotland since 2014? 3 The Aberdeen City and Shire RSA 3

Selected headline indicator changes 4

1 Economic performance 5 Headline summary 5 Gross Value Added (GVA) 5 Productivity 5 Earnings 5 Business base 6 Infrastructure 7

2 Profile of the workforce 7 Headline summary 7 Total employment 7 Employment structure by industry 8 Occupational profile 9

3 People and skills supply 10 Headline summary 10 Population 10 Labour market participation 11 Qualifications and attainment 12

4 Deprivation 12 Headline summary 12 Key messages 12

5 Education and training provision 13 Headline summary 13 Modern Apprenticeships (MAs) 13 School and further/ higher education provision 14

6 Skills mismatches 15 Headline summary 15

7 Looking forward 16 Headline summary 16 Population projections 16 Education provision projections 16 Employment projections 16

8 Conclusions and considerations 17


3

Introduction

What is this report?

This is the 2015 summary Regional Skills Assessment (RSA) for Aberdeen City and Shire.

It has been developed by Skills Development Scotland (SDS) in partnership with Scottish

Enterprise (SE), the Scottish Funding Council (SFC) and the Scottish Local Authorities

Economic Development (SLAED) Group. It updates the 2014 RSA evidence base with the

latest data, refreshing and developing what this means for skills investment planning.

The 2015 RSA areas now align with Regional Outcome Agreement areas. As part of this

realignment, the regional footprint for some RSAs remains unchanged (which applies to

the Aberdeen City and Shire RSA here), whilst for others, there has been some change.

The update is therefore designed to support the SFC and Regional Colleges in negotiating

Regional Outcome Agreements. The update also supports SDS in planning its provision

for individuals and businesses, whilst also helping regional partners with their skills

investment planning.

The 2015 update reports highlight some of the key messages for the regions. They are

summary reports, underpinned by the full data matrix, available at sds.co.uk/what-we-

do/partnerships/regional-skills-assessments. The data matrix has been redesigned to be

more user-friendly, and accompanying guidance on how to use the matrix can be found

alongside the full data matrix.

What has changed in Scotland since 2014?

The economic situation in Scotland has continued to improve in the last year, and the

recovery evident at the time of the last RSA is more firmly established, with rising GVA

and falling unemployment. Against many indicators, Scotland has returned to pre-

recession levels. There continues to be a rise in the participation of women and older

workers, and youth unemployment previously apparent has started to fall. Still, under-

employment remains an issue and productivity growth in Scotland (and the UK) remains

weak and largely consumer-driven.

In policy terms, a new Economic Strategy for Scotland is in place. This puts the 4 ‘I’s –

Internationalisation, Investment, Innovation and Inclusive Growth – as central to the

strategy. Increasing exports continues to be a key policy objective, and the prominence

of Inclusive Growth reflects the desire for a re-balancing form of economic growth.

Innovation, including workplace innovation, continues to be highly important. Investment

continues to be necessary for firms to be successful. Existing strategies and policies also

remain important, including the 2010 Skills Strategy and the 2014 Developing the Young

Workforce - Scotland’s Youth Employment Strategy.

The 2015 RSA update seeks to reflect some of these policy developments. For the first

time the data matrix includes deprivation indicators, and there is greater attention paid to

inequality issues such as age, disability and gender indicators. There is also more detail

on school-level provision, migration, travel to work/study, claimant counts and

employment projections.

The Aberdeen City and Shire RSA

This 2015 RSA update covers the geographic area of Aberdeen City and Aberdeenshire.

Data for the region has been calculated by aggregating the data from the two local

authority areas, although individual local authority data is presented where this illustrates

differences between the two.


4

Selected headline indicator changes

2014 RSA 2015 RSA % change

Economic Performance

Gross Value Added (GVA) (£m) £17,174 (2012) £17,573 (2013) +2.3%

GVA per worker £66,300 (2012) £67,900 (2013) +2.4%

Number of businesses 26,025 (2013) 26,920 (2014) +3.4%

Business births per 10,000 67 (2012) 76 (2013) +13.4%

BERD per head £179 (2012) £201 (2013) +12.4%

Profile of the workforce

Total employment 282,900 (2013) 297,600 (2014) +5.2%

Professional occupations 49,900 (2013) 60,100 (2014) +20.4%

People and skills supply

Total population 484,800 (2013) 489,500 (2014) +1.0%

ILO unemployed 12,900 (2013/14) 10,200 (2014/15) -20.9%

16-24 unemployed 739 (2014) 786 (2015) +6.4%

18-24 unemployed (claimants) 645 (Aug 2014) 640 (Aug 2015) -0.8%

Deprivation

Workless households 20,644 (2012) 19,762 (2013) -4.3%

% of children with free school

meals

n/a 33% (2015) n/a

Education and training

MA starts 2,175 (2013/14) 2,175 (2014/15) No change

MA achievements as % of all

leavers

71% (2013/14) 70% (2014/15) -1 percentage point

Employability Fund starts - 515 (2014/15) -

College provision (headcount) 18,070 (2012/13) 20,238 (2013/14) +7.3%

College provision of HE 22% (2012/13) 21% (2013/14) -1 percentage point

Total Higher Education students 31,830 (2012/13) 30,625 (2013/14) -3.8%

Skills mismatches

% of employers reporting hard to

fill vacancies

12% (2014) (next updated

2016)

n/a

% of employers reporting skills

shortage vacancies

9% (2014) (next updated

2016)

n/a


5

1 Economic performance

Headline summary • GVA continued to rise by 2.3% in the region between 2012 and 2013, 15% of the

national total, largely due to the oil and gas sector.

• Productivity levels remain significantly higher than the Scotland and UK averages,

and have increased at a faster rate in recent years.

• Average workplace earnings in Aberdeen City remain well above Scottish and UK

averages, although this is below average for Aberdeenshire.

• The business base continued to grow at higher rate than nationally, and at 30% of

the total, is dominated by the professional, scientific and technical sector.

• Business Expenditure on Research and Development (BERD) per head continues to

be above the Scottish average.

Gross Value Added (GVA)

Aberdeen City and Shire continues to generate a significant proportion of Scotland’s

output (15%), one percentage higher than the previous year, and this is dominated by the

oil and gas sector which accounts for a third of all output from the region.

The growth rate from 2012 to 2013 (latest data) continued at 2.3%, which pre-dates

uncertainty surfacing in 2015 about the oil and gas sector, given the falling price of oil.

This has not yet fed through to the GVA data.

Productivity

Levels of productivity in Aberdeen City and Shire are above the Scottish and UK averages

and have increased in recent years. GVA per worker as a measure of productivity in the

region was £67,900 in 2013, higher than £66,300 in 2012, 44% higher than the Scottish

average of £47,000 and 33% above the UK average of £51,000. This is largely due to

productivity levels in the oil and gas sector. GVA per worker in the region Aberdeen City

and Shire increased by 38% between 2006 and 2013, faster than the 18% for Scotland and

17% for the UK.

Earnings

Most recent (2014) data shows that jobs in

Aberdeen City, at £632 per week, pay well

above the Scotland average of £519 and the

UK average of £518. Jobs in Aberdeenshire

pay below the average, at £510. These

median full-time worker earnings in the

workplace in both areas have increased

by 3-4% since 2013.

However, those living in Aberdeenshire earn marginally more - £575 per week – than those

living in Aberdeen City - £574. Many in the Shire commute to well-paid jobs in the City. For

median residence-based earnings, both are above Scottish average of £518. This is for

those in full time work.


6

Business Base

There were 26,920 VAT/ PAYE

registered businesses in 2014,

up 3.4% from 2013, higher

than the 2.8% Scotland

increase.

The business base has grown

by 14% between 2010-14,

higher than the 5% in

Scotland and 6% in the UK.

Professional, scientific and technical businesses accounted for 30% of all businesses in

2014, twice the Scotland proportion, and higher than the 29% in 2013.

Business base by sector A’deen City & Shire

Scotland

Professional, scientific & technical 30% 15% Agriculture, forestry & fishing 11% 9% Construction 8% 9%

Retail 7% 11% Business admin & support 7% 6% Production 6% 5% Arts, entertainment, other services 5% 7% Accommodation & food services 5% 9% Health 4% 6% Wholesale 3% 4%

Transport & storage 3% 3% Information & communication 3% 5% Motor trades 2% 3% Property 2% 3%

Education 2% 3%

Finance & insurance 1% 2%

Public admin & defence 1% 1%

Total 26,920 203,760

Source: UK Business Counts

The profile of businesses by size remains similar to Scotland, where 83% of registered

businesses in Aberdeen City and Shire are micro firms employing fewer than 10 people.

Less than 4% employ more than 50. However, those employing more than 250, whilst

less than 1% of the business base, employ 50% of the workforce, similar to the situation

at the Scotland level. There were 110 businesses in Aberdeen City and Shire employing

more than 250. There were 2,840 business births in 2013; 76 per 10,000 population,

almost double the Scotland rate of 40.

Levels of Business Expenditure on R&D (BERD) continues to be above the national

average – at £201 per head compared to £150 per head nationally. There are 310 Scottish

Enterprise account managed companies, up from 267 the previous year and 14% of the

lowland Scotland total (and broadly in line with its share of businesses).

90

100

110

120

2010 2011 2012 2013 2014

Index of Business Base, 2010-14 Source: UK Business Counts

A'deen City & Shire Scotland UK


7

Infrastructure

There are some major planned developments over the coming years. The Aberdeen City

Region Deal involves £250 million of investment from the Scottish and UK Governments

over the next 10 years. Separately, the Scottish Government has promised £254m for key

infrastructure projects in Aberdeen and Aberdeenshire and has also established a £12

million Transition Training fund to help oil and gas workers apply their skills to other

parts of energy industry. The UK Government has announced a £20 million package for

the Oil & Gas Sector. This is in addition to planned partner infrastructure spend, including

local authority capital spend (Aberdeenshire has committed £128m in capital spend for

2015.) which will continue to increase demand for construction, engineering and related

skills.

2 Profile of the workforce

Headline summary • Total employment continued to rise at an increasing rate in 2013 and 2014, and at a

rate above the Scottish average.

• The production sector dominates the employment base, with over 62,000 jobs, many

of which are in oil and gas, although the data will not yet reflect current uncertainty

in the sector in 2015 and associated job losses.

• There was significant employment growth in restaurants, tertiary education and

oil/gas extraction between 2012 and 2014, and a large decline in temporary work.

• Over 60,000 are employed in professional occupations in the region, higher than the

national average.

Total employment

This update provides new employment data for 2013 and 2014. Total employment

continued to rise over the period to 2014 to 297,600. This was at a rate above the

Scotland average – with the rate of growth increasing between 2013 and 2014.

85

90

95

100

105

110

2009 2010 2011 2012 2013 2014

Index of Total Employment, 2009-14 Source: Business Register and Employment Survey

A'deen City & Shire Scotland GB


8

2015 has been a challenging time for the oil and gas sector due to falling oil prices – a

15% drop in the first nine months of 20151. Redundancies in the sector in 2015 have been

estimated at 65,0002 across the UK, of which 10% may be from the region. This may feed

into the data in years to come, and – given the importance of the sector and its supply

chain in the region – there may be repercussions for other sectors too.

Employment structure by industry

In the main, the employment by industry sector

mirrors the business base. However, employment in

the production sector is much higher than its

proportion of the business base, reflecting a small

number of large employers in the sector. More than

20% of all employees, or 62,300, are employed in

the production sector, largely oil and gas, slightly

higher in Aberdeen City than in the Shire – double

the Scotland and UK proportions.

Mining, quarrying and utilities, and professional, scientific and technical continue to be

concentrated in the area, the latter supporting the oil and gas sector. Public sector and

tourism and hospitality sectors remain large employment sectors. Sectoral specialisation

exists for those sectors with a value which is above 100%.

Aberdeen City & Shire region sector specialisation (2014)

Mining, quarrying & utilities 416% Property 88%

Professional, scientific &

technical 201%

Education

84%

Manufacturing 125% Retail 82%

Transport & storage 106% Arts, entertainment, recreation 76%

Wholesale 99% Health 76%

Construction 92% Public administration & defence 68%

Accommodation & food services 91% Information & communication 62%

Business admin. & support

services 91%

Agriculture, forestry & fishing

29%

Motor trades 89% Financial & insurance 22%

Source: Business Register and Employment Survey

The 2014 RSA identifies the top 20 sectors in 2012 (of 616 sectors). The key changes in

these sectors over the 2012-2014 period were the continued expansion of oil and gas and

service employment in restaurants, reflecting continued economic growth. Temporary

employment agency fell significantly however over the two years:

Restaurants (+27%) Temporary employment agency (-48%)

Tertiary education (+26%) Renting & leasing machinery (-14%)

Support for petroleum/ Hotels and accommodation (-9%)

gas extraction (+20%)

In 2013, there were over 100,000 jobs in the Scottish Government identified growth

sectors in the region, the majority being in Energy (37,000) and Financial and business

services (26,000). The region has particularly high specialisation in Energy (490%), and

also specialisms in Food and drink (119%) and Financial and business services (106%).

1 http://www.bbc.co.uk/news/uk-scotland-scotland-business-34193720 2 ibid


9

The region is under-represented in Sustainable tourism (80%) and Creative industries

(79%).

Of the total £1.7m Regional Selective Assistance awarded to businesses in the region

between 2011 and 2014, the vast majority (£1.4m) has been awarded to firms in

Aberdeenshire, and in the energy sector. These grants are estimated to have

created/safeguarded some 210 jobs in the region.

Occupational profile

The occupational profile in Aberdeen City and Shire is broadly similar to that of Scotland,

although a greater share of the workforce is employed in professional occupations. In

Aberdeen City this is a quarter of all those in employment, and it is one in five in the

Shire, although here it is in line with Scotland and UK average.

The City employs more in services and in the Shire there are more employed in skilled

trades. The number of process, plant and machine operative jobs in Aberdeen City

continues to fall. Half of these jobs have been lost or moved out of the City since 2005

and the trend continued in the last year. The previous RSA cited growth in several

occupations since 2005 (notably managers/senior officials; caring, leisure and other

services and in professional occupations). For the latter, strong growth continued

between 2013 and 2014.

0% 5% 10% 15% 20% 25%

Managers, Directors & Senior Officials

Professional Occupations

Associate Prof & Tech

Administrative and Secretarial

Skilled Trades Occupations

Caring, leisure and other service occupation

Sales and Customer Service

Process, plant and machine operatives

Elementary occupations

Occupational Profile, 2014 Source: Annual Population Survey

A'deen City & Shire Scotland


10

3 People and skills supply

Headline summary • The population continues to grow, at over double the Scotland rate of growth over

the last decade, with the largest increases in 20-34 year olds.

• The employment rate remains higher in the region than in Scotland, although the

differential is less pronounced in Aberdeen City,

• Unemployment fell between 2012/13 and 2014/15. The number of young people out

of work and not in education or training are well below 2013 levels.

• Around 40,000 in the region are work-limiting disabled, although the proportion of

the workforce this represents is below the Scotland average.

• The proportion of school leavers in the region entering Higher Education increased in

the year to 2013/2014. More also have high level qualifications than in Scotland and

the UK.

Population

Any recent concerns over the future of the oil and gas sector have also not yet been

translated into the data on population trends, and it is unclear whether this is likely to

happen in the future. The Aberdeen City and Shire population has continued to grow in

recent years.

At an estimated 489,500, the 2014 population was a further 1% higher than 2013,

showing an 11% increase from 2004. This compares to 5% growth in Scotland and 8%

growth in the UK over the same period.

The largest increases have been those aged 20-34 (of more than 20%), where this has

been a static picture in this age group in Scotland. There is a reasonable level of churn in

the population and 40,000 have left the area over the 10 year period, although population

has increased overall.

90

95

100

105

110

115

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Index of Total Population, 2004-14 Source: Mid-Year Population Estimates

A'deen City & Shire Scotland UK


11

Labour market participation

In 2014, employment rates for Aberdeenshire and Aberdeen City were 81% and 78%

respectively. In 2013 the gap between the region and the Scottish average was the

greatest it had been since 2005 (8.3 percentage points). For Aberdeenshire the rate

remains eight percentage points above the Scotland average of 73%, although at five

points the gap is narrower in Aberdeen City. Nonetheless, in 2014 the region continues to

be characterised by a tight labour market.

76% of jobs in the region are full time, marginally higher

than 74% in Scotland. Jobs in Aberdeen City in particular

are also less likely to be part time positions. 78% of jobs

in the City are full time, with just 22% part time. The

proportion of part time jobs in the city is lower when

compared with 26% in Scotland and 25% in

Aberdeenshire.

In 2012/2013 there were 11,400 ILO unemployed (those out of work and actively seeking

work), and this decreased to 10,200 in 2014/2015, although there had been an increase in

the intervening year. The ILO unemployment rate in 2014/2015 was 4% in both Aberdeen

City and Aberdeenshire, compared to 6% in Scotland and the UK.

In 2015 there were 786 unemployed young people aged 16-24 in the region, up by 6%

from the previous year. There were 640 young people aged 18-24 out of work and

claiming Jobseekers Allowance (as of August 2015). There were also 840 young people

described as Not in Employment, Education or Training in 2014. This has fallen by 40%

since 2010, in line with the Scottish average. The rates at 4.0% in Aberdeen City and 3.6%

in Aberdeenshire are lower than the 6.4% average across Scotland.

In all, 13% of all those aged 16-64 in Aberdeen City and 12% of those in Aberdeenshire

are work-limited through disability, lower than the 15% in Scotland and the UK. However,

this still indicates that some 40,000 people in the region are work-limited through

disability.

Travel to work distances are broadly similar to the national averages. One in ten works

from home (11% nationally) and 14% travel less than 2km (13% nationally). 15% travel

more than 20km, compared to 13% nationally.


12

Qualifications and Attainment

There was an increase in the proportion of school leavers

entering Higher Education in 2014/2015, 38% of the total, up

from 37% in 2013/2014. The proportion entering Further

Education, at 30% continues an upward trend from previous

years. Just over a third (22%) entered employment, and this

has remained broadly constant. The proportion of those

unemployed (seeking or otherwise) increased slightly to 6%

in 2014/2015. In all, 94% went into a positive destination,

compared to 93% at the Scotland level.

6% of those aged 16-64 years in Aberdeen City and Shire have no qualifications; in

Scotland and the UK this is 9%. Fewer also have lower level of qualifications – 7% in City

and 9% in the Shire, compared to 11% in Scotland and 12% in the UK. By contrast, more

have high level qualifications (at SCQF 7-12). This is 47% in Aberdeen City and 43% in

Aberdeenshire, compared to 41% in Scotland and 36% in the UK – reflecting the high

level of those in professional occupations.

In terms of 16-24 year olds, just 3% have no qualifications in the region, compared with

7% of this age range in Scotland. In contrast, a larger proportion of young people have

high level qualifications in the region than nationally – 30% versus 24%.

4 Deprivation

Headline summary • Average household earnings throughout the region are higher than those nationally.

• However, there are still some 20,000 workless households in the region.

• The proportion of school pupils entitled to free school meals is lower than Scotland,

particularly so in Aberdeenshire.

The 2015 data matrix includes data on deprivation for the first time. This affects both

labour market supply and the skills support needs of individuals. On the whole, Aberdeen

City and Shire is more affluent than the national average, yet this masks concentrations of

residents on low incomes and some quite high numbers suffering relative deprivation.

Key messages

7% of households in Aberdeen City, and 9% of those in

Aberdeenshire have average household earnings of less

than £10,000 per year, compared to 13% across Scotland.

By contrast, 43% of households in Aberdeen City have

incomes above £30,000, as do 44% in Aberdeenshire,

compared to 31% across Scotland.

13% of households in Aberdeen City and 11% in Aberdeenshire are workless households,

compared to 20% in Scotland, and 17% in the UK. Still, this equates to some 20,000

workless households in the region (2013), a number which has decreased from over

22,000 in 2011.


13

The employment domain of the latest (2012) Scottish Index of Multiple Deprivation

(SIMD) provides further information on employment deprivation. 3% of the region’s 568

datazones (18) are in the 15% most deprived datazones in Scotland. Of these 18

datazones, 14 are in Aberdeen City and 4 in Aberdeenshire. Whilst there are

concentrations of unemployment, these are far less widespread than in other parts of

Scotland.

In all, 33% of those at school in the region are entitled to free

school meals, below the national average of 39%. In Aberdeen

City this is 37%, while in Aberdeenshire the proportion is lower,

at 31%.

5 Education and training provision

Headline summary • The number of MA starts in the region remained the same in the last year, with

engineering, hospitality and freight logistics being the most popular frameworks.

• There were over 20,200 FE students at North East Scotland College in 2013/14, an

increase on the previous year, with engineering and business studies the most

common courses taken. 21% of these students were studying HE at college.

• 30,600 students were studying at Higher Education Institutions in the region in

2013/2014, a 4% fall from the previous year, and two thirds are from outwith the

region.

• There were nearly 10,000 graduates from the region in 2013/14, and although slightly

lower than the previous year, this is still 12% of all Scotland graduates. Two thirds of

these went into full-time work and one in 10 into the mining/quarrying sector.

Modern Apprenticeships (MAs)

There were 2,175 MA starts supported by SDS in 2014/2015, the same as in 2013/2014.

There were 920 starts in Aberdeen City (910 the previous year) and 1,255 in

Aberdeenshire (1,260 the year before). Almost two thirds of these starts were male

(64%) and just over a third female (36%). There were 2,320 leavers in 2014/2015.

The most popular frameworks for starts were in engineering (330), hospitality (275),

freight logistics (210), business and administration (150), retail (125) and automotive

(115), social Services: children and young people (115) and building construction (110).

Some of these remain dominated by one gender or the other, including automotive and

building construction (male) and social services: children and young people (female).

Engineering too remains dominated by males, although in other sectors, such as

hospitality, there is more of a gender balance.

In all, 62% of MA starts in Aberdeenshire in 2014/2015 were 16-19, compared to 46% in

Aberdeen City, which has an older profile of MA starts. The average in Scotland is 53%.

Achievements at 70% in 2014/2015, as a percentage of all leavers, were lower than the

previous year at 71%, with an achievement rate 70% in Aberdeen City and 71% in

Aberdeenshire. The rates in the region in general, however, have risen over the last five

years.


14

Employability Fund (EF)

The EF supports a range of interventions to support employability. There were 515 EF

starts in 2014/2015 (295 in Aberdeen City and 220 in Aberdeenshire). Almost four in five of

these (77%) were male, higher than the 63% in Scotland. EF starts are typically older than

the Scotland average.

Within this, there were 100 starts on the Certificate of Work Readiness (CWR), the new

national work placement and class-based Award, involving up to 50 employers.

School and Further/ Higher Education provision

School provision

For the first time the data matrix provides information on school provision. There were

23,131 pupils enrolled at secondary school across the region in 2014, 26% of whom were

S5 and S6, a little lower than the 29% across Scotland. The school roll is projected to fall

slightly until 2017 (by around 2%), before rising again in 2018. Across Scotland, the trend

is for a 2% fall over the period to 2018.

College provision

College provision is via the North East Scotland College (formed from the merger of

Aberdeen College and Banff and Buchan Colleges in 2013/2014). 89% of Aberdeen City

and Shire residents who are at college study locally.

20,238 students (headcount) were studying at North East

Scotland College in 2013/2014, up from 18,070 in

2012/2013. 79% of this was at FE level, 21% at HE level. In

all, 21% were from outside the region, up from the 19% in

2012/2013. A higher proportion than the national average

are aged under 20 (as was previously the case). As in

2012/13, a higher proportion aged 16-19 are on full time

courses.

53% of college students in the area are female; overall just 5% are from the most deprived

10% - (compared to 16% in Scotland) – reflecting the relative affluence of the area.

Engineering (15% of courses) and Business management and Administration (13%) were

those most taken up, both above the national average and higher than in 2012/2013. Full

time care is the third most popular choice (10%) although below the 12% nationally.

These include full time and part time courses.

University provision

In all, 30,625 students (headcount) were studying at the three Higher Education

Institutes (HEIs) in the region in 2013/2014 (University of Aberdeen, Robert Gordon

University and the Aberdeen Campus of the Scottish Agricultural College). This was a fall

of 4% on the previous year, and there has been a small downward trend in student

headcount since 2009/2010. 31% of these students were from within the region, compared

with 32% in 2012/13, reflecting that these are national institutions. A slightly higher

proportion than the national average are aged over 25 (36% compared to 34%).


15

Overall, 43% of HEI students in the area are female, a similar proportion to the national

average. Business and administrative studies (15%), Medicine (15%), and Engineering

(9%) were the most popular courses in 2013/14.

Graduates

There were 9,961 graduates from Aberdeen City and Shire in 2013/14, down from 10,020

in 2012/2013, although this remains 12% of all graduates from Scotland’s HEIs. This

included 6,510 graduates with a first degree, and a further 3,402 postgraduates (34%).

Six months after graduating, two thirds of graduates were in full time work (66%), more

than the 61% nationally and higher than the previous year. A further 8% were in part time

work, 15% were in further study and 8% working and studying. Just 3% were

unemployed, lower than nationally (5%).

Aberdeen City and Shire graduates were most commonly employed in the public sector -

human health and social work (16%) and education (13%) – as was the case nationally.

One in 10 was however employed in mining and quarrying (10%), compared to 2%

nationally – reflecting the predominance of the oil and gas sector.

6 Skills mismatches

Headline summary • Seven in 10 employers in the region had recruited 2-3 years prior to the survey.

• FE/HE leavers in the region are deemed more work-ready by employers than the

national average, although this is the reverse for school leavers.

• Employers were more likely to report vacancies than the Scottish average, including

those hard to fill (double the national average) or skills shortages.

• Skills gaps are most likely in care, leisure and customer services.

There is no new data on skills mismatches beyond that presented in last year’s RSA,

given that the survey is undertaken every two years. The key messages to re-emphasise

are:

70% of employers in Aberdeen City and Shire had recruited in the 2-3 years prior to the

survey, and 28% had taken on leavers from Scottish education institutions (both above

the Scotland averages).

Of those recruiting leavers, 89% of those from universities were regarded as well or very

well prepared for work, and 77% of those from colleges. However, 60% of school leavers

were regarded as well or very well prepared for work, below the national average of 65%.

Of those reported to be poorly prepared, the main reasons cited are a lack of world/ life

experience, poor attitude or lack of motivation or lack of required skills or competencies.

Employers in the region were more likely to report current vacancies than the Scotland

average (24%, compared to 15%); more hard to fill vacancies (12% compared to 6%

nationally) and skills shortage vacancies (9% compared to 4%).

Almost a quarter of Aberdeen City and Shire employers (24%) reported that not all of

their staff are fully proficient, above the average for Scotland of 19% - with skills gaps

most likely in care, leisure and other services, and in customer service occupations.


16

Aberdeen City and Shire has high concentrations of employment in energy and in food &

drink. Skills Investment Plans have been produced for these sectors and also financial

services and tourism in Scotland, highlighting a series of priority actions to address

current and future skills gaps and shortages. In addition, the publication of a Skills

Investment Plan for Aberdeen City and Shire is imminent.

The Skills Investment Plans can be found here:

sds.co.uk/what-we-do/partnerships/skills-investment-plans/

7 Looking forward

Headline summary • The population of the region is forecast to continue to increase, by almost 45,000 and

9% to 2024, faster than Scotland and UK growth rates.

• The greatest increases are forecast for those of retirement age, although school roll

numbers are also set to increase in the next five years when they are falling at the

Scotland level.

• Employment growth is also forecast, of more than 5% to 2022 at a national level,

with the proportion growing fastest in Information technology and health and social

work.

Population projections

2012 based-projections indicate that the population of

Aberdeen City and Shire is forecast to increase by 44,842

over the 2014-2024 period; an increase of 9%. This

outpaces project growth of 5% at the UK level, and a 4%

rise at the Scotland level. However, it should be noted that

these predictions do not take into account recent

developments in the oil and gas sector.

The largest increases are expected in those of retirement age, where there is anticipated

to be a 28% increase in those aged over 75 (in line with the national average) and a 24%

increase in those aged 65-74 (above the national average). This may have implications for

the region in terms of pressure on health and social care services. There is, however, an

increase projected in all ages, except for 16-29 years.

Education provision projections

As the summary indicates, the school roll is projected to fall slightly until 2017 (by around

2%), before rising again in 2018. Across Scotland, the trend is for a 2% fall over the period

to 2018.

Employment projections

There is no new data on employment projections since the last RSA. Based on 2012

figures, national employment figures are projected to rise by 5.3% between 2012 and

2022, with the fastest increases occurring between 2017 and 2020.

The sectors with the largest projected employment growth over the period are

information technology (32%), health and social work (17%), real estate (14%) and

electricity and gas, finance and insurance and construction (all 13%). However, again, this

data does not take into account recent developments in the oil and gas sector.


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There is, however, projected to be considerable fall in agriculture employment (-15%),

other manufacturing (-12%), public administration (-11%) and mining and quarrying (-

10%). The expected decline in agriculture and, more importantly mining/quarrying, could

have severe implications for employment in Aberdeen City and Shire.

8 Conclusions and considerations

The 2015 RSA update indicates a continuing growth in the Aberdeen City and Shire

population and labour market. The data in the most cases covers the period up to 2014,

especially economic performance, and so the recent challenges in the oil and gas sector

with falling oil prices is not reflected in the data. Any diminution in the oil and gas sector

will have profound effects. Much of the service sector employment, including the tourism

and hospitality sectors, are also buoyed by the sector.

The success of Aberdeen City and Shire since the recession has resulted in a tight labour

market, where employment rates are well above average, and till 2014, increasingly so.

The success of the economy however causes some problems for employers in terms of

recruitment, and there are challenges in raising participation rates any further.

Nonetheless, and whilst much lower than the Scotland and UK averages, there remain a

significant number of workless households and those work limited through disability in

the area, and concentrations of employment deprivation. There is a continuing need to

help school leavers meet employer expectations, with Awards such as the Certificate of

Work Readiness improving work readiness. The challenges of raising participation further

is reflected in the continuing improved performance of young people.

There remains therefore a challenge for the supply of skills to match demand. MA starts

have levelled off, although achievements in 2014/2015 matched those of the previous

year. Engineering and Business and Administration are the most popular College courses

and amongst the most popular MAs, yet the flow of those into employment in certain

sectors is unlikely to satisfy demand. Skills gaps were – and are likely to continue to be –

apparent, notably in care and other customer service occupations.

Further population and employment growth is predicted, including amongst those of

retirement age. There will be a requirement to meet the needs of older people. The new

City Deal investment promises further demand for construction and related skills in what

has already been a tight labour market.

The success of the oil and gas sector in recent years has meant that there has been

increased pressure to meet employer demand from this and relates sectors. It is too

early to tell whether the recent fall in oil prices will take some of the heat out of the

Aberdeen City and Shire economy, which will create its own problems (through job

losses) should the effects be ongoing.

What remains clear is that, as an economic region, there continues to be a need to focus

on diversifying the employment base, and increasing exports, including sector expertise,

to reduce reliance on locally dependent oil and gas jobs. The supply of regional skills

should help support this process.


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Some key considerations arising are therefore:

• What should the response be to any contraction in the oil and gas sector, when

the success of the sector has been a driver of high employment rates and high

skills demand?

• To reduce reliance on the oil and gas sector, how can the supply of skills help

create a better industrial employment mix and a more diversified business and

employment base?

• How can the region best maximise the benefits arising from the significant

Scottish and UK Government investment in the next 10 years? What skills will be

required and how can these skills needs be best met?

• How can employment rates increase further when there is already a tight labour

market? How can participation in the labour market be extended further? Is there

more that can be done to help those more disadvantaged in the region?

• How can the gender domination in certain College/MA subjects be overcome

when this has persisted over time?

• How can skills shortage and hard-to-fill vacancies be filled – and is enough being

done to take account of expansion and replacement demand – particularly in

construction, energy and engineering? Is there sufficient throughput of young

people into the care and customer services?

aberdeen city and shire - skills development scotland€¦ · jana 2016 sds-1131-jan16 aberdeen...

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