[Skip to content]

South West Observatory
Search our Site
South West Observatory
.

Rebalancing the economy an ‘uphill battle’ across South West, but training and new skills key to jobs growth

> News Release: Wednesday 02/11/2011, South West Observatory

> Contact: Andy Dunne, Communications Officer, 07811349720
Analysis published today by the South West Observatory points towards an ‘uphill battle’ to rebalance the local economy and only ‘modest prospects’ that jobs for the region’s unemployed will come from the private sector. But for a part of the country that has been heavily dependent on the public sector for employment, the report suggests that skills and re-training are critical to ensure local people can take advantage of future job opportunities. 

The two papers, compiled by the Economy Module and Skills & Learning Module of the South West Observatory, set the economic context for South West areas, the prospects for private sector jobs growth and the implications for employment and skills. Both reports will be launched at an event in Taunton on Wednesday 2 November. 

Commenting ahead of the launch, Nigel Jump who leads the Economy Module of the Observatory said:

"The renewed slowing of the South West economy in 2011 has made the process of economic rebalancing more problematic.  In terms of trends, opportunities and threats, these reports highlight what that might mean for private sector jobs creation in the years ahead."

Using the latest economic projections and growth scenarios, the Economy report suggests that the private sector seems unlikely to be able to take up the slack left by unemployment from the public sector – at least in the short to medium term. The South West is heavily dependent on the public sector with 74% of total growth in employment between 1998-2008 being in public services. Since the recession the South West has seen the largest declines in public sector employment in the UK (owing, in part, to the large growth in the previous decade). 45,000 public sector jobs have been lost in the South West and significantly more may go over the next four years.  

Yet with major job losses in the public sector and high levels of youth unemployment, the reports highlight two major challenges for policy makers. On recruiting those from the public sector into new jobs in the private sector, perceptions exist on both sides of a skills mismatch: evidence from the recruitment sector shows that businesses planning to create new jobs in 2011 may be reluctant to recruit ex public sector employees due to perceived lack of skills. This mirrors a perception common among public sector workers who fear they lack the necessary skills to work in the private sector. For young people not in education or training, despite apprenticeship numbers having increased across all Local Authorities (less so in Dorset), pressures continue and prospects for the long-term employment remain bleak.

Against this backdrop, the skills report suggests that for new Local Enterprise Partnerships and others driving through the government’s aim to rebalance the local economy, there are high returns to be had for interventions which support education, people and skills, including specific targeting of applied science at degree level and life-long learning opportunities to respond to changing areas of work. 

Both reports ‘Prospects for Private Sector Jobs Growth in South West England’ and ‘Private Sector Jobs Growth: Implications for Employment and Skills’ will be accessible via the South West Observatory website from 9am on Wednesday 2 November – www.swo.org.uk .

> The South West has 136,700 fewer jobs today than it did at the start of the recession.

> The South West has traditionally been heavily dependent on the public sector for jobs: between 1999-2009 approximately 56% of all jobs were added in the public sector. Since 2009, employment in the public sector has declined from 553,000 to 508,000.

> Swindon, Wiltshire and Gloucestershire LEP areas recorded the largest falls in the number of vacancies in September 2011, 40% to 44% fewer than in September 2007. The West of England LEP recorded the smallest fall, at 20%. Falls in other LEP areas in the South West were closer to the regional / UK average (29%), Cornwall and Scilly (35%), Dorset (32%) and the Heart of the South West (31%).

> In the South West, there are on average 3.6 Jobseeker’s Allowance (JSA) claimants for every job vacancy registered.

> Currently those with no qualifications are almost four times as likely to be unemployed as those with degree-level qualifications and competition for low skilled work is most fierce.

> The Coalition government has set out its fiscal plans for the current parliamentary period to 2015-16. The fiscal retraction will lead to inevitable job losses in the public sector. According to the latest estimates from the Office for Budgetary Responsibility (OBR) there will be a reduction of 310,000 general government jobs between 2010 – 2015, with a further 90,000 forecast for 2015-16.

> The strongest growth in occupations has come from skilled agricultural trades, caring personal service occupations, health and welfare associate professionals and leisure and other personal service occupations.

> Compared to other English regions, the South West is noteworthy for its combination of low volume and low proportion of young people not in employment, education or training (NEET), although Plymouth, Bristol and Devon have relatively large volumes and high rates of NEETs.

> The number of vacancies fluctuate from month to month but is currently one-third lower than pre-recession levels. Some parts of the region have seen a much greater contraction in vacancies than others.

> Almost two-thirds of vacancies notified to Jobcentre Plus were in low/unskilled occupations. While high skill occupations comprised a relatively small proportion of notified vacancies, they (along with personal service occupations) were the only to record an increase over the past four years.

> Research for the FT found that over half (57%) of private sector businesses were unwilling to take on redundant public sector workers. 52% of these believed they were ‘not up to the job’. Research by Badenoch & Clark (October 2010) found that more than half of public sector workers (56%) feared they lacked the appropriate skills to do so. This also found that workers from local government were the most concerned that their skills would not help them get a job in the private sector.

> The effects of recession have made it much harder for young people to establish themselves in the labour market – although unemployment among 16-24 year olds has fallen in the last year to 14.7% (and is lower than the England average) this remains well above the overall unemployment rate for the working age population (6.2%).