Committee sets out how to get Wales out of a low-skills trap

(Title Image: National Assembly of Wales)

Economy & Infrastructure Committee
Regional Skills Partnerships (pdf)
Published: 10th October 2019

“Our recommendations are designed to give the partnerships a clear, strategic mission that has a strong focus on identifying and breaking low-skill traps. This means a stronger role in demand-side interventions and stimulating employer demand for higher-level skills.”
– Committee Chair, Russell George AM (Con, Montgomery)

Regional skills partnerships are voluntary boards made up of employers, education providers and others to advise the Welsh Government on further education courses and apprenticeships. There are currently three partnerships covering north Wales, south-west & mid-Wales and the Cardiff City Region. They’re funding via the Welsh Local Government Association (WLGA).

1. Wales is trapped in a cycle of reinforcing low skill levels (low-skill traps) and Regional Skills Partnerships might be accidentally encouraging it

Wales faces a productivity gap and this isn’t helped by being stuck in what’s called a “low-skill trap” (above); there’s low demand for highly-skilled workers, which leads to a low-skilled workforce, which limits innovation and productivity which perpetuates the low demand for high-skill workers and so on. It’s one of the main causes of Wales’ relatively low economic productivity compared to the rest of the UK and the “Brain Drain” (See also: State of Wales – The Knowledge EconomyEmployment & Skills and The Welsh Economy: Where’s Wales Going Wrong?).

In 2017, 27% of vacancies in Wales were hard to fill because of skills shortages and under-utilisation of staff was at 9.5%.

The report says some economic sectors simply can’t provide many highly-skilled jobs as they produce what is described as “low specification goods” – even if this work is profitable. The Committee concluded that Regional Skills Partnerships might be reinforcing all of this because they try to supply skills based on local/regional demand in established sectors that don’t require highly-skilled workers.

2. The Welsh workforce holds more higher-level qualifications than ever before, but future skills requirements need to be properly planned for

In 2001, there were near enough equal proportions of the working-age population with no qualifications (21%) and qualifications equivalent to the first year of university/Level 4 (22.1%). By 2018, that’s changed to 7.9% with no qualifications and 38% at Level 4.

Some sectors are expected to grow and increase their share of economic output (particularly IT and construction), while others are expected to shrink (manufacturing, administration and utilities). This is before factoring in the impact of the fourth industrial revolution (automation, big data etc.).

The Committee believes the skills and qualifications system needs to be flexible enough to be changed at short notice to ensure they keep pace with technological and industrial changes. There was also a potential conflict of interest in terms of careers advice, where learners might be nudged towards areas with skills shortages instead of fully developing their individual potential.

3. Regional Skills Partnerships need an overhaul

Based on the evidence they received the Committee set out several actions the Welsh Government and skills partnerships should take, summarised as:

  • Giving (re-branded partnerships) Regional Skills Advisory Boards a clear role in advising the Welsh Government on current and future skills demand, responding to economic shocks and both identifying and dealing with skills shortages.
  • The boards should publish 3-year regional skills and employment reports presenting in-depth analysis to assist further education colleges and alike to make their own decisions and not have priorities set by the Welsh Government (i.e. learner numbers). The boards also have to have their performance properly measured to ensure employers can have confidence that the boards are actually having an impact.
  • General data gathering needs to be improved, drawing on expertise in Welsh universities.
  • Engagement with small and medium businesses needs to be improved.
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