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The Progressive Policy Think Tank

Reform to skills system needed to boost Scotland’s job recovery

IPPR Scotland has published a new report, Jobs and Skills in Scotland, which outlines the recovery in employment over the last few years following the recession. It also examines the current attributes of the labour market and how the ‘skills system’ can work to further boost recovery. IPPR Scotland publishes today’s report in partnership with JPMorgan Chase’s New Skills at Work programme.
The report looks at the skills system in Scotland, which comprises post-16 education, learning and training provision and its interaction with the labour market. The main report findings are:

Between 2010-2015 around 118,000 new jobs have been created, but recovery is weaker in Scotland than the UK as a whole

  • In Scotland’s skills system there is a clear mismatch. It does not adequately focus on current or future demand. We estimate that there are 29,000 more entry-level vacancies at mid-skill level than there are qualifiers
  • Pay and productivity rates in Scotland are catching up with the UK as a whole
  • Scotland has the lowest rates of career progression in the UK (from low-skill to higher skill employment)
  • Reform is needed to better focus the skills system on increasing progression, productivity and tackling in-work poverty.

The report further finds:

  • New jobs in Scotland been evenly distributed between services and manufacturing unlike in the UK as a whole. In Scotland 54% of new jobs are in the service sector compared to 87% of new jobs in the UK
  • Youth employment has been, and remains, consistently higher in Scotland than UK as a whole – 56.2% youth employment rate in Scotland versus 53.5% in the UK
  • Pay and productivity rates in Scotland have caught up with UK rates - though over the same time UK pay and productivity has stalled.

But there are weaknesses and concerns looking ahead:

  • Scotland’s jobs recovery has been weaker than the UK’s as a whole and Scotland has lost its previous advantage. In 2007, Scottish employment was 73.9 per cent, the UK 72.4 per cent. In 2015, the Scottish rate was 73.1 per cent, the UK rate was 73.5 per cent
  • Career progression rates in Scotland are among the poorest in the UK, and the UK’s record is poor compared to international competitors
  • New jobs in Scotland have been in lower-skill sectors than the sectors that have lost jobs over this time. The number of jobs in Scotland’s important financial and insurance services sector contracted by 9.6% between 2010 and 2015
  • Equally, new jobs in the UK as a whole have been in higher skill sectors than new jobs in Scotland.
  • Overall, the report concludes that reform is required in the skills system to better show its contribution to career progression, productivity and to tackling in-work poverty. In addition, reform may be required that: places learner engagement and employer involvement at the heart of learning; develops new regional approaches which combine budgets and decisions over post-16 education and training in one place; and updates learning practices to ready the skills system for the future labour market caused by demographic and technological change.

This report will form the basis of IPPR Scotland’s forthcoming work to outline potential reforms within the skills system in Scotland over the course of this year.

Russell Gunson, Director of IPPR Scotland, said:

“This report shows that while Scotland has seen a jobs recovery in recent years, there are real concerns looking ahead. Reform is required to make sure the skills system in Scotland is focused on the needs of learners and of Scotland’s economy.

“It’s clear that Scotland needs to be more ambitious than aiming to match the UK economy. When UK pay has been falling in real-terms and productivity has stalled, we need to do more than catch up with the UK, as welcome as that is, we need to go beyond that.

“The skills system in Scotland needs to better show how it contributes to improving rates progression, productivity and in-work poverty. It’s not good enough that if you are currently in a low-skilled job in Scotland, you are more likely to stay in low-skilled employment than in most of the rest of the UK, and many other countries in Europe.

“The SNP rightly signalled they were keen for reform during the election, and through our future work we hope to work across the Scottish Parliament to build support for change that places the skills system at the heart of boosting Scotland’s economy.”

Hang Ho, Head of Philanthropy for Europe, Middle-East and Africa at J.P. Morgan, said:

“A robust skills system is fundamental to any economy, and it is vital that training providers, employers and policy makers have access to the best and most timely data available to inform their decision-making. We believe today’s report is an example of this, and we hope it will be invaluable in shaping skills policy in the future.”


Russell Gunson, Director, IPPR Scotland: [email protected] or 07905 330 195
Ash Singleton, External Affairs Manager, IPPR Scotland: [email protected] or 07887 422 789

Notes to editors:

The full report, Jobs and Skills in Scotland, is available online:

JPMorgan Chase supported the Jobs and Skills in Scotland report as part of its New Skills at Work programme, which aims to identify strategies and support data-driven solutions that help improve labour market infrastructure and develop the skilled workforce globally.