As the economic powerhouse of Scotland (UK), the Glasgow City Region has successfully attracted large national and multi-national firms and many high-skilled workers in recent decades. Yet, the region faces longstanding challenges, e.g. related to productivity and high inactivity rates, and new ones, e.g. rising labour shortages. This OECD review analyses how the skills and employability systems in the Glasgow City Region can be used to overcome these challenges. This first chapter provides policy recommendations for the region, its Local Authorities, and the Scottish and UK Governments. The recommendations focus on three areas: i) strengthening re- or upskilling opportunities, ii) enhancing the labour market inclusion of the economically inactive, and iii) facilitating school-to-work transitions for vulnerable youth.
Future-Proofing the Skills System in the Glasgow City Region (Scotland, United Kingdom)
1. Assessment and Recommendations
Abstract
The Glasgow City Region needs to further develop its adult skills system to raise productivity and strengthen labour market inclusion
The Glasgow City Region (GCR) is one the largest city regions in the UK, composed of eight out of the 32 Local Authorities (LAs) in Scotland and home to around one-third of the Scottish population. With a population of over 1.8 million people, GCR is home to almost one-third of Scotland’s population. The region also accounts for a third of Scotland’s economic output, generating GBP 53 billion Gross Value Added in 2022. The city region was established as part of the Glasgow City Region City Deal in 2014 – an agreement between the Scottish Government, the UK Government and the eight LAs - designed to bring long-term strategic approaches to improving the regional economy. Although the city region concept is relatively new in Scotland, significant steps have been taken in GCR to create a regional economic system based on close cooperation between the LAs.
The Glasgow City Region is an integrated economic area with many residents commuting to a different Local Authority to work. GCR covers eight LAs: East Dunbartonshire, East Renfrewshire, Glasgow City, Inverclyde, North Lanarkshire, South Lanarkshire, Renfrewshire and West Dunbartonshire. Together, they comprise a coherent labour market. In 2021, two-thirds of the residents of GCR worked in their Local Authority of residence, and 16% commuted to Glasgow City for work.
Low productivity, high economic inactivity and poverty are long-standing challenges in the Glasgow City Region. Workers in GCR are only 91% as productive as in the UK, measured as Gross Value Added (GVA) per hour worked. The gap narrowed from 87% in 2004 to 93% in 2015, but it has recently started widening again. At the same time, a significant part of the population remains outside of the labour market in economic inactivity. Around 1 in 4 people (25%) aged 16 to 64 were economically inactive in GCR in 2023, higher than in many UK and OECD cities. Over 14% of the inactive wanted to work, representing a resource the region could tap into in a tightening labour market. Lastly, poverty is a significant challenge in the region. At the time of writing, the three most income-deprived councils of Scotland are located in GCR and in Glasgow City, almost 1 in 5 people, or 19%, live in income deprivation.
A more recent challenge faced by the Glasgow City Region is increasing skills shortages. The unemployment rate in GCR has decreased in recent years, reaching a record low of 3% in 2023. This is low compared to other major cities in the UK (e.g. Edinburgh and Manchester) and metropolitan regions (e.g. Brussels, Madrid, Paris, Stockholm and Rome). Moreover, there has been a large increase in online job postings in the last two years and the labour market in Glasgow City and the surrounding areas have tightened (i.e. there are more job positions available than unemployed workers willing and able to fill them). At the same time, the region has a high concentration of educational institutions, and its population ranks second in the UK regarding the share of individuals with tertiary degrees. Yet, in stark contrast, the share of those with no qualification remains high compared to the UK and Scottish average, and educational attainment is low in many of the income-deprived areas in the region.
Ongoing global megatrends such as the green and digital transition and demographic changes could be held back by high skilled labour shortages. Glasgow City has committed to becoming a net zero-carbon city by 2030. This ambition is part of a broader journey of the city and the rest of the region to transition from being one of the great industrial places in the world to transition to a circular and carbon-neutral city. Digitalisation and automation also impact the regional labour market and the demand for skills. Over the last decade, the number of tech businesses has grown three times as fast as the total number of companies in Scotland. Investment in skills is needed to ensure that these transitions are not hampered by labour and skills shortages.
The skills system in the Glasgow City Region represents a significant part of the solution to changing labour markets and can help to raise productivity and reduce inequality. In a rapidly changing labour market where jobs and companies continually evolve, the skills system has become more critical than ever. Adult learning provides opportunities for individuals to acquire or upgrade their skills, enter new career possibilities and become more competitive with high-skilled workers. For employers, adult education and training can be a way to reduce skills gaps and shortages and strengthen their productivity. Adult learning combined with solid employment support can also help address various societal challenges, such as in- and out-of-work poverty, inequality, and economic inactivity.
This OECD review of the Glasgow City Region comes at a time of ongoing reforms in Scotland’s education, skills, and economic policy environment. The policy landscape for skills and employment in Scotland has changed significantly over recent years and continues to evolve. Ongoing discussions on post-school education and skills reforms build on several reviews commissioned by the Scottish Government, including the compulsory education system, the post-school learning system, the tertiary education sector, career guidance, and the qualifications and assessment system. In line with studies such as Fit for the Future: Developing a post-school Learning System to Fuel Economic Transformation and international examples, e.g. from Denmark, England, Finland and Ireland, this review also calls for stronger flexibility at the regional and local levels to align and coordinate skills provision to employer needs.
What are the policy opportunities for the Glasgow City Region to future-proof its skills system?
This OECD report reviews three of the most pressing challenges facing the Glasgow City Region. Building on an in-depth analysis of the region and drawing on insights from other OECD countries and regions, this report offers recommendations for GCR to i) strengthen re- and upskilling opportunities for individuals in work and align skills supply with demand, ii) enhance labour market inclusion of the economically inactive and iii) strengthen youths’ school-to-work transitions.
While the report's primary focus is the Glasgow City Region, it covers the broader skills and employability policy landscape in which the Scottish Government, the UK Government and Scottish Local Authorities play vital roles. Adult skills policies and parts of employment services are devolved from the UK Government to the Scottish Government. Within Scotland, adult skills policies are provided mainly through further and higher education institutions and independent providers remain relatively centralised, with funding levels and targets set by Scottish Government national agencies. Local Authorities, however, play an essential role in providing employability services and adult learning opportunities for those furthest from the labour market. In between is the regional level, which is not an elected government level in Scotland. Yet, with city regions, a new level of coordination of policies and programmes across Local Authorities has been established. It is within this broader policy framework that the review of GCR takes place.
Recommendations for strengthening re- and upskilling opportunities
The demand for changing skills is not translating into growth in adult learning. Recent analysis suggests that in 2030, 94% of the UK workforce will need to re- and upskill (Allas, Fairbairn and Foote, 2020[1]), equating to around 839 000 workers within the GCR alone. Yet, participation in adult learning in GCR (at 9% of the 25-64-year-olds in 2023) is below the UK and Scottish averages (both at 11%) and lower than in many large EU cities (Figure 1.1). These figures are even lower for people in low and medium-skilled jobs.
Figure 1.1. Adult participation in education and training in the Glasgow City Region is low in international comparisons
Participation in education and training in the last four weeks, 25-64-year-old
Note: Panel A shows NUTS2 regions where cities are located. Data for Glasgow City Region are a weighted average of data for Glasgow City, East Dunbartonshire, East Renfrewshire, Renfrewshire, Inverclyde, West Dunbartonshire, North Lanarkshire and South Lanarkshire. The participation measures cover participation in formal and non-formal education and training.
Source: OECD’s calculations based on NOMIS [Annual Population Survey] for UK data and Eurostat [trng_lfse_04] for the remaining data.
The Scottish adult skills system remains relatively centralised and leaves little room to align training provision to regional and local needs
Within Scotland, the skills system remains relatively centralised, with strong national influence on funding allocations and the content of provision. The Scottish Government’s remit in the skills area is extensive, covering preschool, primary, secondary, further, and higher education, work-based learning, vocational training programmes such as apprenticeships and community-based learning. Adult skills programmes are coordinated and managed through four national skills agencies: the Scottish Funding Council, Skills Development Scotland, the Student Awards Agency for Scotland and the Scottish Qualification Authority. These national agencies have a strong influence over funding allocations locally, the content of provision, and patterns and volumes of participation in training.
There are various mechanisms to support re- and up-skilling for adults within the Scottish skills system, which involves different providers and funding streams. Re- and up-skilling activities are provided mainly by colleges, universities and independent training providers. These activities cover academic routes through further and higher education and work-based learning, including apprenticeships and vocational qualifications such as Scottish Vocational Qualifications. Funding for colleges and universities is allocated annually through outcome agreements managed by the Scottish Funding Council. Apprenticeship funding is divided between the Scottish Funding Council and Skills Development Scotland. While the core funding for colleges, universities, and apprenticeships leans towards provision for younger learners, there are examples of re- and up-skilling programmes for adults.
More distinct and specialised adult learning options are provided locally through the No One Left Behind employability programme and Community Learning and Development activities. Scottish LAs offer these activities as a supplement to the core provision from colleges, universities, and independent providers. With an emphasis on vulnerable groups, they focus on providing basic skills and broader personal and social development.
Devolution of responsibilities for skills planning and delivery may be an option to align skills supply with demand in Scotland
While the Glasgow City Region's primary responsibility is implementing the City Deal, the importance of skills in supporting economic development is increasingly recognised. Since its establishment, the primary purpose of the GCR has been and still is to implement the City Deal, which focuses on investment in regional infrastructure, research, and business innovation but not directly on skills policies. To this end, a comprehensive regional governance structure has been established, with the Glasgow City Region Cabinet as the ultimate decision-making body. However, not least through the Regional Skills Investments Plans from 2016 and 2019 and the 2021 Regional Economic Strategy, the region has shown its ambition to push regional co-operation beyond the City Deal, including around skills. To move this agenda forward, GCR has established a Regional Skills Devolution Group that, together with key stakeholders, explores options for skills devolution in the context of ongoing reforms in Scotland.
Despite moves towards regionalisation, the options for Local Authorities, the Glasgow City Region and education providers to adjust provisions to the needs of local and regional labour markets remain limited. Regional stakeholders in Scotland struggle to align regional skills provision with labour market needs. Among the main challenges for the region are the funding mechanisms for colleges and universities, a lack of funding for re- and upskilling for workers, and a lack of granular labour market information to align provision to regional needs. The funding model for colleges and universities has created a system guided primarily by input (i.e. students) targets rather than employer demands/outcomes. The system has limited flexibility to test new courses, which could counter existing or anticipated skills shortages.
While there are potential benefits from the devolution of skills planning to the city-region level, any steps in this direction must be implemented gradually and supported by strengthened governance structures at the regional and Scottish Government levels. A regional model for skills planning for apprenticeships and college offerings could result in an outcome rather than an input/output-driven skills system if designed correctly. This would make the system more agile and better aligned with local and regional needs. It might also provide better options to tackle differences in skills opportunities across local communities in the region and strengthen funding for re- and upskilling activities for the existing workforce. To respond , GCR will need to build the capacity and capability to manage regional skills planning and provision, in the first instance, by prioritising areas or sectors where the need is most pressing (e.g., filling labour and skills shortages or driving productivity growth). In addition, this process could be combined with possible changes at the Scottish Government level (e.g., in the allocation of funding for further, higher, and adult learning). Inspiration could be taken from other City Regions in the UK (e.g. the Greater Manchester Combined Authority) and other countries (e.g. Ireland)
Although labour market information (LMI) is widely used at a regional level, Scottish Government data is not sufficiently granular to guide regional activities. Data collected at the Scottish Government level, such as the Employer Skills Survey, lack the necessary granularity and in-depth understanding of skills requirements for specific jobs to support the alignment of skills provision to labour market demand at regional and local levels. There is potential for the Glasgow City Region Intelligence Hub to take on a more vital role in collecting and analysing LMI in the region as a complement to Scottish national data.
Career guidance and financial incentives for individuals help to reduce barriers to participation in adult learning, yet these system pillars could be stronger
Current career guidance offers for adults in Scotland are complex and challenging to access, while financial incentives to invest in re- and upskilling for existing workers remain weak. Adults can access career guidance online (e.g. through the My World of Work portal) and in person (e.g. through Skills Development Scotland centres and community centres run by LAs). Yet, the offer for adults is complex and challenging to access, especially for the more vulnerable groups or low-skilled workers needing training to remain in employment or advance in their careers. In Bristol (UK), the Future Skills Programme is an exciting example of a career guidance programme targeted at adults at work. The programme takes a holistic individual approach, pairing participants with a dedicated career progression coach for one-on-one coaching in their area over three to six months.
Despite the growing numbers of adults needing re- and upskilling opportunities, the balance in career guidance provision and financial incentives is skewed towards youth. Economic incentives for individuals exist mainly at the national level in Scotland, and these are geared towards full-time, younger learners. In addition, one of the main initiatives – the Individual Training Account – has been paused for an undefined period. This contrasts with other countries, such as Latvia and the United States, where individual training accounts offer financial support for adults in/out of work. Other measures to increase participation, such as part-time/evening courses, modular courses and micro-credentials, also remain under-explored in most parts of the region and are particularly helpful for adult workers.
Despite good examples of individual businesses investing in skills development, the regional infrastructure for employer engagement is fragmented. There are many examples of employer engagement in skills development in GCR, including through colleges and universities, the apprenticeships system and in-house re- and upskilling facilities. However, the infrastructure for employer engagement across the skills system is highly fragmented, and mechanisms to enhance engagement more systematically and sustainably are limited regarding outreach and impact. As a result, levels of employer engagement are low overall, especially amongst small and medium-sized businesses (SMEs). In addition, communication with employers remains fragmented across the eight LAs and education institutions, making it difficult for companies to identify and engage in relevant programmes. In Ireland, the Regional Skills Fora is a one-stop-shop for employers to get information and guidance on available training opportunities. In addition, the Irish Skills to Advance programme offers targeted support for re- and upskilling in SMEs. Both examples could provide insights for GCR to learn from.
Strengthening re- and up-skilling opportunities for adults in work
Develop a regional model for skills planning and delivery
Continue the dialogue with the Scottish Government to examine the feasibility of enhancing regional responsibilities for parts of the adult skills system. Building on the ongoing work of the Regional Skills Devolution Group, the Glasgow City Region (GCR) could continue discussions with the Scottish Government on the options for devolution of skills planning and provision. The short-term objectives could be to develop a regional approach to contracting apprenticeships and to focus on re- and upskilling investments in sectors that are of priority to the regional economy. In the longer term, discussions could cover options to change colleges and universities' planning and delivery structure and establish a regional adult skills fund.
Review the regional governance structure to prepare for new adult skills planning and delivery responsibilities. Any moves to a more regionalised system should be supported by a review and reinforcement of the governance structures within GCR. In particular, there will be a need to expand the capacities of GCR to lead this work and establish a body that can oversee regional responsibilities in the skills area (e.g. a Skills Delivery Group operating in parallel with the Economic Delivery Group). The group could take the lead in monitoring regional performance and overseeing the delivery of parts of the Regional Economic Strategy.
Engage with critical providers in the region to support their efforts to co-ordinate and align skills provision to the regional economy. GCR could establish a Regional Skills Board bringing together representatives of education providers (e.g. colleges, universities, private providers, third-sector organisations and Local Authorities), employers and learners. While the board could include high-level representatives from relevant stakeholders, an attached network of working groups could support ongoing cooperation on various topics, e.g. employer engagement and career guidance.
Build regional capacity to collect and analyse labour market information that can supplement Scottish data sources. To support effective skills planning at the regional level, GCR could consider extending the role and resources of the GCR Intelligence Hub. The hub could strengthen its role in collecting and analysing granular data on the region's labour market and skills situation and taking the lead in monitoring regional performance.
Reduce individual barriers to participate in re- and upskilling activities
Establish a working group within the GCR governance structure to provide input to the Scottish Government on strengthening individual incentives for participation in adult education. The group could draw together regional experts with knowledge of what works to reduce individuals’ barriers to learning. One suggestion could be to re-launch the Scottish Individual Training Account with a stronger focus on supporting low-skilled workers at risk of labour market exclusion. This could be linked to the discussion around a regional adult skills fund.
Take steps to strengthen career guidance for adults. GCR could seek to enhance the regional career guidance offer for adults by mapping the variety of career guidance providers (e.g. LAs, Skills Development Scotland, Jobcentre Plus, employability providers, colleges and third-sector organisations). The aim would be to make services more accessible for adults in/out of work, integrate labour market intelligence into regional services, and develop bespoke GCR career guidance material for advisers. In addition, GCR could engage in dialogue with the Scottish Government on options to rebalance the career guidance offer to cater to the growing numbers of adults needing re- and upskilling opportunities.
Strengthen employer engagement to drive regional skills provision
Use the proposed Regional Skills Board to develop an employer engagement strategy. With regard to employers, a Regional Skills Board could build on the existing GCR infrastructure for employer engagement but could go beyond existing bodies to 1) ensure representation across sectors and sizes of employers and 2) have a specific focus on skills planning and provision. One priority task for the Board could be developing a regional employer engagement strategy.
Take steps to establish a single GCR Employer Hub. Drawing upon business support offered by Business Gateway and LAs, GCR could seek to develop one employer hub that combines business and skills development support. The offer could be available across all LAs, and a regional approach could be taken to help businesses identify relevant skills development programmes and other support measures available. The hub could provide one-to-one support for businesses, e.g., information/guidance on available programmes employers can access and support the development of in-house employer training capacities.
Recommendations for enhancing labour market inclusion of the economically inactive
Despite overall economic growth and low unemployment, the Glasgow City Region suffers from high and long-standing economic inactivity. The group of economically inactive (i.e. individuals who are neither employed nor actively seeking employment) includes individuals who are in education and training, retired, suffering from illness or disability, looking after young children or have other family and caring responsibilities. One in four people aged 16 to 64 were economically inactive in the GCR in 2023. The inactivity rate in GCR was higher than the Scottish average (23%) and the UK average (21%) and higher compared to other regions across the OECD. In the context of increasing labour and skills demand and high poverty levels, the LAs in the city region are looking for ways/tools to promote further labour market inclusion for the economically inactive group.
Figure 1.2. The inactivity rate remains high in the Glasgow City Region compared to other regions in the OECD but differs across the eight Local Authorities
Inactivity rate, 15 to 64-year-olds
Note: Panel A shows NUTS2 regions where cities are located. Data for Glasgow City Region are a weighted average of data for Glasgow City, East Dunbartonshire, East Renfrewshire, Renfrewshire, Inverclyde, West Dunbartonshire, North Lanarkshire and South Lanarkshire.
Source: OECD’s calculations based on NOMIS [Annual Population Survey] for UK data and OECD.Stat [Labour market – Regions] for the remaining data.
Economic inactivity in the Glasgow City Region is high, especially among individuals with long-term sickness and disability and low education levels
Long-term sickness is the main driver of economic inactivity in the Glasgow City Region. The inactivity rate differs across the LAs, with the highest rate observed in North Lanarkshire (28%), Inverclyde (27%) and West Dunbartonshire (26%), all significantly above the UK average in 2023. In contrast, in East Renfrewshire, the council with the lowest inactivity rate in GCR, only 20% of the 16-64-year-olds were inactive. Inactivity is high, especially among individuals with long-term sickness and disability. In all eight Local Authorities in GCR, long-term sickness is the primary cause of inactivity, excluding students, ranging from 36% of the inactive in Glasgow City to 60% in Inverclyde. Among individuals with a work-limiting disability, 56% are inactive in the Glasgow City Region.
Supporting those furthest from the labour market into work must be a central element of the region’s efforts to strengthen labour market inclusion. Increasing labour force participation positively affects public finances through lower public spending on social protection. It can also help overcome labour and skills shortages by expanding the pool of candidates for available jobs. The low educational attainment levels among the inactive imply that skills development is essential to policies supporting economic inclusion. In addition, the high incidence of inactive with disabilities or long-term illness calls for support measures that seek to tackle multiple challenges to help people into employment.
Local Authorities in the Glasgow City Region are progressively playing a role in the delivery of employability services for the economically inactive
With the Scotland Act of 2016, new powers were transferred to the Scottish Government to provide employment support for disabled people and those at risk of long-term unemployment. Employment services (from hereon referred to as employability services, the term used in Scotland) have traditionally been the responsibility of the UK Government. However, following the adoption of the Scotland Act of 2016, the Scottish Government has responsibility for employability services for two groups: i) persons with disabilities and ii) those at risk of long-term unemployment.
In March 2018, the Scottish Government launched a new employability plan, No One Left Behind, guiding extensive restructuring of the Scottish employability system. The plan sets a vision for a simpler, person-centred and more joined-up employability system for the most vulnerable groups in or outside the labour market. With this and the No One Left Behind Delivery Plan from November 2020, the Scottish Government took the first steps to introduce an all-age employability service targeting a broad range of vulnerable groups (including youth, persons with disabilities and long-term illness, parents, and the elderly) and designed to help people prepare for employment, training, education and volunteering.
The No One Left Behind plan emphasises the role of Local Authorities in delivering employability services to vulnerable groups, even though this is not a statutory duty of the local government in Scotland. At the heart of the plan is balancing local flexibility (through the decentralisation of employability funding and the design and delivery of services at the local level) with coherence across Scotland (including a Shared Measurement Framework to monitor and evaluate input, output and outcome). The plan sets out a Scotland-wide framework, which is co-designed and delivered by LAs to tackle challenges of long-term unemployment and economic inactivity more effectively. In practice, LAs design and deliver employability services through Local Employability Partnerships, which bring together local, regional and Scottish Government stakeholders.
In the Glasgow City Region, employability services are provided through a mix of programmes, providers and funding pots, often delivered through local partnerships. Each LA designs its employability services to be delivered in-house or through partnerships working or commissioning with Arms Length External Organisations1, third sector organisations2, colleges, Community Learning and Development3 providers and independent providers. Funding mainly stems from the Scottish Government through the No One Left Behind programme and the UK Government through its Shared Prosperity Fund. In most LAs, this is complemented by resources from local council budgets and charities.
Local Authorities operate alongside Jobcentre Plus offices overseen by the UK Department of Work and Pensions. Jobcentre Plus offices are located in most cities and towns throughout Scotland and are responsible for delivering employment services and administering unemployment benefits and other financial support for individuals out of work (e.g. Universal Credit and Job Seekers Allowance). The Jobcentre Plus offices take a “work first” approach, applying strict conditionality criteria and requiring individuals who receive income support to actively search for employment opportunities and be available for work. This is distinct from the voluntary No One Left Behind programme, which recognises that the journey towards work can be long, especially for individuals with multiple barriers to employment, who often need holistic and individualised support.
Individuals can access the employability system in the Glasgow City Region through many different routes. The most common referral routes into employment support services are through the Jobcentre Plus offices and SDS career advisors. However, individuals can also enter the system through LAs, Arms Length External Organisations, or third-sector organisations. With the introduction of the No One Left Behind programme, LAs have started to simplify the client journey by requiring all individuals to enter the system through a Keyworker Service Provider, which is responsible for developing an individual action plan, registration of client data and referrals to more specialised services. LAs have also introduced Management Information Systems to register data on individual clients. However, the system remains fragmented, with some individuals not registered and limited data sharing across stakeholders. In addition, LAs could use available data to inform programme design, target interventions and guide outreach activities. Inspiration for a model for data-sharing and use can be found in the youth area, where the Scottish 16+ Data Hub is an excellent example of how data can be shared across critical stakeholders.
Adult education for the economically inactive primarily comes through Community Learning and Development programmes delivered by LAs, colleges and third-sector organisations. Community Learning and Development is a critical element of the adult education sector in Scotland and often includes courses on adult literacy, English for Speakers of Other Languages, employability, digital skills citizenship, and Gaelic. LAs have a statutory requirement to work with partners and communities to co-produce and secure the delivery of Community Learning and Development.
The role of the city region in supporting employability could be strengthened, especially in local areas with service gaps
Despite local efforts, employability provision in the Glasgow City Region remains fragmented, not least due to the financial structure of the system. Funds from the UK and Scottish Governments are allocated to LAs according to annual budget cycles, making the system less predictable due to the short-term funding cycle and changing programme requirements from year to year. This also harms partnership development, increases the administrative burden and makes it difficult to define and monitor results in the longer term. Each of the UK and Scottish Governments’ funding streams comes with separate requirements regarding target groups, services to be delivered, and evaluation and reporting activities. In the GCR, LAs struggle to combine multiple funds to facilitate coherent service delivery for clients and create stability for staff and partnerships.
The provision of employability services is restricted by the administrative borders of the Local Authorities, and the city region plays a limited role in coordinating local efforts. Employability support for individuals stops at the border of each LA, and co-delivery or referrals across borders are not common. In addition, the role of the city region remains limited, and there are only a few examples of pooling resources to provide region-wide programmes or share good practices. The place-based approach supports the delivery of services that are targeted and tailored to local needs. Yet, the model comes with challenges for individuals (e.g. gaps in service provision for specific groups and restrictions in programme choice to the local area despite good commuting opportunities), stakeholders (e.g. fragmented employer engagement strategies and multiple commissioning procedures), and LAs (high administrative burdens and limited resources for evaluation, identification and up-scaling of good practices).
The third sector is significant in the Glasgow City Region and is vital in delivering employability services. Still, the sector is challenged by the local delivery model. In Glasgow City alone, nearly 4 000 third-sector organisations provide essential services, including employability services, often targeting those furthest from the labour market. Yet, funding for the sector is tight and, in some areas, has become tighter as LAs move towards more in-house provision. In addition, certain LAs emphasise commissioning over grants, which comes with extensive administrative procedures. Only a few third-sector organisations have the skills, staff and financial capacity to engage in commissioning processes. While the sector is represented through Local Employability Partnerships, they struggle to get their voice heard. Countries like Belgium and France provide interesting examples of strengthening partnerships with third-sector organisations.
The integration of employability services with other services, including skills, health and mental health, varies across Local Authorities. Combining employability support with access to training and professional work experience can benefit labour market activation, but it requires strong stakeholder cooperation. In many LAs, the skills and employability strands operate in parallel systems through their respective partnerships. In addition, given the increasing complexity of client needs, there could be a stronger integration and alignment between employability and other support services, including health and mental health services. While local employment hubs that can support the co-delivery of services are under development across the city region, these remain in the early stages.
Enhancing labour market inclusion of the economically inactive
Develop a regional approach to employability services
Strengthen cooperation between Local Authorities (LAs) regarding employability services. Previous experiences have shown the potential benefits of a regional approach to designing and delivering employability services. The Glasgow City Region and its eight LAs could seek to identify areas where a regional approach to employability support could add value (e.g. to provide specialised services for sub-groups). Building on experiences from the Greater Manchester Combined Authority, the approach could combine regional design and management with local implementation flexibility.
Engage in dialogue with the Scottish and UK Governments on changes to existing funding models. There is a need to discuss changes in the UK and Scottish funding systems to align funding streams and create local flexibility. For the No One Left Behind funding, priorities could be to develop a multi-annual funding model aligned with the UK Shared Prosperity Fund and to merge funding pots within the programme. For the UK Shared Prosperity Fund priorities could be simplifying application procedures and allowing for a more extended period to develop investment plans.
Strengthen local and regional partnerships and improve collaboration with the third sector and the Jobcentre Plus offices
Strengthen the use of local employment partnerships. Building on early experiences in the region, LAs could consider using the Local Employability Partnerships to discuss strategic priorities across all funding pots and facilitate multi-agency collaboration. LAs could also follow examples of establishing thematic sub-groups to discuss operational issues.
Strengthen partnerships working with Jobcentre Plus offices at the operational level. The different natures of the No One Left Behind and the Jobcentre Plus offices are felt mainly at the case-worker level. Cooperation between LAs and Jobcentre Plus offices could be facilitated through joint training sessions for caseworkers, embedding Keyworkers in Jobcentre Plus offices, or joint development of individual action plans. An alternative and more far-reaching option would be to work towards a new institutional arrangement that supports an integrated approach to employment services in Scotland through further devolution in this area.
Facilitate cooperation with third-sector providers. LAs could streamline commissioning processes and administrative requirements attached to the programmes they provide through external providers and strengthen provider networks to enhance collaboration across the sector.
Improve the development and use of labour market intelligence and evaluations
Enhance the use of the labour market intelligence provided by the GCR Intelligence Hub and local Management Information Systems to inform employability work. Collecting the right individual-level data is crucial to measuring services' input, output, and impact. LAs could better use available data from local systems and the GCR Intelligence Hub to design and target employability services. A central Management Information System could allow for resource-efficient data collection and analysis for region-wide programmes.
Streamline and enhance evaluations of employability programmes. Evaluation should be the standard for employability services to ensure that money is spent effectively and that services for those furthest from the labour market are continuously improved. LAs and GCR could consider ways to enhance programme-level evaluations, including ex-post evaluations. To this end, the Intelligence Hub could cooperate more closely with LAs to support evaluation work.
Increase investment in targeted outreach and streamline registration and referral systems
Reallocate funding towards outreach activities and use data-driven processes and tools to increase the efficiency of the applied measures. LAs could use data from Management Information Systems to understand who needs support in local communities and who the current system is and is not reaching. Combined with partnerships working through the Local Employability Partnerships and the Community Learning and Development Partnerships, this could guide targeted marketing campaigns and strategies for physical presence in local areas.
Continue to streamline entry points and registration procedures through the Keyworker model. There is still a group of individuals who are not officially registered in the system or followed by a Keyworker. Continued rollout of the Keyworker model across LAs and funding streams is essential to simplify client journeys and avoid registration and data collection gaps.
Engage in dialogue with the Scottish and UK Governments on improving measures to facilitate data exchange between key stakeholders. There are currently limited opportunities to share data across the employability system. This is especially true for data sharing between LAs and the Jobcentre Plus offices and between LAs and external providers. Building on the experiences from the 16+ Data Hub, an equivalent portal for adults could be established.
Further integrate employability, skills and other services
Foster the integration of employability and community-based adult learning programmes. In most LAs, there is room for stronger integration of employability and skills services, including through changes in the organisational and management structures, channelling funding from the No One Left Behind programme and the UK Shared Prosperity Fund into Community Learning and Development activities, and strengthening collaboration between the Local Employability Partnerships and the Community Learning and Development Partnerships.
Build on good practices to strengthen the link between employment, health, and mental health services to support the inactive with disabilities or long-term illnesses. Some LAs have started to develop Employability Hubs to collocate services and providers, including employability, skills and health services. These models could be further developed and expanded across the region to provide clients with a one-stop shop for service provision.
Recommendations for facilitating the school-to-work transition
The successful engagement of young people in the labour market is crucial for their economic prospects and well-being, overall economic growth and social cohesion. Youth were particularly hard hit by the 2008 financial crisis and the COVID-19 crisis, resulting in high levels of youth not in employment, education and training (NEET rates) across the OECD. As highlighted in the updated OECD Youth Action Plan, being out of work or education can have long-lasting negative impacts, includjng on mental health and social relations. Thus, youth policies – particularly those supporting youth transitioning from school into work – are a key priority in most OECD countries.
Facilitating youth school-to-work transitions has been a critical priority in Scotland in recent years, and the investments have seen some positive results, including in the Glasgow City Region. Over the last decade, there have been continuous improvements in the educational attainment of young people in GCR. Today, the share of highly qualified people is higher for younger age groups (25-to-29-year-olds) than older generations in GCR. Yet, the region also has a high proportion of young people (16-24) who are inactive and not enrolled in education (15% compared to the Scottish average of 9%). In the future, the LAs in GCR must consider how to sustain and improve overall youth outcomes in an environment with an increasing demand for employability and skills services for adults.
Youth outcomes in the Glasgow City Region have improved in recent years, but large differences remain between different groups and Local Authorities
The Scottish school system provides pupils with a bespoke portfolio of qualifications that can lead them into further or higher education or the world of work. In Scotland, education is universal and compulsory until age 16. Depending on when and with which levels of qualifications pupils leave school, they can transfer into colleges (further education/vocational education and training), universities (higher education) or employment (including apprenticeships). In recent years, various Scottish Government policies have aimed to develop a more flexible and learner-centred environment in schools that broadens learner pathways beyond academic and exam-based options.
Local Authorities play a crucial role in supporting the education and learning of young people and building the foundations to prepare them for work. Scottish LAs have a statutory duty to ensure adequate education provision through schools in their area. This duty extends from early years through primary and secondary education (from 11 to 18 years). They also manage broader responsibilities for employability and Community Learning and Development. LAs focus on those young people from disadvantaged backgrounds or at risk of falling out of education and work who need additional support.
In the Glasgow City Region, the differences in youth outcomes across Local Authorities are observed from the early stages of education and are often related to deprivation. Pupils in East Renfrewshire and East Dunbartonshire in grades P1 (age 4-6), P4 (age 7-9) and P7 (age 10-12) have the highest literacy and numeracy scores in Scotland. At the same time, in Glasgow City, pupils have lower literacy and numeracy scores than the Scottish average. At the same time, the LAs with the best outcomes among youth have the lowest share of pupils living in the most deprived areas of Scotland. There are also significant differences in the pathways that school leavers pursue after the end of secondary school, which likely affects their subsequent employment outcomes.
Being in a positive destination (e.g. further or higher education, apprenticeships, work or voluntary activity) shortly after finishing secondary school does not guarantee positive outcomes in the long run. The measure of youth outcomes commonly used in Scotland is the participation rates of 16-19-year-olds and secondary school leavers. In GCR, the share of youth aged 16-19 not achieving a positive destination has decreased from 12% in 2016/17 to 8% in 2022/23. However, data for the UK shows that many youth, especially those above 20 years, have non-positive outcomes and are not in employment, education and training (NEET). While only 4% of 16-17 year-olds were NEET in the third quarter of 2023 in the UK as a whole, 11% of 18-20 year-olds, 16% of 21-22 year-olds, and 16% of 23-24 year-olds were NEET during the same period. That suggests that the long-term outcomes for youth are less positive than those measured just after they leave the compulsory school system. To grasp this difference, measures of youth outcomes in Scotland could be extended to take a more long-term perspective.
Figure 1.3. Many secondary school leavers in Glasgow City pursue higher and further education, and relatively few enter voluntary work, training and personal skills development
Destinations of secondary school leavers at follow-up (9 months after leaving school), 2021/2022
Note: Data for Glasgow City Region are a weighted average of data for Glasgow City, East Dunbartonshire, East Renfrewshire, Renfrewshire, Inverclyde, West Dunbartonshire, North Lanarkshire, and South Lanarkshire. Employment includes young people undertaking training in employment through national training programmes such as Modern Apprenticeships and Graduate Apprenticeships. Other employment opportunities include voluntary work, training, and personal skills development.
Source: Scottish Government [Summary statistics for follow-up leaver destinations; ISBN: 9781805259251].
Although the last decade has seen a growth in initiatives to support school-to-work transitions, further steps are needed to support outcomes in the Glasgow City Region
Despite the recent expansion of youth initiatives by the Scottish Government, there are challenges to achieving policy coherence and alignment across the youth system at the local and regional levels. On the ground, many stakeholders and services play a role in improving youth school-to-work transitions, including LAs, schools, colleges, universities, career guidance services, third-sector organisations, independent providers, etc. Funding for youth services is equally fragmented and includes resources from schools, the No One Left Behind programme, the UK Shared Prosperity Fund, Community Learning and Development, colleges and employers. Despite the moves within parts of the skills system to encourage regional collaboration amongst providers, changes have been uneven, including within GCR. To date, GCR has a limited role in supporting activities around youth transitions and strengthening connections between Scottish Government policies and local planning and delivery.
Initiatives to enhance employer engagement in youth programmes have been strengthened in recent years, but overall engagement remains low and dominated by larger employers. Employers are engaged in the skills system in Scotland and GCR in various ways, including through apprenticeships and other work-based learning programmes. The Scottish apprenticeship system has developed in recent years, with apprenticeship starts rising by 10% between 2013/14 and until the COVID-19 pandemic in 2019/20. In addition, Modern Apprenticeships (the most common type of apprenticeship) reach youth, adults and individuals from more deprived backgrounds. Yet, most employers are not engaged in the system, and smaller employers are under-represented. This contrasts with countries such as Austria and Germany, where employer engagement in apprenticeships is much stronger. In addition, the system leaves little flexibility to adjust provision to local and regional needs.
Scotland and the Glasgow City Region have an extensive but fragmented career guidance system for youth. In schools, youth are supported by advisors from Skills Development Scotland, school coordinators from the employer-led Developing the Young Workforce programme, third-sector organisations, and possibly other advisers financed by the LAs. After leaving secondary education, youth enter a new career guidance system. The system is challenging for youth to navigate, and an explicit challenge is the break in services for those aged 18.
Facilitating the school-to-work transition
Strengthen the collection and use of data to drive outcomes for youth
Engage in dialogue with the Scottish Government on ways to develop data to measure post-school youth outcomes. The Glasgow City Region could explore options at the Scottish Government level to change the approach to measuring outcomes for youth in and after leaving school. Measures in school could be broadened to include, e.g. well-being and soft skills. Measures of outcomes post-school could be strengthened, e.g. by adding a follow-up measure for positive destinations (e.g. three years after the young person has left school) or by measuring youth NEET (not in employment, education or training) rates for 20-24-year-olds.
Promote the use of the 16+ Data Hub across all relevant stakeholders in the region. The 16+ Data Hub is essential for sharing information on individuals across Local Authorities (LAs), schools, and colleges. The GCR and the regional Skills Development Scotland offices could facilitate stronger use of the hub to guide outreach and targeted support.
Strengthen work-based learning options through strong engagement of employers
Take steps towards a regional approach to apprenticeship planning and delivery. GCR could continue discussing options with the Scottish Government to inject more regional flexibility into the apprenticeship system. A regional model could allow for a more flexible approach to contracting for the number/types of apprenticeships and provide options to reallocate resources across areas/types of apprenticeships depending on changes in demand within a budget year.
Strengthen employer engagement to provide work-based learning opportunities, including apprenticeships, for youth, in line with the recommendations set out above. If a new system for employer engagement is established in GCR, it could also cover questions on the role of employers in supporting youth school-to-work transitions. New initiatives to strengthen employer engagement in providing early work experiences for youth could build on experiences, e.g. from Boston (United States) and Canada
Develop an integrated approach to youth career guidance in the region
Strengthen collaboration between different career advisors in various schools and engage in dialogue with the Scottish government on options to simplify the existing system. LAs could continue strengthening collaboration among the different advisers operating in schools. In addition, GCR could engage in dialogue with the Scottish Government on options to simplify the system, e.g., by integrating different adviser roles under the same organisation, which would be the primary contact point for youth. In addition, options to align guidance with labour market needs could be explored, for example, through better use of regional labour market intelligence. This work could be led by a working group operating under the the Regional Skills Board.
Enhance career guidance services for youth not in employment, education, and training. At the regional level or through dialogue with the Scottish Government, GCR could explore options to build a career guidance system available for youth out of employment, education, and training and extend it to people aged 25. The primary purpose would be to avoid the break in guidance and support when youth turn 18. This could be linked to broader efforts to integrate school-to-work services (see below) and could build on experience, e.g. from Finland and Norway.
Strengthen collaboration between schools, colleges and universities to facilitate transitions into further and higher education. There are options to develop an enhanced SDS/college/university career guidance offer to guide youth in the last years of school/first years of college/university. This can be supported through the co-location of advisers and better use of labour market and skills intelligence to identify youth with specific needs in the transition period, ensure a warm handover for young people moving into colleges/universities, and provide feedback to schools on which types of students struggle to succeed in the college/university system. This can draw on experiences from The Carrollton County Education Collaborative in Georgia (United States).
Establish a one-stop-shop solution for NEETs
Develop a one-stop-shop solution for NEETs building on the Keyworker model. LAs across GCR could seek to bring together stakeholders (e.g. SDS, Jobcentre Plus, employability providers, Community Learning and Development providers, colleges) in a new one-stop-shop youth facility centralising around the Keyworker model. Inspired by models from e.g. Denmark and Vienna (Austria) each NEET would get support from one Keyworker who could refer the youth to relevant support, education or training. The one-stop-shop could be led by the LAs in close cooperation with Skills Development Scotland (leading on career guidance) and the UK Government’s Department for Work and Pension (leading on access to benefits).
Reference
[1] Allas, T., W. Fairbairn and E. Foote (2020), The economic case for reskilling in the UK: How employers can thrive by boosting workers’ skills, McKinsey & Company, https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-economic-case-for-reskilling-in-the-uk-how-employers-can-thrive-by-boosting-workers-skills#/ (accessed on 25 April 2024).
Notes
← 1. Arms Length External Organisations are companies, trusts and other bodies that are separate from the local authority but are subjected to local authority control or influence.
← 2. The “Third Sector” in Scotland includes charities, social enterprises and voluntary groups, which play a vital role in supporting communities at a local level.
← 3. Community Learning and Development (CLD) in Scotland is a broad term, including youth work, community-based adult learning, family learning, and community development.