Glasgow City Region has the 5th largest population in the United Kingdom (UK) and is the economic powerhouse of Scotland. Glasgow City Region (GCR) – composed of eight Local Authorities – is Scotland’s largest integrated economic area and accounts for a third of its jobs and economic output. Over the last decade, the unemployment rate fell to a record low of 3% in 2023, below most other major cities in the UK. The share of the population with tertiary education (57%) has increased rapidly in the region over the last 20 years and in 2023 it was above the UK (52%) and EU averages (35%). At the same time, the composition of the labour market has shifted increasingly towards high-skilled occupations, which now account for 51% of all jobs. GCR also is an important cultural, educational, and research centre, home to several educational institutions of international reputation.
Glasgow City Region was one of the world’s first industrial cities, but it saw rapid deindustrialisation in the 1970s, with the demise of heavy industry. By the mid-1980s, it was largely regarded as a city in decline with a shrinking population. Since then, the city has experienced a steady economic recovery, albeit disrupted by the recessions that followed the global financial crisis and, more recently, the COVID-19 pandemic. Whilst the region’s population has grown since the mid-2000s, at around 600 000, it remains far below its peak of over 1 million in the early to mid-20th century. GCR has a relatively young population, with a high share of working-age people among the total population compared to Scotland and the rest of the UK. Major industries include high-productivity sectors such as finance and insurance, information and communication and manufacturing, and some lower-productivity sectors such as health and social work and wholesale and retail.
Ongoing efforts to strengthen the regional economy are centred around implementing the Glasgow City Region City Deal and the Regional Economic Strategy. Signed in 2014, the Glasgow City Region City Deal is the first City Deal in Scotland and one of the most advanced in the UK. The deal represents an investment by the UK and Scottish Government and the eight Local Authorities in GCR of over GBP 1 billion over 20 years in infrastructure, research, business innovation, and job opportunities for residents in the region. Launched in 2021, the Regional Economic Strategy reflects the region’s ambition to create an innovative, inclusive, resilient economy by 2030.
Despite its high growth potential, the Glasgow City Region faces several challenges, including economic inactivity and poverty rates. The region’s productivity levels compare poorly with other UK cities (e.g. Edinburgh and Manchester) and major OECD metropolitan regions (e.g. Paris, Amsterdam, Helsinki, Rome and Madrid), and income deprivation and economic inactivity are high. One in four people (24.7%) aged 16 to 64 were economically inactive in GCR in 2023 – higher than the Scottish (22.5%) and UK averages (21.3%). After excluding students, the inactivity rate in GCR remains one percentage point above the Scottish average (17% vs. 16%). In all eight Local Authorities in GCR, long-term sickness is the primary cause of inactivity ranging from 36% of the inactive in Glasgow City to 60% in Inverclyde. GCR also struggles with low life expectancy and high levels of poverty, including child poverty. The median pay in Glasgow City is lower than in London and Edinburgh, as well as the UK and Scottish averages. This is also reflected in deprivation statistics, with three of the most income-deprived councils of Scotland located in GCR.
As the economy has recovered from the COVID-19 pandemic, the pressure on the labour market has increased, resulting in labour shortages. Following a small drop in online job postings from 2019 to 2022, the number of online job postings in the Glasgow commuting area tripled between 2020 and 2022. The increase in vacancies, coupled with a decrease in the number of unemployed people, has led to labour market tightening. In 2022, 27% of employers in the region around Glasgow City had at least one unfilled vacancy, and 12% had a skills-shortage vacancy that was unfilled due to lack of applications with appropriate skills, qualifications or experience. This is close to the pre-pandemic levels of 26% (employers reporting unfilled vacancies) and 11% (employers reporting skills shortage vacancies) in 2017.
The challenges for Glasgow City Region’s labour market call for greater efforts to enhance and future-proof the skills and employability system in the region. In a rapidly changing labour market, effective alignment of training and learning offers with labour market needs can help alleviate skill gaps and mismatches and support low-skilled and low-paid workers in improving their employment and social situation and help employers improve their productivity. At the same time, a strong and integrated employability system can help identify and support those furthest from the labour market into education and training, volunteering and in turn into work.
The Glasgow City Region recognises the importance of adult skills provision to drive regional economic growth, but the national policy and funding framework for skills policies leaves limited room to adjust provision to regional needs. Responsibility for skills policies is devolved from the UK to the Scottish Government, but the system remains relatively centralised at the Scottish level. Adult learning programmes are coordinated and managed through various Scottish government skills agencies, which strongly influence funding allocations locally. At the same time, skills policies are increasingly featured in key GCR strategies, including the Regional Skills Investment Plans. In addition, Glasgow City is aiming to be the first circular city in Scotland to meet carbon-neutral goals by 2030, which will impact the skills needs in the city and region. Building on these strategies and in the broader context of the Scottish Government’s plans to reform the Scottish skills system, GCR is exploring options for skills devolution to strengthen regional skills provision and economic growth.
Contrary to skills policies, employability services are predominantly designed and delivered by Local Authorities with a limited role for the Glasgow City Region. 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). In addition, Local Authorities operate alongside the Jobcentre Plus offices overseen by the UK Department of Work and Pensions.
To future-proof the skills system, Glasgow City Region and its eight Local Authorities could build on the following recommendations to further their existing efforts:
Aligning regional skills supply with demand and supporting re- and upskilling of workers
Develop a regional model for skills planning, funding and delivery: The skills system in Scotland is under review. With the ambition to strengthen the region’s ability to align skills supply with regional labour market needs, GCR should seize the moment and work with the Scottish Government to explore the potential of a regional model for planning and delivery of continuous education and training (in particular for further education and re- and upskilling programmes). In parallel, GCR could review its governance structures and consider the establishment of a Regional Skills Board with the representation of critical stakeholders (e.g. colleges, universities, private providers, learners, third-sector organisations and employers) to update, review and oversee the delivery of a revised Regional Skills Strategy. The role of the GCR Intelligence Hub could also be developed to assess changing employment and skills needs in the region.
Reduce individual barriers to participation in re- and upskilling: Financial incentives for adults to participate in re- and upskilling are limited in Scotland, and the Scottish career guidance system is fragmented and not linked to regional labour market intelligence. GCR could provide input to the ongoing Scottish Government review of individual incentives, including options to re-launch the Individual Training Accounts. This could be linked to a discussion on establishing a regional adult skills fund to finance re- and upskilling initiatives. GCR could also strengthen career guidance for adults by mapping and better connecting various providers and developing bespoke GCR career guidance material for advisers building on regional labour market intelligence.
Strengthen employer engagement to drive regional skills provision: Employer engagement is vital for delivering re- and upskilling opportunities for adults in work. However, the regional infrastructure for employer engagement is fragmented and focuses too much on the larger employers. GCR could use a potential new Regional Skills Board to strengthen employer engagement across sectors and employers of all sizes and develop a regional employer engagement strategy. In addition, GCR could consider developing a GCR Employer Hub that combines business support and skills development support.
Enhancing labour market inclusion of the economically inactive
Develop a regional approach to employability services and engage in dialogue with the UK and Scottish Governments on stronger alignment of funding with local needs: The eight Local Authorities could seek to identify areas where a regional rather than local approach to the design and delivery of employability services would add value to the region. The approach could combine regional design and management of programmes with local flexibility to reflect local structures and priorities. This could be combined with a dialogue with the UK and Scottish Governments on changes in the funding structure for the No One Left Behind programme and the UK Shared Prosperity Fund to create more long-term stability in the system and reduce the administrative burden for Local Authorities.
Strengthen local and regional partnerships and improve collaboration with the third sector: Local Authorities operate alongside Jobcentre Plus offices overseen by the UK Department of Work and Pensions. While stakeholders find ways to cooperate across the two systems, stronger cooperation at the operational level is needed to align and optimise services to overlapping target groups (e.g. through embedding Local Authority case workers in Jobcentre Plus Offices). As an alternative option, a new institutional arrangement could be found through further devolution from the UK to the Scottish Government, following trends in many recent and ongoing reforms of Public Employment Services in other OECD countries.
Streamline referral systems, invest in targeted outreach measures and strengthen data sharing across stakeholders: Building on ongoing efforts, Local Authorities in GCR could seek to simplify and streamline entry points and client referral routes and ensure all clients are registered in the Management Information System of the Local Authority where they reside. In addition, available data could be used more strategically by Local Authorities to inform programme design, target interventions and guide outreach activities. Measures to facilitate data exchange across stakeholders (e.g. Local Authorities, third-sector organisations, Skills Development Scotland and Jobcentre Plus Offices) could also be developed.
Further integrate employability, skills, health and other services and strengthen investment in and delivery of basic skills: Given the rapidly changing skills requirements in the labour market and a growing share of economically inactive and long-term unemployed with complex needs (e.g. with long-term sicknesses or disabilities), there is a strong case for integrating employability services with other services provided locally, including skills, health and mental health services. This work could build on existing connections between LAs and the Scottish National Health Service and ongoing work to build local Employability Hubs.
Strengthening youth school-to-work transitions
Strengthen the collection and use of data to drive youth outcomes: The GCR could explore options at the Scottish Government level to change the approach to measuring labour market outcomes for youth to capture better the long-term trends (e.g. by measuring youth NEET (not in employment, education or training) rates for 20-24 years-old. In addition, the region could foster strengthened use of the 16+ Data Hub for youth.
Develop an integrated approach to youth career guidance in the region: The career guidance system for youth is fragmented (multiple stakeholders with overlapping responsibilities and lack of clear referral routes). GCR could continue strengthening collaboration among the different types of career advisers in schools or consider options to simplify the existing system (e.g. by integrating different advisor roles under the same organisation). In addition, collaboration between schools, colleges and universities could be strengthened to facilitate transitions into further and higher education. For youth out of education and work, GCR could explore options to build a dedicated career guidance offer available for youth until age e.g. 25.
Establish a one-stop-shop solution for youth not in employment, education, or training (NEETs). Local authorities in GCR could seek to bring together various stakeholders to provide youth support services in a new one-stop-shop youth facility, centralising around the Keyworker model used to deliver employability services. This facility could integrate services for NEETs.
Strengthen work-based learning options through strong engagement of employers: As a key part of building up a regional skills system, GCR could seek options to inject more regional flexibility into the apprenticeship system. A regional model for planning and delivering apprenticeships could, among other things, allow for a more flexible approach to contracting apprenticeships and provide options to reallocate resources across occupational areas and types of apprenticeships depending on changes in demand. In parallel, GCR could seek to strengthen employer engagement to provide other forms of work-based learning, including through the potential new Regional Skills Board.