LOCAL SKILLSDEFICITS AND SPARECAPACITY
Duncan Melville and Paul Bivand
December 2019

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Summary
This report aims to model potential skills gaps in 2030 in England and for eight areas
within England, quantifying the potential loss of economic output these gaps could, all else
equal, lead to. There are three steps in doing this.
1. Modelling skills supply in 2030. To do this, an estimated baseline of qualifications
profiles in 2018 are produced using Labour Force Survey (which is more up to date but
has a limited breakdown at local level) to augment Census 2011 data (which is older,but has a more detailed local breakdown). To model forward to 2030, those age groups
that will be over State Pension Age are removed. It is assumed that young people
entering the workforce will have the same qualification profile as young people today. It
is assumed that there will be similar rates of improvement in adults’ qualifications
profiles as seen over the last decade, with the exception of higher skills where it isassumed that the rapid growth in higher education participation over recent decades
will slow. Taken together, this gives qualifications profiles for 20-64 year olds forEngland and for the eight case study areas.
2. Modelling skills demand in 2030. Working Futures gives projections for England andfor Local Enterprise Partnership (LEP) areas in England of demand for people withdifferent qualification levels. This is based on a model of the economy incorporating
past trends and assumptions about the future. This is then translated into demand for
different qualifications based on the current qualification profile of different occupations
and trends in these over time. We translate LEP data into local authority data by
applying the rate of projected sectoral change in the LEP to the sectoral make up ofeach local authority, derived from the Business Register and Employment Survey(BRES). The current Working Futures projections run to 2024. We have projected
these forward to 2030 by extending the rates of change projected by Working Futures.
This obviously assumes both that Working Futures trends to 2024 are correct and thatthese trends continue to 2030.
3. Quantifying and valuing potential skills gaps. We substract skills demand fromskills supply to give potential skills gaps. These are then grouped into low (noqualifications to below level 2), medium (levels 2-3) and high (level 4+) skills.
Individuals receive some of the benefits of skills improvements through higher wages,
and employers capture some through increased profitability and productivity. To
convert the projected skills gaps into an economic output or Gross Value Added (GVA)at risk figure, we use earnings for people at different qualification levels today multipliedby the skils gaps at that qualification level multiplied by the ratio of GVA to wages andsalaries in the economy (to reflect the share of benefits from skills improvements that
go to individuals and employers) of 1.766 taken from national accounts data.

3

There are some important caveats to this analysis. The first is that employers could
respond in a range of ways to any potential shortfall in skills, for example by changing theirbusiness strategies, automating work etc. So the skills gaps are only if all else is equal –they show potential skills gaps in the absence of policy or employer response. The
second is that Working Futures represents a ‘business as usual’ scenario. In practice theGovernment and local authorities all seek, including through Local Industrial Strategies, toboost economic growth and hence the demand for skills. They also seek to increase thesupply of skills. This analysis does not account for delivering this higher ambition orassume the success of current or future policy. Thirdly, in common with most reports, thisanalysis assumes that qualifications are a good proxy for skills. In practice, skills have amuch broader definition, but qualifications are the most widely available and comparable
unit of analysis.
The fourth caveat relates particularly to the local authority level analysis. Many people
commute in and out of local authority areas, and employers are often able to draw on apotential workforce beyond local authority boundaries. This analysis therefore focuses on
the extent to which the skills of people resident in a local authority (or groups of local
authorities) compare to the skills required by employers based in that local authority (orgroup of local authorities).
Our analysis suggests a potential shortfall in England of 2.5 million highly skilled people in
2030 and surpluses of 3.1 million people both for intermediate skills and low skills. Thisputs at risk economic output of around £120 billion.
These results compare to a shortfall of 4.2 million highly skilled people and surpluses of
1.9 million people with intermediate skills and 6.2 million low skilled people in our previous
analysis, published in 2017. The differences primarily arise from: i) different time frame,with the new analysis projecting to 2030 rather than 2024 as per the previous analysis;
and ii) adjustments to methodology for modelling skills supply so as to better reflect
upskilling in the workforce, changes since the 2011 Census, and the impact ofinternational migration and migration within England and the UK on skills levels.
In addition, the aim of national and local policy is to deliver a higher growth, higher skills
economy than the Working Futures projections for employer demand imply. The demand
for skills could rise if measures to improve productivity and growth, such as the Industrial
Strategy and other local and national policy, were successful. All else equal this would
increase the size of these skills gaps. National and local policy, including the Industrial
Strategy, could seek to meet these gaps by increasing the supply of skills. Employers andpolicymakers need to respond by improving our skills base and the utilisation of skills atwork as part of a wider Industrial Strategy.

4Introduction
This note looks at the extent and nature of the potential skills gap that could be faced in
the future through to 2030 – at both the level of England as a whole and in eight selected
local areas:•

Nottingham City•

Staffordshire•

Gloucestershire•

Greater Lincolnshire•

Essex, Southend and Thurrock•

Lambeth, Lewisham and Southwark•

North of Tyne•

Southampton and Portsmouth

In addition to the combined analysis for the case study area of Essex, Southend andThurrock, further disaggregated analysis covers for the three unitary authorities: Essex
County Council, Southend and Thurrock1. Continuing trends towards higher skilled jobs
suggest that significant changes in the pattern of demand for labour through to 2030 canbe expected. How the supply of skills might compare against this changing demand overthe future is assessed.
For the supply of skills we adopt a hybrid methodology which combines the results of twoalternative scenarios: first, a more conservative projection based simply on aging forward
the supply of skills for 2011 for 19 years and second an alternative scenario which also
takes account of migration between areas from both elsewhere in England and the UK,
and internationally and the effect of adult learning from the age of 25. We assessed theskills profile of the population in England using the second approach and found that itsuggested that by 2030 that more than a half of the population aged 20-64 would have
Level 4 plus skills. This scenario is based on projecting forward the increase in skills levels
seen between 2011 and 2018 for another 12 years. The seven years to 2018 saw a
substantial rise in participation in higher education and there must be uncertainty as towhether such a rate of progress will continue through to 2030.

1 While the Improvement and Development Agency for local government (IDeA) paid for the analysis at thelevel of England and for the eight case study areas, Essex County Council paid for the results to be
disaggregated to the level of the three constituent unitary authorities.

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Hence, the skills supply projections used are a weighted average of the two approacheswith a 60% weight for the first approach and a 40% weight for the second approach. Thisweighted average projection suggested that in 2030 around 45 percent of the population
aged 20-64 in England would have skills at Level 4 or above. This percentage is consistent
with the assumption we used for the population of working age of 43 per cent for 2030 in
our Time For Action2 report.
The difference between the projections for labour demand and labour supply provides
estimates of the resulting skills gaps or skills surpluses for England, the eight case study
areas and the three disaggregated constituent parts of Essex, Southend and Thurrock.
Where there are skills gaps, the economic output loss that can be expected to result as aconsequence of these gaps at the English and local levels has been estimated.
At the local level it is important to understand the nature of the question that is being
answered by this comparison of local demand and local supply. Local authority boundaries
rarely match those for local labour markets. Hence for the local case study areas thiscomparison assesses the extent to which residents in the local area are expected tosupply the types of skills that employers in the local area require.
However, not all people work in the local area in which they live. For example, based ondata from the 2011 Census of Population one third of the employed residents of the Essex
County Council area worked outside of this area. Similarly, not all the workers in any local
area also live in the same area. For example, again using data from the 2011 Census
showed that, more than two fifths of workers in Portsmouth and Southampton resided
outside of these two cities. Hence, the calculations for the case study areas in this report
do not answer either of the following questions:•

What, at 2030, is it anticipated will be the supply of skills available to local
employers?

•

What, at 2030, is it anticipated will be the supply and mix of jobs available to local
people?

The supply of skills available to local employers will also include in commuters into the
local area while the jobs available to local residents will include those they can commute tooutside of the local area in which they live.
The Office for National Statistics (ONS) produce a geography known as Travel to WorkAreas (TTWAs). TTWAs are intended to approximate local labour market areas. They aredefined as self-contained areas in which most people both live and work. Specifically, they
are defined as areas where at least 75% of the employed residents of that area work in the

2 Evans, S. and Egglestone, C. (2019), “Time Action: Skills for economic growth and social justice”, Learning

and Work Institute.

6

area, and also, that of everyone working in the area, at least 75% live in the area. Table 1
shows these two percentages for the case study areas in 2011.
This indicates that of the case study areas just three meet both of these 75% thresholds:
Gloucestershire, Greater Lincolnshire and the North of Tyne Combined Authority. The
combined area for Essex, Southend and Thurrock, and one of its three unitary authorities,
the Essex County Council area, meet one but not both of these thresholds. Hence, theauthorities in Gloucestershire, Greater Lincolnshire and North of Tyne can view theanalysis in this report as providing evidence which is closer to answering the two questions
above. However, even in these areas commuting in and out of them remains important.
For example, around one in six of those working in Gloucestershire commute into the areafrom outside and around one in six employed residents of North of Tyne commute out of
the area for work.
Table 1: Employed Residents Working in their Local Area Shares
Share of All Employed
Residents (%)

Share of Workers in the
Local Area (%)

Nottingham

63.6

42.8

Staffordshire

58.5

68.8

Gloucestershire

83.4

84.0

Greater Lincolnshire

85.9

90.9

Lambeth, Lewisham andSouthwark

30.0

34.5

North of Tyne

84.0

79.0

Portsmouth andSouthampton

62.2

57.6

Essex, Southend andThurrock

71.0

84.6

Essex County Council

66.3

78.9

Southend

55.3

64.1

Thurrock

45.9

57.6

Source: Census of Population 2011, L&W calculations

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The potential skills gaps in 2030
Skills gaps for England and for the local case study areas have been calculated for 2030.
These skills gap would constrain economic growth and the level of economic output if they
are not closed.
These gaps are the difference between:•

the qualifications that will be needed for the expected volume and pattern of jobs in2030 (future labour demand), based on Working Futures projections up to 2024
which have been extended through to 2030.

•

the qualifications of the workforce in 2030 (future labour supply) based on the
hybrid method which combines the results of two alternative scenarios: a moreconservative projection based simply on aging forward the supply of skills for 2011
for 19 years and an alternative scenario which also takes account of migration
between areas and the effect of adult learning from the age of 25. This hybrid
method is described above.

In order to illustrate our analysis more simply and clearly, we have clustered the eight
National Qualification Framework (NQF) qualification levels into three skills groups – highskills, intermediate skills, and low skills, as follows:•

Low skills are no qualifications plus qualifications below Level 2.

•Intermediate skills are Level 2 and Level 3 qualifications.

•High skills are Level 4 and above qualifications.

The skills gap in England
Figure 1 shows the difference between the composition of the projected employer demand
for skills in England in 2030 and the skills we expect to be held by the population ofworking age in England in 2030 (labour supply).
The composition of the projected supply of skills for England does not match the expectedshape of demand for skills for England in 2030. There are projected to be surpluses atboth the low and intermediate levels, especially the former, and a shortage of people withhigh skill levels.
Table 2 shows the same information in a different way. It indicates that England potentiallyfaces a deficit of high skills in 2030 amounting to around 2.5 million people if more is notdone to increase qualifications levels in our country. In contrast, skills surpluses of over 3
million are anticipated at both the low and intermediate skills levels.

8

Figure 1: Projected composition of Skills Demand and Supply in England, 2030

Table 2: Skills Levels and Needs in England in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

5,183

12,74014,882

Employer Skills
Demand

2,033

9,589

17,410Skills Gap

3,150

3,150

-2,527

Note: The figures above are rounded to the nearest thousand.

Local skills gaps
The above analysis for England is repeated below for our eight case study areas and thethree parts that make up Essex, Southend and Thurrock. In addition, for these local areas
information from the 2011 Census on commuting into and out of these areas for work ispresented to provide greater understanding of the local labour markets in these areas.

9Nottingham
Table 3 shows the projected supply of skills and the expected demand for skills in
Nottingham in 2030. Nottingham is projected to have a shortage of skills at both theintermediate and high levels, with an expected surplus of low level skills.
Table 3: Skills Levels and Needs in Nottingham in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

40

88

82

Employer Skills
Demand

24

97

132

Skills Gap

17

-10

-49

Note: The figures above are rounded to the nearest thousand.
These local skills gaps between the expected skills on offer from local Nottingham
residents and those expected to be demanded by Nottingham employers should beviewed in the context of significant in commuting into Nottingham for work shown by datafrom the 2011 Census (Table 4). Nottingham is a centre of employment for people who live
within commuting distance. In 2011, more than half of the workers in Nottingham camefrom outside the city. On the assumption that this pattern of commuting continues throughto 2030 then these skills gaps may be closed, or at least mitigated, by workers commuting
into the area for work.
Table 4: Employed residents, workers and commuting in Nottingham
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

67

63.6

42.8

Out Commuters

38

36.4

In Commuters

90

Net Commuters

51

All Employed Residents

105

Workers In Area

157

57.2

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

10

Staffordshire
Table 5 shows the projected supply of skills and the expected demand for skills in
Staffordshire in 2030. Staffordshire is projected to have a surplus of skills at all levels in
2030, particularly at the intermediate level.
These local skills surpluses should again be viewed in the context of the commuting
patterns prevalent in Staffordshire as shown by data from the 2011 Census (Table 6).
Around two fifths of workers resident in Staffordshire commuted out of the area for work.
More than a fifth (22%) or 76,000 travelled to the urban areas of Stoke, Birmingham,
Wolverhampton, or Walsall for work.
Stoke was the largest single destination for people to commute out of Staffordshire forwork in 2011 – accounting for 32,000 out commuters or 9 percent of all the employed
residents of Staffordshire. The urban areas of Birmingham, Wolverhampton and Walsall
were also significant destinations for out commuters from Staffordshire accounting for
44,000 outcommuters or 13 percent of all the employed residents of Staffordshire. Stoke
was also the largest single source of workers commuting into Staffordshire for work in2011 – accounting for 24,000 in commuters or 8 percent of all workers in Staffordshire.
Overall in 2011 there was substantial net out commuting of workers from Staffordshire. If
this pattern of commuting were to continue through to 2030 then these skills surpluses
may be reduced or even eliminated by workers commuting out of the area for work.
Table 5: Skills levels and needs in Staffordshire in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

70

223

184

Employer Skills
Demand

51

168

176

Skills Gap

19

55

7

11

Table 6: Employed residents, workers and commuting in Staffordshire
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

199

58.5%

68.8%

Out Commuters

141

41.5%

In Commuters

90

Net Commuters-51

All Employed Residents

340

Workers In Area

290

31.2%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

12Gloucestershire
Table 7 shows the projected supply of skills and the expected demand for skills in
Gloucestershire in 2030. Gloucestershire is projected to have a surplus of skills at the low
and intermediate levels and a deficit of high skills. As noted above Gloucestershire is oneof three case study areas that meets the two containment ratios used to defined TTWAs
which are intended to approximate largely self-contained local labour markets. In addition,commuting flows for work into and out of Gloucestershire very largely balance each otherout (Table 8). Hence, on the assumption that this pattern of commuting continues throughto 2030 then, relative to other case study areas the projected supply of, and demand forskills shown in Table 7 provides a much fuller assessment of both the total quantum andcomposition of labour that is expected to be available to employers in Gloucestershire in
2030 and also the total quantum and composition of jobs that is anticipated to be available
to workers in Gloucestershire in 2030.
Table 7: Skills levels and needs in Gloucestershire in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

55

156

142

Employer Skills
Demand

19

116

183

Skills Gap

36

40

-40

Table 8: Employed residents, workers and commuting in Gloucestershire
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

200

83.4%

84.0%

Out Commuters

40

16.6%

In Commuters

38

Net Commuters-2

All Employed Residents

240

Workers In Area

238

16.0%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

13

Greater Lincolnshire
Table 9 shows the projected supply of skills and the expected demand for skills in Greater
Lincolnshire in 2030. It is anticipated that the area will have surpluses of low andintermediate level skills, but a deficit of high level skills. As noted above Greater
Lincolnshire is another of the three case study areas that meets the two containment ratios
used to defined TTWAs (Table 10). Hence, again compared to other case study areas the
projected supply of, and demand for skills shown in Table 9 provides a much fuller
assessment of both the total quantum and composition of labour that is expected to beavailable to employers in Greater Lincolnshire in 2030 and also the total quantum andcomposition of jobs that is anticipated to be available to workers in Greater Lincolnshire in
2030.
Table 9: Skills levels and needs in Greater Lincolnshire in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

131

269

184

Employer Skills
Demand

44

199

237

Skills Gap

87

71

-53

Table 10: Employed residents, workers and commuting in Greater Lincolnshire
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

341

85.9%

90.9%

Out Commuters

56

14.1%

In Commuters

34

Net Commuters-22

All Employed Residents

397

Workers In Area

375

9.1%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

14

Lambeth, Lewisham, and Southwark
Table 11 shows the projected supply of skills and the expected demand for skills in
Lambeth, Lewisham, and Southwark in 2030. The tri-borough area is projected to skills
surpluses at all three skills levels.
Table 11: Skills levels and needs in Lambeth, Lewisham and Southwark in 2030,
thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

54

121

503

Employer Skills
Demand

14

69

429

Skills Gap

40

51

74

The area is a relatively small part of the much wider London conurbation. Very high rates
of in and out commuting for work is a feature common to many London boroughs. Seventy
percent of the employed residents of the tri-borough area work outside of this area whilearound two thirds of the workers in the area come from outside the area (Table 12).
Table 12: Employed residents, workers and commuting in Lambeth, Lewisham andSouthwark
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

110

30.0%

34.5%

Out Commuters

257

70.0%

In Commuters

209

Net Commuters-48

All Employed Residents

367

Workers In Area

319

65.5%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

15

The London CBD pulls in labour from across the capital and in 2011, 27% of the employed
residents of the tri-borough area ,or 98,000 people, worked in Westminster / City of
London the core of the London CBD. On the assumption that this pattern of commuting
continues through to 2030 then the calculated skills surpluses in the tri-borough area do
not represent the skills that might be available to employers in Lambeth, Lewisham, andSouthwark in 2030, or what jobs are available for the residents of these boroughs. This issimply because there is so much in and out commuting into and out of the area.

16North of Tyne
Table 13 shows the projected supply of skills and the expected demand for skills in the
North of Tyne combined authority. North of Tyne is projected to have surpluses of both low
and intermediate skills and a shortage of high skills in 2030.
Table 13: Skills levels and needs in North of Tyne in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills 1

81

194

183

Employer Skills
Demand

46

182

197

Skills Gap 1

35

12

-15

North of Tyne is the third case study area that meets the two containment ratios used todefined TTWAs (Table 14). Hence, again compared to other case study areas the
projected supply of, and demand for skills shown in Table 13 provide a much fuller
assessment of both the total quantum and composition of labour that is expected to beavailable to employers in the combined authority in 2030 and also the total quantum andcomposition of jobs that is anticipated to be available to workers in the combined authority
in 2030. This is dependent on the general patterns of commuting prevalent in 2011
continuing through to 2030.
Table 14: Employed residents, workers and commuting in North of Tyne
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

256

84.0%

79.0%

Out Commuters

49

16.0%

In Commuters

68

Net Commuters

19

All Employed Residents

304

Workers In Area

324

21.0%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

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Portsmouth and Southampton
Table 15 shows the projected supply of skills and the expected demand for skills in
Portsmouth and Southampton. Portsmouth and Southampton are projected to havesurpluses of low skills and intermediate skills, and a shortage of high skills in 2030.
Table 16 indicates that combined the two cities of Portsmouth and Southampton
experienced high rates of both in and out commuting for work in 2011. If such a pattern ofcommuting is maintained through to 2030 then compared to a number of the case study
areas, the needs of employers in the area are more likely to be met by in commuters andworkers in the area are more likely to out commute for work. In 2011, around a fifth ofworkers from Portsmouth or Southampton worked in Eastleigh, Winchester, Havant or
Fareham, and these four areas also accounted for around a fifth of those working in
Portsmouth or Southampton.
Table 15: Skills levels and needs in Portsmouth and Southampton in 2030,
thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

39

125

133

Employer Skills
Demand

11

78

149

Skills Gap

28

48

-16

Table 16: Employed residents, workers and commuting in Portsmouth andSouthampton
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

109

62.2%

57.6%

Out Commuters

66

37.8%

In Commuters

80

Net Commuters

14

All Employed Residents

175

Workers In Area

190

42.4%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

18Essex, Southend and Thurrock
Table 17 shows the projected supply of skills in our two scenarios and the expecteddemand for skills in the combined area of Essex, Southend and Thurrock. Below we also
assess our projections for the three unitary areas. The combined area has a projectedsurplus of both low and intermediate skills, and an expected shortage of high skills in
2030. These apparent surpluses of low and intermediate level skills may be reduced andthe shortage of high level skills sharpened by net out commuting from the combined area.
Table 17: Skills levels and needs inEssex, Southend and Thurrock in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

219

482

374

Employer Skills
Demand

41

274

499

Skills Gap

179

208

-125

In 2011, the difference between out commuting and in commuting for work in the
combined area was over 100,000 (Table 18). In 2011, 29 percent of workers commutedout of the area for work with around three quarters of these (accounting for 22% of all
workers residing in the area) working in London. Hence, if this pattern of commuting ismaintained until 2030, then part of the supply of labour that is expected to be provided byworkers from the area would meet the needs of London rather than local employers.
Table 18: Employed residents, workers and commuting in the combined area of
Essex, Southend and Thurrock
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

478

71.0%

84.6%

Out Commuters

195

29.0%

In Commuters

87

Net Commuters-108

All Employed Residents

673

15.4%

19

Workers In Area

564

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

Essex County Council
Table 19 shows the projected supply of skills and the expected demand for skills in theEssex County Council area in 2030. As for the wider combined area of Essex, Southendand Thurrock, the Essex County Council area has a projected surplus of both low andintermediate skills, and an expected shortage of high skills in 2030.
In 2011, a third of workers resident in the Essex County Council area work outside of thearea with London being the predominant destination with around one fifth of workers
resident in the Essex County Council area working there. Hence, again, if the commuting
patterns of 2030 are similar to those pertaining in 2011 then, part of the supply of skills thatare expected to be embodied in workers there would be meeting the needs of external,
especially London, employers rather than local employers. Hence, the apparent surplusesof low and intermediate level skills may be reduced and the shortage of high level skills
sharpened by net out commuting from the combined area of Essex, Southend andThurrock.
Table 19: Skills levels and needs in Essex County Council area in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

165

384

307

Employer Skills
Demand

33

223

410

Skills Gap

132

160

-103

Table 20: Employed residents, workers and commuting in Essex County Council
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

359

66.3%

78.9%

Out Commuters

182

33.7%

In Commuters

96

21.1%

20

Net Commuters-86

All Employed Residents

542

Workers In Area

455

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

Southend
Table 21 shows the projected supply of skills and the expected demand for skills inSouthend. Southend has a projected surplus of both low and intermediate skills, and an
expected shortage of high skills in 2030.
Table 21: Skills levels and needs in Southend in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

27

49

32

Employer Skills
Demand3

24

47

Skills Gap

24

25

-15

In 2011, Southend experienced high rates of both in and out commuting for work. Forty
five per cent of workers resident in Southend worked outside the town (Table 22), 22 percent working in the Essex County Council area and 19 per cent in London. The Essex
County Council area was also a very important supplier of labour to employers inSouthend in 2011: 31 percent of people working in Southend then being resident in theEssex County Council area. Hence, if the commuting patterns of 2030 are similar to thoserelating to 2011 then the skills available to employers in Southend will depend very
substantially on workers from the Essex County Council area and the jobs available toworkers living on Southend will include not just local jobs but also those at workplaces in
London and the Essex County Council area.
Table 22: Employed residents, workers and commuting in Southend
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

37

55.3%

64.1%

Out Commuters

30

44.7%

21

In Commuters

21

Net Commuters-9

All Employed Residents

67

Workers In Area

58

35.9%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

Thurrock
Table 23 shows the projected supply of skills and the expected demand for skills in
Thurrock. Thurrock is projected to have surpluses of low and intermediate skills and ashortage of high skills in 2030. Thurrock has very high rates of in and out commuting forwork. In 2011, more than half of workers resident in Thurrock commuted out of the area forwork, with around a third of Thurrock workers working in London (Table 24). In addition,around two in five workers working in Thurrock commute into the area with around one insix coming from the Essex County Council area and around another one in six being out
commuters from London. Hence, similar to Southend if the commuting patterns of 2030
are similar to those in 2011 then the skills available to employers in Thurrock will dependvery substantially on workers from the Essex County Council area and London and thejobs available to workers living in Thurrock will include not just local jobs but also those atworkplaces outside the area, especially in London.
Table 23: Skills levels and needs in Thurrock in 2030, thousands
Low Skilled

Intermediate Skills

High Skills

Supply of Skills

27

50

34

Employer Skills
Demand42741

Skills Gap

23

23

-7

Table 24: Employed residents, workers and commuting in Thurrock
Numbers(thousands)

Share of All
Employed
Residents (%)

Share of Workers In
Area (%)

Employed Residents
Working in Area

30

45.9%

57.6%

Out Commuters

35

54.1%

22

In Commuters

22

Net Commuters-13

All Employed Residents

65

Workers In Area

51

42.4%

Source: Census 2011
Note: The figures above are rounded to the nearest thousand

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Potential losses of economic output
A shortage of skills at all levels can constrain economic growth. There is strong
relationship between skills and productivity. Thus, any shortfall in the qualifications neededby employers will lead to reduced productivity and lower economic growth, subject to how
employers choose to respond to these (for example, by changing their business models torely more on technology). The projected skills gaps for England, and each of the casestudy areas have been used to calculate the potential loss of economic output in 2030.
The results of our calculations are shown in Table 25 For England we estimate that thepotential loss of economic output in 2030 could be around £120 billion in today’s prices.
Table 25: Potential economic output lost, £billion, 2030
Area

GVA at risk (£bn)

GVA at risk (%)-£119.6-7%

Nottingham

-£4.0

-28%

Staffordshire

£0.0

0%

Gloucestershire

-£1.9

-10%

Greater Lincolnshire

-£2.5

-10%

Lambeth, Lewisham and Southwark

£0.0

0%

North of Tyne

-£0.7

-3%

Portsmouth and Southampton

-£0.8

-6%

Essex, Southend and Thurrock

-£6.0

-13%

- Essex CC

-£4.9

-13%

- Southend

-£0.8

-19%

- Thurrock

-£0.2

-5%

England

In most of the local case study areas we project a potential loss of economic output
consequent on the existence of skills gaps, all else equal. There are two exceptions to this,for Staffordshire and for Lambeth, Lewisham and Southwark. In these two areas
comparing the expected skills of the local population and the skills requirements of jobs
expected to be located in the local area shows no skills shortages at any level and hence
no loss of economic output. However, both of these areas were net exporters of labour in
2011. Hence, if this picture of commuting still pertains in 2030 then some of the skills
expected to be embodied in the local population can be expected to be filling jobs outsideof these two areas rather than helping to meet the needs of local employers.

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