Setting the scene: the need for a more equal Coventry and sustained economic recovery
The economy
Challenging economic climate following a decade of success:
In the 10 years after the 2008/09 recession, Coventry & Warwickshire was the fastest-growing local economy in England, with economic output (measured in real GVA) growing by 33.4% between 2008/09 and 2016/17. This was driven significantly by major investments in Research & Development and production in the automotive sector - providing a platform for the creation of new good quality jobs and training opportunities. During this period, Coventry also secured UK City of Culture 2021, was selected as a host venue for the 2022 Commonwealth Games, and was part of the West Midlands 5G Test Bed (the first of its type in the UK) – all of these were expected to provide the conditions for creating new job and training opportunities in other sectors, including creative industries and tourism & hospitality.
However, the performance of the local economy has slowed, reducing the capacity to create new employment and training opportunities. For example, in 2018/2019, Coventry & Warwickshire recorded the lowest growth rate of all local economies (1.24%) and in 2020, the West Midlands experienced the biggest economic contraction of all regions due to the Covid-19 pandemic. This led to a significant increase in the Claimant Count (numbers claiming unemployment-related benefits) from 7,825 (3.2%) in February to 16,490 (6.6%) in December 2020 (the peak pandemic level). This exacerbated longstanding inequalities in the city, with the highest increases in the Claimant Count seen in Coventry’s most deprived wards.
The economy’s capacity to recover has also been constrained since this date with inflation, increases in the cost of energy and materials, labour shortages, and supply chain disruption for key components and materials, all being key factors limiting economic growth. The regulations for trade between the UK and EU post-Brexit and additional document requirements have also slowed the recovery. With the Bank of England’s forecasts from August 2022 projecting a recession during Q4 2022 and all of 2023, there are risks that this could create further structural economic challenges and widen inequalities. An important objective of this Skills Strategy is to therefore ensure that Coventry’s labour force is able to secure the necessary skills to enable them to access new opportunities that will emerge from structural economic change and thereby enhance their standard of living. As an enabler of change, the Council will help our businesses to better reflect the communities they serve, encouraging employers to look at alternative methods of recruitment and to appoint more diverse workforces.
Demographics
Coventry’s has a dynamic and adaptable labour force that could play an active role in supporting the economic recovery:
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A young population: Coventry has a median age of 32 years compared to the UK average of 40. The pandemic in 2020 had a disproportionate impact on younger workers, due to the sectors most impacted by lockdowns, but through upskilling of the labour force (one of the central priorities within this strategy), this demographic could have an important role to play in accelerating the growth of emerging and expanding sectors of the economy.
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Expected growth in 65+ age group: The 65+ age group is expected to become the fastest-growing demographic over the next 15 years, and the transferrable skills and experience of this demographic could again have an important role to play in facilitating economic restructuring. Those 75+ represent 6% of the city’s population compared to a UK average of 9%. However, by 2043 there is expected growth in 75+ residents of 8%.
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A diverse city: 33% of Coventry’s population are from ethnic minority backgrounds, compared to 20% for England as a whole. Coventry’s population is expected to become more diverse: among schoolchildren, 48.7% of pupils are from ethnic backgrounds other than White British, and it will be essential that we ensure that any barriers these groups face in accessing employment and training opportunities are tackled within Coventry’s skills system
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Becoming less economically deprived and more equal: The 2019 Indices of Multiple Deprivation (IMD) report showed significant improvements compared to 2015. Coventry moved from 34th most deprived Local Authority area to the 64th. The number of neighbourhoods ranked within the most deprived 10% in the UK also decreased from 36 to 28. This improvement was driven in part by improving schools, a significant decrease in unemployment, supported by Coventry City Council’s Job Shop, and rising resident wages. This Skills Strategy will contribute towards further reducing the number of neighbourhoods ranked within the most deprived 10% by providing residents in these areas with more access to good quality jobs and training opportunities.
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Inequalities for women: Average weekly wages for women in Coventry are £173 less than those of male residents. This compares unfavourably to the national average gender pay gap of £97. Coventry also has statistically high numbers of economically inactive women with a gap of 9.6% between economically inactive women and men in Coventry which is larger than the National Average of 5.7%. A key focus of this Skills Strategy is ensuring that women in Coventry can access the best skills provision to help them into work or to progress to better-paid roles, with courses delivered with the right flexibility
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Improving outcomes for disability and health conditions: Coventry has just over 10,000 residents claiming Employment Support Allowance, the main out-of-work benefit for people with disabilities and health conditions. This number has decreased in the last 5 years. Coventry has proportionally less people economically inactive due to long-term sickness than the national average. Coventry has been particularly successful in supporting residents with learning disabilities to progress straight from education into employment through our innovative Supported Internship programmes with University Hospital Coventry and Warwickshire (UHCW) and Warwick University, which have seen over 70% progress into paid work. This Skills Strategy seeks to increase innovative provisions such as Supported Internships and ensure mainstream provision is sufficiently flexible to support the needs of people with disabilities and health conditions leading to good outcomes for these groups.
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Still challenges in health outcomes: The Covid pandemic has exacerbated longstanding inequalities, especially in health outcomes with life expectancy varying by 10.7 years for men and 8.3 years for women between the City’s most affluent and most deprived neighbourhoods. In delivering this strategy, we will work with businesses to tackle longstanding health inequalities, through increasing investment in skills and apprenticeships, implementation of fairer working practices and paying more staff the real living wage, engaging Trade Bodies, Unions and other relevant stakeholders in the process
Labour market
The characteristics of Coventry’s labour force will influence the focus of where our skills support activities need to be over the next five years:
- High employment in professional occupations: 26.4%, compared to a National Average of 23.3%. There is a high concentration of public sector employment: Coventry City Council, one of the largest Job Centres in the country, a large regional hospital and offices for several national civil service bodies such as The Department for Education and the Local Government and Social Care Ombudsman. Also, two large Universities which combined employ over 11,000 people, many in Professional Occupations, including engineering specialisms in support of Coventry’s advanced engineering research and development. There will continue to be a need for labour with the requisite generic, leadership and management, and technical skills to fill new roles, so it is vital that we enable the local education and training system to produce a local labour force with these vital skills.
- Strong employment in the manufacturing sector: 6.1% of Coventry’s workforce compared to a national average of 5.6%. Although the Covid pandemic caused a contraction of 2,300 jobs in this sector, advanced manufacturing & engineering is a sector where we aspire to create further growth (notably through growing electric vehicle and battery supply chains). It is therefore crucial that our skills system continues to produce a supply of local labour with the required high-level technical skills.
- Low proportion of residents employed as Managers, Directors and Senior Officials: 5% compared to a national average of 10.9%, although this is in part due to many of those working in these roles in Coventry businesses commuting from outside the city. A key objective within the Skills Strategy is to raise the aspirations of Coventry residents across all neighbourhoods, and expand provision and maximise take-up of Leadership & Management training to enable more Coventry residents to progress into these types of roles.
- Higher than average vacancy numbers: As with much of the UK over the last year Coventry has had higher than average numbers of vacancies. Employers particularly struggled to fill roles in hospitality and logistics, Health & Social Care (notably nursing roles in the NHS), and programme and software development roles across a range of sectors. This is a further challenge slowing the economic recovery, especially as many of these sectors employed high volumes of “EU nationals”, who have since left the UK labour market. We will therefore work with employers, trade bodies unions, and training providers to ensure that training courses are designed in a way that delivers the skills the sectors need, and to identify Coventry residents that could potentially benefit from upskilling and fill the vacancies.
- Many vacancies are low-skilled/low-paid and insecure: Skills solutions can support sectors experiencing labour shortages, however for many of the roles available the issue is more ‘labour’ as opposed to ‘skills’ shortage. Many roles in logistics, hospitality and care for example require elementary skills, have limited entry requirements, are lower paid and more insecure and struggle to attract candidates as a result. We will therefore work with employers, trade bodies and unions to drive improvements in the terms of employment within these sectors and develop and promote clearer career development paths. We will also provide support to these businesses in tackling recruitment challenges, and through the Job Shop, match local residents that could potentially fill new vacancies.