Report of the Director of Inclusive Economy.

This report provides an overview of the labour market in Manchester, how it has changed particularly in the last 3 years and the current issues and opportunities. It also shows the approaches being used by Manchester City Council in collaboration with partners to meet skill and labour market needs to combat the challenges faced by businesses and residents with the volatile economy and labour market conditions.

The committee considered a report of the Director of Inclusive Economy which provided an overview of the labour market in Manchester, how it had changed in the last 3 years and the current issues and opportunities.

Key points and themes within the report included:

·         The approaches being used by Manchester City Council in collaboration with partners to meet skill and labour market needs to combat challenges faced by businesses and residents as a result of the volatile economy and labour market conditions, and the successes of this;

·         The Manchester Employment Partnership’s strategic approach and activity to co-ordinate a response and shape the future labour market;

·         Examples of sector recruitment activity supporting health and social care, construction, digital and hospitality sectors;

·         Examples of area recruitment activity supporting North, Central and South areas of the city; and

·         The businesses supported by the Council’s Work and Skills Team. 

Key points and queries that arose from the committee’s discussions included:

·         Commending the Work and Skills Team for their work on hosting recruitment and careers events; 

·         Noting that Manchester had the fifth-highest childcare costs in the UK, and how this impacted employment rates;

·         The consequences for women returning to work;

·         How engaged the Council was with the Jobcentre Plus; 

·         Whether employers were improving their offer to attract prospective applicants for vacant roles; 

·         What differences residents and employers might see if there was local control over Jobcentres;

·         Why there had been a low take-up of apprenticeships, and what solutions were available to address this; and 

·         How the Council was consulted on the Local Skills Improvement Plan to ensure it embeds with the Council’s policy priorities. 

The Executive Member for Skills, Employment and Leisure stated that Manchester’s labour market was tight with many sectors reporting skill shortages and unfulfilled vacancies. He commented that Brexit and the Russian invasion of Ukraine had impacted the labour market, and this remained volatile. He noted that professional, scientific and technological services remained the biggest employing sector in Manchester and that unemployment and economic inactivity had risen over the previous three years despite growth in vacancies. He highlighted that the Work and Skills Team led strongly on a partnership approach to connect Manchester residents to employment opportunities and to support businesses to recruit the talent that they require, for example through recruitment fairs and focused support where required.

The Director of Inclusive Economy commented that some sectors had been worse hit by the Covid pandemic and energy crisis. She noted that 1 in 5 vacant Greater Manchester roles were in Manchester city centre and there were now 27% more jobs in the city than in 2015. She highlighted other aspects of the labour market such as job posting statistics; size of businesses; economic inactivity; and challenges in recruitment. She also highlighted the work being undertaken to address these challenges, such as the Work and Skills Strategy that was approved by the Executive in 2022, the work and focus of Jobcentre Plus, different work programmes such as Restart and Kickstart, the Adult Education Programme and the partnership working between agencies in Manchester. 

In response to discussions around the significant cost of childcare and the impact this had on parents returning to work, the Director of Inclusive Economy acknowledged the issue and the impact of low wages on the viability of working. She noted that childcare businesses had been impacted by the Covid pandemic and many providers received business grants to maintain provisions. The committee was also informed that the childcare sector was competitive, and it was noted that there was some work required to encourage providers to become Real Living Wage-accredited. 

The Executive Member for Skills, Employment and Leisure highlighted the need to view childcare provisions as national infrastructure, which was reiterated by committee members who suggested adult social care provisions should also be considered. 

It was also noted that the income gap between men and women was lower in Manchester than nationally, but this was largely as a result of men earning less. The Work and Skills Lead noted that increases in economic inactivity during the pandemic was driven by female economic inactivity, which could be a consequence of high childcare costs or other caring responsibilities. 

It was stated that the Council had a good working relationship with Jobcentre Plus and the Director of Inclusive Economy commented that the organisation was willing to work locally with the Council. She cited the Kickstart scheme as an example of where local input and design could have resulted in better outcomes more quickly.

Members were also advised that the employer offer had improved given the tight labour market with increases in the median wage. 

In response to a query around apprenticeship take-up, the Director of Inclusive Economy commented that there had been low numbers of apprenticeships in the city in previous years, which was largely due to the nature of Manchester’s economy and where the demand for skills was. She also explained that apprenticeships had been negatively impacted more than other learning and educational provisions during the Covid pandemic and many apprentices were furloughed which interrupted their studies. She also commented that the replacement of apprenticeship frameworks to standards had been challenged for apprenticeship providers and the resources available to them and they did not receive the same level of support during the pandemic as other learning providers. It was also stated that the apprenticeship levy had not generated the employer buy-in that was anticipated. The Director of Inclusive Economy advised members that there would be a focus on apprenticeships in the next year to promote them as an alternative offer. 

In response to the Chair’s query regarding consultation on the Local Skills Improvement Plan, the Executive Member for Skills, Employment and Leisure advised that the Council was engaged in this through the Leader’s input at Greater Manchester level. The Council’s Work and Skills Team also met with the Greater Manchester Combined Authority (GMCA) and Greater Manchester Chamber of Commerce to discuss the content of the Plan and ensure that there was a focus on low-skilled and unskilled workers. 

The Executive Member for Skills, Employment and Leisure welcomed the committee’s discussion on this subject and advised that regular briefings were provided through Area Committees, which he encouraged all members to engage with. 

Decision:

That the report be noted.