Web viewThe following table sets out a policy on forecast against the 2015 base employment levels and the policy off forecasts. Successful delivery of City Deal employment

Skills in Lancashire SKILLS AND EMPLOYMENT STRATEGY AND

IMPLEMENTATION PLAN FOR

Preston, South Ribble and Lancashire City

Deal2015

Skills in Lancashire: Skills and Employment Strategy and Implementation Plan for Preston, South Ribble and Lancashire City Deal

Contents

Executive Summary................................................................................................................1

1 The City Deal Economy and Proposition....................................................................10

2 Facilitating Wider Investment and Development........................................................18

3 City Deal Construction Related Employment and Skills Requirements...................24

4 The Construction Industry and Skills Requirements.................................................30

5 The Lancashire Employment Growth Context...........................................................40

6 The Skills and Employment Context for City Deal Led Economic Growth..............48

7 Strategy Objectives.......................................................................................................56

8 Priority Actions.............................................................................................................61

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Executive SummaryContext The Preston, South Ribble and Lancashire City Deal was the first of 20 second wave agreements, signed in September 2013. The City Deal was developed by local partners to drive forward growth by empowering the area to make the most of its economic assets and opportunities. City Deal status is valid for ten years from 2013/14 to 2023/24.

Over a ten year period, the ask to government document forecast that the City Deal investments and flexibilities would generate:

More than 20,000 net new private sector jobs, including 5,000 in the Lancashire Enterprise Zone;

Nearly £1 billion growth in Gross Value Added (GVA);

17,420 new homes; and £2.3 billion commercial investment leveraged.

Given the emphasis on transport infrastructure improvements and the time needed to complete work, there is an issue of the timing of benefits. In effect new investment will begin to have an impact from year three onwards, rather than from year one of the agreement.

City Deal investments will unlock a considerable programme of development activity. Plans will deliver over 1 million m2 of new employment floorspace and 16,950 homes over a 10 year period, a significant uplift on recent development levels. The City Deal area currently provides 158,000 jobs – 21% of the Lancashire LEP total. Employment has been slow to recover to pre-recession levels and has lagged behind Lancashire’s overall recovery.

The City Deal Investment PropositionTo achieve the targets, investments are focusing on the development of strategic transport infrastructure and bringing forward strategic sites to deliver both employment and housing growth. The core economic opportunities and challenges to be addressed include:

Strong economic performance – including a track record in delivering jobs and growth, low levels of unemployment, and high employment density development.

A need for critical infrastructure – a considerable programme of investment is required to overcome barriers to further sustainable housing and employment growth. Insufficient capacity on the highway network has been identified as a particular challenge.

City Deal status is allowing a series of prominent investments to be brought forward with many of the schemes long-term priorities. The planned programme of activities totals £375.883m1 between 2013/14 and 2023/24. The schemes to receive direct investment focus on the provision of major highways and other transport infrastructure, examples of which include:

Major Highways/Transport SchemesPreston Western Distributor £104.5m

Broughton £33.999m

Preston Bus Station £23.342m

South Ribble Western Distributor £44.671m

Penwortham By-pass £17.5m

Source: Draft City Deal Infrastructure Delivery Plan 2015/18

In addition, substantial funds are available for Public Transport Corridors and Local Centres and Education and Community infrastructure provision to support both existing and growing communities.

A nominal allocation of £100m from the £150m local property allocation has been identified for the City Deal Investment Fund. The Fund, invested as a new venture within the wider Lancashire Pension Fund, co-invests in housing and development schemes across the City Deal area. All investments are on a commercial basis.

To date, one substantial award has been made of approximately £18m to support the development of new student accommodation at the bottom of Friargate in Preston. The pipeline of activity suggests that a combination of scheme purchase and development will be supported with the mix to be adjusted throughout the investment period to maintain an acceptable level of risk. Hotel and student accommodation schemes have been identified to offer good yields within the City Deal area, although all schemes are assessed on an individual basis. The drawdown of funds will be dependent on the portfolio of schemes supported by the Fund as will the level and timing of funds being returned to the investment pot.

1 Contingency has been built into the current total in recognition that some scheme details remain to be finalised and cost estimates remain at an early stage of preparation

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Given the scale of ambition, there will be a requirement to ensure development partners are engaged throughout the infrastructure delivery programme. This will help to ensure that site development occurs promptly following the provision of infrastructure and any challenges that arise during the delivery phase are addressed in a timely manner.

Facilitating Wider Investment and DevelopmentCity Deal investments will unlock a considerable programme of development activity on priority sites. As noted earlier, plans are in place to deliver over 1 million m2 of new employment floorspace and 16,950 homes over a 10 year period which will be a significant uplift on recent development levels.

This level of development will require significant investment by private sector property developers and housebuilders and at a level not seen in Lancashire for many years. Engaging with new commercial investors will be a key area of activity for the City Deal team and two local authorities.

City Deal Employment Sites OverviewScheme Name 10 yr Scale of

DevelopmentPrimary

UseStart Year

End Year

Preston sitesNorth East Preston 359,510 m2 B2 and B8 2014/15 2023/24

Preston City Centre 146,788 m2 B1 2015/16 2023/24

North West Preston 9,700 m2 Retail 2014/15 Beyond CD

Sub-total 515,988 m2 - - -

South Ribble sitesPenwortham/ Lostock Hall 27,593 m2 B2 2016/17 2023/24

Cuerden 207,692 m2 Mixed use 2018/19 2022/23

Moss Side Test Track 30,000 m2 B2 and B8 2018/19 2020/21

Samlesbury EZ 145,360 m2 B2 2016/17 Beyond CD

Bamber Bridge 12,194 m2 B1 2016/17 2017/18

Lancashire Business Park 85,100 m2 B2 2023/24 Beyond CD

Sub-total 507,939 m2 - - -

City Deal total 1,023,937m2 - - -Source: DCLG monitoring returns and ekosgen analysis

The major development opportunities are in North East Preston and Preston City Centre, and Samlesbury EZ and Cuerden in South Ribble. These locations offer

considerable potential to accommodate advanced engineering companies, logistics and distribution businesses and office based accommodation for high growth service sector activities. Securing new investment from advanced manufacturing and supply chain companies will be challenging.

While Preston City Centre is expected to deliver early in the next ten years, reflecting the timing of City Deal investment and the impact of some recently completed public realm works, the South Ribble contribution is expected in the second five years of the work, and is dependent on Cuerden delivering significant employment land for development from 2019/20 onwards.

The annual profile of development over the City Deal period is set out below. Annual completion levels are forecast to start from a low base and peak in 2023/24 (i.e. the final year of City Deal status). This reflects the time taken to gain momentum from site development and the considerable scale of activity being taken forward.

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50,000

100,000

150,000

200,000

250,000

Annual Profile of Employment Land Development (m2)Source: DCLG monitoring returns

The development profile picks up markedly from 2018/19 onwards as important new infrastructure works reach or near completion. This profile has implications for the timing of economic and employment benefits from City Deal investments. However, City Deal is effectively delivering a 20 year employment land and development potential legacy, reflecting the long term impact of the infrastructure investment and scale of sites to be created.

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Seven housing priorities have been identified in City Deal plans to form the focus of residential activity. Across a ten year development period, 16,950 homes are forecast to be created – 15,750 through new build activity and 1,200 by returning vacant homes to active use.

City Deal Residential Sites OverviewScheme Name 10 yr Scale of

DevelopmentStart Year End Year

Preston sitesNorth West Preston 5,212 units 2014/15 2023/24

Preston City Centre 3,425 units 2014/15 2023/24

Re-use of vacant homes 1,200 units 2014/15 2023/24

Sub-total 9,837 units - -

South Ribble sitesPenwortham and Lostock Hall 1,676 units 2014/15 Beyond CD

Leyland and Cuerden 2,606 units 2014/15 Beyond CD

Bamber Bridge 761 units 2014/15 2022/23

Other priority sites 2,070 units 2014/15 Beyond CD

Sub-total 7,113 units - -

City Deal total 16,950 units - -Source: DCLG monitoring returns and ekosgen analysis

The development profile shows that annual completions are forecast to peak during 2019/20 at approximately 2,400 units per annum. In three of the ten years, completions will exceed 2,000 units per annum and in a further four years are forecast to exceed 1,500 units.

This level of development will require a significant number of housebuilders to be involved in the City Deal area and for the mortgage market to function effectively over the full ten years.

0

500

1,000

1,500

2,000

2,500

3,000

Annual Profile of Housing Unit CompletionsSource: DCLG monitoring returns

The increase in housing completions envisaged by local partners will require the availability of attractive sites and a very active and significant housing development industry. This scale of development is also likely to require the provision of social and affordable homes for rent and home ownership, and is likely to involve a larger private rented sector.

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Construction Employment and Skills RequirementsOn average, an annual requirement of over 4,000 construction workers has been identified for the first half of the programme rising to 6,300 during the second half of delivery. Forecasts suggest that residential development will be a leading employment requirement.

Annual Average Construction Employment Requirement Annual Average 2014/15-2018/19

Annual Average 2019/20-2023/24

Major highways/transport schemes 351 150

Local Highways/public realm 51 15

Education and community infrastructure 108 152

Housing: new build 2,958 4,965

Housing: refurbishment 32 32

Employment uses: office 441 544

Employment uses: industrial 110 329

Employment uses: warehousing 17 55

Employment uses: leisure and retail 88 93

Total 4,156 6,363Source: CITB Labour Forecasting Model

Delivery of a large scale construction programme will require a considerable scale skilled workforce to plan, develop and oversee activity. Forecasts suggest that higher level skills requirements will average 1,584 during the first half of the programme and 2,434 during the second half.

Forecasts suggest that there will also be considerable demand across a range of construction trades. Again the demand for these is expected to be higher during the second half of the programme, with 2,376 workers required in the first half compared to 3,673 in the second.

CITB data, which provides a higher base employment number, suggests that in the first five years, City Deal will lead to a 5% increase in construction employment at the Lancashire level and potentially a 16% increase at the Preston and South Ribble level.

Annual Average Employment Requirement: Higher Level Skills Annual Average 2014/15-2018/19


Senior, executive, business managers 226 365

Construction project managers 67 93

Other construction process managers 276 396

Non-construction professional, technical, IT 491 778

Civil engineers 115 153

Other professionals and technical staff 240 377

Architects 59 96

Surveyors 110 176

Total 1,584 2,434

Annual Average Employment Requirement: Other Construction SkillsWood trades and interior fit-out 381 622

Plumbing, heating, ventilation trades 255 419

Electrical trades and installation 249 405

Painters and decorators 173 284

Building envelope specialists 165 266

Bricklayers 112 181

Specialist building operatives (other) 106 156

Construction trades supervisors 96 121

Plasterers and dry liners 89 147

Roofers 81 132

Floorers 42 69

Glaziers 51 84

Scaffolders 39 64

Plant operatives 91 111

Plant mechanics/fitters 52 75

Steel erectors/structural 43 67

Logistics 49 63

Labourers nec* 293 407

Total 2,376 3,673

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Source: CITB Labour Forecasting Model

Construction Industry Challenges Lancashire accounts for a significant proportion of the North West construction business base at 22%, compared to 21% of businesses across all sectors. Similarly, Preston and South Ribble account for 18% of Lancashire’s construction business base, compared to 17% across all sectors.

Construction is an important employer in the City Deal area economy. In 2013 Preston and South Ribble had a workplace employment figure of 14,259 in the construction sector, which equates to 10% of the workforce. This is a significantly higher proportion than regionally and nationally, for example across Lancashire less than 6% of total employment is in construction (35,328).

The Lancashire specific economic forecasts suggest that the construction industry will increase by circa 8,000 jobs over the next ten years, of which circa 3,000+ could be based in Preston and South Ribble. In terms of employment growth, this makes construction a local priority sector for the City Deal area.

It is not clear how the construction industry will be able to recruit the numbers of experienced personnel required over the next three to five years, and increasing demand will impact on some of the Lancashire infrastructure projects.

Given the planned infrastructure projects, the strong company and employment base and the recognised skills and recruitment difficulties, there is a rationale for local City Deal partners agreeing construction as a priority growth sector and developing new initiatives with the industry to tackle business, innovation and skills issues.

There are already a number of organisations involved in addressing the challenges facing the construction industry at both a regional and national level. More importantly there are strong local industry networks and experienced training providers involved with some of the company base. Resources are available from a number of sources, although funding can be short term and limited.

Some of the solutions for industry challenges will involve the provision of more partnerships and more industry relevant further education (FE) courses to recruit young people to the sector, although these respond to medium term challenges. At the same time, the industry may have to recruit older workers to meet some of the immediate challenges.

Gives these challenges, along with the need to introduce new technologies and processes, a single initiative, well resourced and with close industry involvement, could be the most effective way of addressing challenges and supporting company and employment growth.

Lancashire Employment Growth Recently produced forecasts for Lancashire show that in terms of actual growth in numbers of jobs, construction, professional, financial and business services will increase considerably, with important contributions from a range of other sectors.

ManufacturingPublic administration

EducationAgric, forestry & fishing

UtilitiesMining & quarrying

Science & R&DHealth & social careTransport & storage

Wholesale & retailCreative & cultural

ConstructionBus., fin,. & prof. services

-10 -5 0 5 10 15(000's)

Forecast Employment change by Sector, 2015-2025Source: Oxford Economics

There are two major challenges with the Lancashire policy off employment forecast:

the overall rate of employment growth is forecast to be lower than the North West and national figure, while the LEP stated ambition is to close the employment gap over the next ten years.

the forecasts indicate manufacturing employment declining over the next ten years, albeit at a slower rate than historically; while local partners envisage manufacturing at least stabilising and possibly increasing on the basis of advanced manufacturing and supply chain investment.

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Based on the nature of floorspace to be created and applying Homes and Communities Agency employment density guidance, the City Deal supported sites have the potential to accommodate over 30,800 jobs.

It is unlikely that the scale of floorspace envisaged with be fully developed and occupied within a ten year period. A more likely, although still ambitious, target is that two thirds will be developed over a ten year period, suggesting an employment impact of 20,000 jobs in line with the City Deal forecast (see the section below for further details).

If the City Deal was to deliver 20,000 additional jobs, it would considerably increase the contribution of Preston and South Ribble to Lancashire’s employment growth, helping to push the employment growth rate to a level which matches or exceeds the national growth rate, and in line with the LEP’s ambitions.

Crucially, the City Deal area, through the successful development of the Enterprise Zone, has a critical role to play in strengthening manufacturing employment and securing new investment in advanced manufacturing and the supply chain.

City Deal Policy On Employment Growth City Deal employment growth, based on the supply of sites, will be driven by new investment in manufacturing jobs, predominantly in the Enterprise Zone, logistics and distribution with a leading role for South Ribble and office based employment in and around Preston City Centre. It is likely that employment in construction and some office based sectors will be greater than forecast, while manufacturing may be less. A series of adjustments have been made to reflect employment growth forecasts and associated demand for space. Across all sectors, the policy on scenario represents an 12% uplift on 2015 employment levels and a 4% uplift on the policy off growth forecast. Planned investments are therefore expected to play an important role in supporting the City Deal area to increase its contribution to Lancashire’s economic performance and raise the LEP area’s overall performance.

The following table sets out a policy on forecast against the 2015 base employment levels and the policy off forecasts. Successful delivery of City Deal employment ambitions will have significant implications for employment levels across a range of sectors and will support the rebalancing of the economy by increasing levels of private sector employment whilst also helping to reduce the scale of anticipated manufacturing job losses.

City Deal Policy On Forecasts Sector 2015

baseline2025

policy on forecast

Jobs uplift

Policy on % uplift

Policy off % uplift

Manufacturing 11,159 12,659 1,500 13 -13

Construction 19,641 22,641 3,000 15 16

Wholesale and retail 24,114 24,814 700 3 2

Transportation and storage

6,386 9,386 3,000 47 7

Information and communication

4,083 5,583 1,500 37 15

Financial and insurance 2,796 4,396 1,600 57 -

Real estate activities 2,695 3,675 980 36 16

Professional, scientific and technical

8,219 11,819 3,600 43 13

Administrative and support services

13,967 15,667 1,700 12 15

Public administration 12,446 13,146 700 8 9

Arts, entertainment and recreation

3,166 3,566 400 13 13

Other1 1,320 - -

Total (selected sectors) 108,670 128,670 20,000 - -

Total economy 160,000 180,000 20,000 12.5% 4%

Source: Oxford Economics Forecasts and ekosgen estimates1 Including care and higher education amongst others not captured by traditional employment floorspace

The policy on scenario is dependent on reversing manufacturing employment decline (including energy and environment, building products), and a much higher level of growth in business and professional services and digital and creative industries. In addition, construction employment potential needs to be fully supported. If achieved in a ten year period, the City Deal will have to treble its employment growth relative to the policy off forecast, which reduces if the employment target is

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stretched over 13-14 years to allow for the full impact of the road infrastructure to have an effect.

The impact of the policy on employment growth scenario will be to change the make-up of the workforce, and a large proportion of the jobs will require a degree educated workforce, while others will require well qualified and skilled staff.

City Deal – Policy On Occupation Profile OccupationManagers, directors, senior officials 2,500

Professional 3,600

Associate professional and technical 4,000

Skilled trades 1,600

Administrative and secretarial 2,000

Process, plant, machine operatives 2,000

Sales and customer services 1,500

Caring, leisure and other services 1,800

Elementary 1,000

Total 20,000Source: ekosgen estimates

This employment growth will also contribute to higher levels of apprenticeship places in some sectors and a marked increase in graduate recruitment.

While new sites and premises will accommodate this employment growth, new inward investment and the availability of a quality workforce will be critical in securing growth. The following points will need to be considered in planning future employment and skills requirements:

The workforce will become increasingly better qualified and higher skilled, particularly the younger workforce, and local education and training providers have an important role to play over the next ten years.

While FE provision covers a range of occupations and sectors, it will be important to focus on the types of office based employment which will dominate employment growth as well as catering for the needs of the construction sector to deliver infrastructure and site development.

There needs to be a growing number of young people leaving school with good qualifications and moving on to appropriate academic and vocational training.

This will need to be accompanied by strong STEM performance and high quality IAG at an early stage.

Apprenticeships will play an important role in providing employers with a young well qualified workforce in many sectors. Working with employers to increase the provision of apprenticeships will be a key priority for local partners.

FE colleges need to provide a regular supply of well qualified and motivated young people for the growth sectors, particularly those with STEM qualifications.

Graduate recruitment will be important for employers, and promoting the availability of local graduates will help to attract investment and occupiers into the area.

A large workforce catchment will be important for employers and strengthening the connectivity and accessibility of the City Deal area will contribute to economic growth.

Housing is an important element of economic growth – providing housing for a young, well educated workforce will make a contribution to economic growth.

Strategy and Objectives Much of the City Deal documentation to date has focused on the capital investment programme. This strategy recognises the human capital element to the successful delivery of the outcomes – economic and employment growth.

The overarching objective of this strategy is to:

Build and maintain a workforce of sufficient scale, skills and ambition to deliver the City Deal infrastructure programme to the agreed delivery programme and support the development and sustainability of priority sites (contributing to the growth of priority sectors where possible) and captures benefits for Lancashire residents and businesses

Achieving this aim will require careful planning and management, recognising the scale of the ambition, the multiple partners with a role to play in delivery and the wider context in which City Deal activity is being taken forward.

The success of City Deal is dependent on both the outcomes of infrastructure investment, i.e. land and premises developed, and companies providing employment. Four strategic objectives have therefore been identified:

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Support the development of the construction industry and supply chain in the City Deal area as a priority sector for company and employment growth.

There are five objectives with regard to the construction industry, some of which require a medium term commitment. These are:

a) Strengthen the information, advice and guidance system in senior schools and sixth form and FE colleges to provide a pool of well qualified young people interested in pursuing careers in the construction industries.

b) Increase the number of apprenticeships across the broad range of occupations needed to support the construction industry, embedding a cultural change in company investment in training for the future workforce.

c) Work with local construction and supply chain companies to increase the internships, placements and graduate recruitment linked to supporting company growth.

d) Prioritise construction companies for bespoke business support through the Lancashire business development support system, including management development, planning and investing for growth and improving productivity.

e) Foresight: Explore construction related manufacturing and supply chain product development to increase the economic benefits from construction.

The most important step for Lancashire is recognising the construction industry as a priority sector in its own right, with the potential to provide both jobs and new manufacturing and supply chain opportunities which will contribute to economic growth.

Work with the construction industry, using procurement processes where appropriate, to increase training and employment opportunities for young people and older workers and increase social value.

There are four objectives with regard to the construction industry, some of which require a medium term commitment. These are:

a) Ensure a specific commitment to working with local schools and colleges with regard to IAG and site trips and visits in public sector funded construction contracts.

b) Prioritise groups which have difficulty accessing apprenticeships, including women, ethnic minority groups in public sector funded construction contracts.

c) Secure a commitment to recruiting older workers, where necessary using public sector skills support to make candidates work ready and attractive to contractors and sub-contractors.

d) Develop a social value ask/requirement which takes account of the other requirements being placed on contractors.

Provide the well qualified workforce needed to support employment growth and

meet replacement demand, with a special emphasis on the Lancashire priority sectors. There are five objectives with regard to the Priority sectors, some of which require a medium term commitment. These are:

a) Increase the STEM performance in senior schools, where necessary working with younger pupils.

b) Strengthen the information, advice and guidance system in senior schools and sixth form and FE colleges to provide a pool of well qualified young people interested in pursuing careers in the Priority sectors.

c) Increase the number of apprenticeships across the broad range of occupations needed to support the Priority sectors, embedding a cultural change in company investment in training for the future workforce.

d) Work with local companies, UCLAN and Lancaster University to increase the internships, placements and graduate recruitment linked to supporting company growth in the Priority sectors.

e) Establish the Lancashire Enterprise Zone as a leading centre for manufacturing, energy and environment and construction related vocational training, linked to new assets and the leading role of BAE Systems and its supply chain.

Develop a skills, training and recruitment support package for employers taking up business space on the City Deal linked priority sites and premises, including Preston City Centre, the Enterprise Zone and Cuerden as the major centres for new inward investment.

There are three objectives with regard to assisting company growth plans in the priority areas. These are:

a) Develop and promote a clear recruitment, skills and training offer for companies locating or expanding in the priority locations and sectors in the City Deal area.

b) Develop a clear pre-recruitment training offer to increase the prospects of local people securing employment and new employers recruiting a suitable workforce.

c) Assist new companies and those expanding their workforce to develop workforce training plans which incorporate apprenticeships, internships, graduate recruitment and other workforce up-skilling arrangements, including links to employer networks and training providers.

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Requirements to Support DeliveryDelivering the strategy will require a long term commitment by local partners and a considerable number of front line staff. Successful delivery will require:

Collaborative working to ensure that employment and skills activity is coordinated across providers to make the best use of available resources at a time of high demand.

Engagement with the majority of employers from a range of sectors and of varied sizes, and a system to keep up to date with employers’ requirements.

Sufficient flexibility for education and training provision to respond to local and changing needs as the economy develops.

A culture of regularly reviewing progress to reflect on achievements and identify priority topics for future intervention.

The actions outlined in the following section will ensure that these foundations are set as early as possible.

Measuring SuccessThe success of delivery of employment and skills plans will be measured against a series of metrics, including:

The number of City Deal area/Lancashire residents completing construction qualifications.

The number of City Deal area/Lancashire residents securing work in the construction sector and in businesses accommodated on City Deal supported sites.

The number of City Deal area/Lancashire residents completing qualifications and taking up employment in priority sectors.

The number of apprenticeships supported each year in the construction and priority sectors.

Delivering the strategy will require a successful inward investment effort to take up the new business space which the infrastructure projects will facilitate over the next ten years.

Management and Governance

The City Deal employment and skills opportunities contribute to and are part of Lancashire’s economic ambitions as set out in the Strategic Economic Plan. It will be important that City Deal partners participate in and are part of Lancashire skills plans.

There is a need, however, for local actions to be taken forward by City Deal partners and also for local partners to ensure that Preston and South Ribble residents and businesses take up opportunities from Lancashire wide initiatives.

The City Deal will require the leading local partners including education and training providers and representatives of employer groups to meet and review progress on a regular basis.

As a minimum, the City Deal will require an oversight or steering group reviewing progress and management information. Consideration needs to be given as to what additional arrangements are needed with regard to the construction industry. As suggested earlier, this sector needs to be regarded as a priority sector by City Deal partners.

Priority ActionsA series of early actions have been identified to support the Skills and Employment Strategy for Preston, South Ribble and Lancashire to be taken forward and the potential benefits to be maximised. Structured around the four strategic objectives, actions focus on priority steps to be taken and the role that partners will play in delivery. It is recommended that actions remain under review over time to allow the City Deal team and partners to respond to experience and the changing delivery context to take advantage of new opportunities and promptly address potential challenges.

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1 The City Deal Economy and Proposition

Key Messages• City Deal represents an important opportunity to deliver transport

infrastructure and drive forward employment and residential development across priority sites and locations in Preston and South Ribble.

• Over a ten year period, the ask to government document forecasts that the investments and flexibilities will generate more than 20,000 net new private sector jobs, including 5,000 in the Lancashire Enterprise Zone and 17,420 new homes.

• The City Deal area already forms an important element of the Lancashire economy, accounting for 21% of employment. Under a policy off scenario, employment is forecast to grow by 4%. City Deal investment presents an opportunity to enhance this growth trajectory.

• Oxford Economic Forecasts suggest that in the absence of intervention, employment in the City Deal economy will grow by 6,400 jobs (+4%) between 2015 and 2025. This growth rate mirrors forecasts for Lancashire as a whole. Significant investment, such as that proposed by City Deal, is required to drive higher rates of economic and employment growth.

• There is an issue of the timing of benefits. In effect new investment will begin to have an impact from year three onwards, rather than from year one of the agreement This reflects the City Deal focus on infrastructure investment.

• A considerable programme of activity is proposed within a relatively short timescale, requiring careful planning and monitoring of activity (including consideration of employment and skills requirements). .

• Investment propositions cover a range of development activities including the introduction of new highways, improvements to local highways and pedestrian environments and the development of new education and community facilities.

The City Deal in Preston, South Ribble and Lancashire1.1 The Preston, South Ribble and Lancashire City Deal was the first of 20 second wave agreements, signed in September 2013. The City Deal was developed by local partners to drive forward local growth by empowering the area to make the most of its economic assets and identified opportunities. City Deal status is valid for ten years from 2013/14 to 2023/24.

1.2 Over the period, the ask to government document forecast that the requested investments (£334m) and flexibilities will generate:

More than 20,000 net new private sector jobs, including 5,000 in the Lancashire Enterprise Zone;

Nearly £1 billion growth in Gross Value Added (GVA);

17,420 new homes; and £2.3 billion commercial investment leveraged.

1.3 Given the emphasis on transport infrastructure improvements and the time needed to complete work, there is an issue of the timing of benefits. In effect new investment will begin to have an impact from year three onwards, rather than from year one of the agreement.

1.4 To achieve the targets, investments are focusing on the development of strategic transport infrastructure and bringing forward strategic sites to deliver both employment and housing growth.

1.5 The core economic challenges that needs to be addressed is the need for critical infrastructure – a considerable programme of investment is required to overcome barriers to further sustainable housing and employment growth. Insufficient capacity on the highway network has been identified as a particular challenge.

1.6 The City Deal investment will provide South Ribble and Preston with a 20 year land supply for commercial and residential development.

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The City Deal EconomyEmployment

1.7 As of 20152, the City Deal economy provides 158,000 jobs. It accounts for 21% of employment in the Lancashire LEP, a proportion that has fallen two percentage points over the last ten years. This reflects static employment levels in the City Deal area (with annual peaks and troughs), at a time when employment grew 7% Lancashire wide.

1.8 Employment in the City Deal area has only recently returned to close to pre-recession levels while the Lancashire wide recovery has been quicker with 2005 employment levels exceeded in 2013.

1.9 Prominent employment sectors in the City Deal area are:

Human health and social work activities (24,500 jobs);

Wholesale and retail trade, (24,100 jobs); and

Construction (19,600 jobs)

Manufacturing (11,200).

2 Oxford Economics Forecasts, April 2015

1.10 Oxford Economic Forecasts suggest that in the absence of intervention, employment in the City Deal economy will grow by 6,400 jobs (+4%) between 2015 and 2025. This growth rate mirrors forecasts for Lancashire as a whole. Significant investment, such as that proposed by City Deal, is required to drive higher growth.

1.11 Sectors forecast to experience the highest growth rates in the City Deal area under a policy off scenario are real estate activities (+17%), construction (+16%), information and communication (+15%) and administrative and support service activities (+15%). In actual terms, the largest employment gains and losses by sector are shown below. Whilst accounting for 21% of employment overall, the City Deal area is forecast to account for 36% Lancashire’s growth in construction and 39% of losses in public administration and defence.

Largest Forecast Employment Change by Broad Sector Top Forecast GainsConstruction +3,200 (+16%)

Administrative and support service activities +2,100 (+15%)

Wholesale and retail trade +1,100 (+4%)

Top Forecast LossesPublic administration and defence -1,800 (-14%)

Manufacturing -1,400 (-12%)

Education -300 (-3%)

Source: Oxford Economics Forecasts, April 2015

GVA Contribution

1.12 In line with its employment share, the City Deal authorities currently contribute 21% of Lancashire’s Gross Value Added (GVA). As with employment, this contribution reduced between 2005 and 2015 with reductions focused in Preston.

1.13 Oxford Economics Forecasts suggest that, under a policy off scenario, the City Deal area’s GVA will grow by 26% between 2015 and 2025. This forecast matches that provided for the Lancashire LEP area meaning that the gap in performance will remain consistent. Significant contributors to GVA growth are forecast to be the real estate (+£229m, +40%) and wholesale and retail (+£204m, +29%) sectors.

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City Deal Investment Proposals Overview of Activity Identified

Funds (£m)Major Highways/Transport SchemesEast-West Link Road Introduction of an east-west link to connect the North West Preston housing area to the Preston Western Distributor. 9.8

Preston Western Distributor A new road to link the A583/A584 to the motorway through a new junction on the M55 (including to improve access to the Warton Enterprise Zone) plus the provision of new link roads to proposed housing areas in Cottam and North West Preston.

104.5

Cottam Parkway Development of a new ‘parkway’ style railway station to serve the North West Preston housing area and provide park and ride opportunities through car access from the Preston Western Distributor to Preston, Manchester, Liverpool, Blackpool and further afield.

15.0

Broughton Introduction of a new bypass supporting congestion relief and improvements to M55 J1 and M6 J32. The scheme will support housing and employment land development in East Preston.

33.999

Preston Bus Station Refurbishment and regeneration of the bus station and multi-storey car park to create a public service hub, including the creation of a refreshed bus station, a new Youth Zone and enhanced public realm.

23.342

Pickerings Farm Link Road Introduction of a link road to connect the A582 Penwortham Way and the B5254 Leyland Road, to potentially include a new (or alternatively an improved) bridge across the West Coast Main Line. The scheme will support delivery of a major development scheme.

4.5

Moss Side Test Track Development of road infrastructure on the former Leyland Motors test track to enable residential development on the site. 2.05

Heatherleigh and Moss Lane Spine Road Provision of a spine road through the Croston Road site to link the Flensburg Way roundabout with Croston Road and Heatherleigh to provide access to a housing development site.

1.0

Cuerden Introduction of strategic site road infrastructure to unlock this major development site and allow development to commence. 5.05

South Ribble Western Distributor A series of interventions to reconfigure junctions (at Chain House Lane, Golden Way, Stanifield roundabout, Tank roundabout and the Croston roundabout) and dual sections of the route (on the A582 from Cop Lane Bridge to the Broadoak roundabout, A582 Golden Way) to support the development of and access to the Cuerden site.

44.671

Penwortham By-pass Completion of the Penwortham by-pass to complement the South Ribble Western Distributor capacity improvements and connect through to Ringway. The route will help to by-pass the city centre while providing improved access to the motorway network and support the opportunity for new housing development.

17.5

New Ribble Bridge Designed to complete the Preston Western Distributor network between the M55 near Bartle and the M65 at Cuerden to relief pressure on the network in and around Riversway.

2.0

Other South Ribble Schemes Details to be determined later in the programme. 5.0

Major highways sub-total 268.412Local Highways and Public Realm SchemesGreen infrastructure Provision of green infrastructure to support development in North West Preston. 5.256

Fishergate Central Gateway Investment in high quality public realm including re-configuration of gateways to improve connections to the bus station and rail station as well as catalyse private sector investment in the city centre.

6.914

Public Transport Corridors and Local Centres – Preston

Broughton/Fulwood (north of the M55) – delivery of public transport, cycling and walking improvements along the A6 – one of the main routes into Preston City Centre from the north. Improvements may include more road space, redesigned junctions and public realm improvements. The corridor will also benefit from the introduction of the Broughton bypass.

12.125

Broughton/Fulwood (south of the M55) – delivery of public transport, cycling and walking improvements to the southern

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stretch of the A6. Improvements may be as described above. This corridor will also benefit from the Preston Western Distributor and the East West link road.

North West Preston/Cottam/Ingol/City Centre corridor – the B5411 is one of the main routes into Preston City Centre from the north west. Improvements remain to be confirmed but will mirror the proposals above. This corridor will also benefit from the introduction of the Preston Western Distributor and East West link road.

Warton to Preston Western Distributor – the corridor from Warton to Samlesbury will benefit from public transport, cycling and walking improvements. The scope of works remains to be confirmed but will mirror the items outlined above. This corridor will also benefit from the Preston Western Distributor.

Longbridge/Grimsargh/Ribbleton/City Centre – this scheme will improve the B6243 – one of the main routes into Preston City Centre from the north east – to support public transport use, cycling and walking.

Fishergate/Winckley Square – refurbishment of the Winckley Square Gardens and public realm improvements to retail areas leading on to the square.

Public Transport Corridors and Local Centres – South Ribble

Hutton to Higher Penwortham/City Centre – improvements to the A59 – one of the main routes into Preston City Centre from the west – to potentially include more road space, redesigned junctions and public realm improvements. The corridor will also benefit from the delivery of Penwortham by-pass and the South Ribble Western Distributor.

12.125

North of Lostock Lane – Lostock Hall – this corridor is one of the main routes into Preston City Centre from the south and will benefit from improvements to support greater public transport use, cycling and walking. The corridor will also benefit from delivery of the South Ribble Western Distributor.

South of Lostock Lane – a programme of improvements to potentially include providing more road space, improved junctions and public realm improvements to a main route into Preston City Centre from the south.

Bamber Bridge/City Centre – improvements to the A6/B5258 to enhance the experience of public transport users, cyclists and walkers on a main route into Preston City Centre from the south. The corridor will also benefit from delivery of the South Ribble Western Distributor.

Local enhancements sub-total 36.420Education and Community InfrastructureCommunity infrastructure – Preston Schemes identified to date are:

Guild Wheel Upgrade Link – to include surfacing an off-road section of the route, resurfacing a section and delivering an alternative route section that will link to employment land in Preston East. Lancaster canal towpath/cycleway – improvements to the existing towpath for cycling and walking. Grimsargh Green – drainage improvements to a football pitch to support improved health opportunities for local residents. East Cliff Cycle Link – completion of the cycle route to link South Ribble’s Central Park and Avenham/Miller Parks to the railway station and city centre, including creating a new cycle hub at the railway station. Allowance has also been made pre-development stage works at this point in the programme to explore opportunities for community provision across the City Deal area.

4.944 major sites

8.031 other

Education infrastructure – Preston Scheme details remain to be determined but expected to include the provision of new schools to cater for a growing population.

28.495

Community infrastructure – South Ribble Known schemes are: Landmark features – works to upgrade three local landmarks/gateway features – the lorry pop at the A582 Croston Road roundabout; the iron horse at Longmeanygate roundabout; and the Leyland tractor at Schleswig roundabout. St Catherine’s Park – creation of a new park next to the Cuerden strategic site with gates to allow access to the St

7.4 major sites

4.922 other

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Catherine’s Hospice grounds thereby creating a combined community space. Worden Park – a programme of improvements to include a new entrance, parking and community facilities in response to additional demands. Allowance has also been made pre-development stage works at this point in the programme to explore opportunities for community provision across the City Deal area.

Education infrastructure – South Ribble Scheme details remain to be determined but expected to include the provision of new schools to cater for a growing population.

11.203

Education and community sub-total 64.995Capital Financing CostCapital financing total 6.056City Deal total £375.883Source: Draft City Deal Infrastructure Delivery Plan 2015/18

1.14 The plan overleaf shows the location of major infrastructure schemes and their relationship to priority development areas (considered in Section 2).

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Timescales 1.15 An intense delivery period is proposed to coincide with City Deal timescales. The schedule below provides an overview of the anticipated delivery periods on a programme by programme basis.

City Deal Delivery Timescales by Programme Programme Name Years 1-5 (year 1 = 2014/15) Years 6-10 (year 6 = 2019/20)

1 2 3 4 5 6 7 8 9 10Preston Delivery ProgrammesMajor Highways/TransportEast-West Link RoadPreston Western DistributorCottam ParkwayBroughtonPreston Bus StationLocal Highways and Public RealmGreen infrastructureFishergate Central GatewayPublic Transport Corridors and Local CentresEducation and Community InfrastructureCommunity infrastructure – major sitesCommunity provisionEducation infrastructureSouth Ribble Delivery ProgrammesMajor Highways/TransportPickerings Farm Link RoadMoss Side Test TrackHeatherleigh/Moss Lane Spine RoadCuerdenSouth Ribble Western DistributorPenwortham By-passNew Ribble BridgeOther South Ribble SchemesLocal Highways and Public RealmPublic Transport Corridors and Local CentresEducation and Community InfrastructureEducation infrastructureCommunity infrastructure – major sitesCommunity provisionCapital FinancingCapital financingSource: Draft City Deal Infrastructure Delivery Plan 2015/18

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The City Deal Investment Fund1.16 A nominal allocation of £100m from the £150m local property allocation has been identified for the City Deal Investment Fund. The Fund, invested as a new venture within the wider Lancashire Pension Fund, intends to be co-invested in housing and development schemes across the City Deal area. All investments are made on a commercial basis.

1.17 To date, one substantial award has been made of approximately £18m to support the development of new student accommodation at the bottom of Friargate in Preston. The pipeline of activity suggests that a combination of scheme purchase and development will be supported, with the mix to be adjusted throughout the investment period to maintain an acceptable level of risk. Hotel and student accommodation schemes have been identified to offer good yields within the City Deal area although all schemes are assessed on an individual basis. The drawdown of funds will be dependent on the portfolio of schemes supported by the Fund as will the level and timing of funds being returned to the investment pot.

Conclusions 1.18 Whilst the City Deal economy already makes an important contribution to the Lancashire economy, City Deal investments present an opportunity to enhance growth prospects and counter sluggish growth over the last ten years.

1.19 A significant programme of infrastructure investments will be unlocked through City Deal investments. While some schemes have been clearly defined (e.g. highways requirements for major development sites), others (e.g. investment in education and community infrastructure) remain to be determined in detail.

1.20 Infrastructure investments will occur across the City Deal geography and across all years of activity. The delivery of infrastructure to major development sites will be important to ensure the commercial and residential opportunities they are expected to unlock can also be realised. Delays in infrastructure provision could have considerable implications for the roll out of supporting development plans, including the creation of new homes and employment opportunities.

1.21 Linked to this, there will be a requirement to ensure development partners are engaged throughout the infrastructure delivery programme. This will help to ensure that site development occurs promptly following the provision of infrastructure and that should any challenges arise during the City Deal delivery phase, appropriate solutions can be determined that continue to support wider development objectives.

1.22 Ongoing review of the City Deal Investment Fund investments will allow partners to remain alert to the nature and scale of both development and wider opportunities being taken forward. The final mix of activities will have implications for employment and skills requirements and the potential for wider attraction of investment into the City Deal area.

1.23 Together, the direct City Deal investments and development sites to be unlocked offer potential for the generation of considerable economic benefits and short to medium term skills and employment opportunities. Later sections of this report outline the scale and nature of opportunities/requirements and challenges expected to be generated to support partners across the private and public sectors to respond.

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2 Facilitating Wider Investment and Development

Key Findings

• City Deal investments will unlock a considerable programme of development activity on priority sites. Plans are in place to deliver over 1 million m2 of new employment floorspace and 16,950 homes over a 10 year period, a significant uplift on recent commercial and residential development levels.

• The major opportunities are in North East Preston and Preston City Centre, and Samlesbury EZ and Cuerden in South Ribble. These locations offer considerable potential to accommodate advanced engineering companies, logistics and distribution businesses and office based accommodation for high growth service sector activities.

• While Preston City Deal is expected to deliver early in the ten years, reflecting the timing of City Deal investment, the South Ribble contribution is expected to be greater in the second five year block, and is dependent on Cuerden delivering significant employment land from 2019/20 onwards.

• Seven housing priorities have been identified in City Deal records to form the focus of activity. Across a ten year development period, 16,950 homes are forecast to be created – 15,750 through new build activity and 1,200 by returning vacant homes to active use.

• The increase in completions envisaged by local partners will require the availability of attractive sites and a very active and significant housing development industry.

• It is also likely that significant new development of social and affordable housing, as well as increased activity in the private rented sector. These elements of new housing will require other types of investment finance.

• The proposed scale of new commercial and residential development is significantly higher than at any time in the past six years. It may take some time to establish the momentum needed to deliver the quantum of development.

• There is the potential for City Deal partners to work with the construction

industry to explore construction related manufacturing and supply chain products and product development to increase the economic benefits.

Introduction2.1 City Deal infrastructure investments intend to unlock a wider programme of activity including by providing road access to key sites and kickstarting private investment in the area with the catalyst of City Deal status and investments to also drive occupier interest in the resulting developments.

Unlocking Employment Land Development2.2 A total of nine employment sites have been identified to be supported by City Deal activity. Together they are forecast to create 1 million m2 of new floorspace across a range of use classes over 10 years, rising to 17.7 million m2

over 15 years. A summary of the scale, nature and timing of development on each site is provided below. All figures are based on the latest monitoring returns prepared for DCLG, discussions with planners from the two local authority areas and scheme details available in site masterplans. In many cases figures remain indicative as final scheme details remain to be confirmed

City Deal Employment Sites OverviewScheme Name 10 yr Scale of

DevelopmentPrimary

UseStart Year

End Year

Preston sitesNorth East Preston 359,510 m2 B2 and B8 2014/15 2023/24

Preston City Centre 146,788 m2 B1 2015/16 2023/24

North West Preston 9,700 m2 Retail 2014/15 Beyond CD

Sub-total 515,988 m2 - - -

South Ribble sitesPenwortham/ Lostock Hall 27,593 m2 B2 2016/17 2023/24

Cuerden 207,692 m2 Mixed use 2018/19 2022/23

Moss Side Test Track 30,000 m2 B2 and B8 2018/19 2020/21

Samlesbury EZ 145,360 m2 B2 2016/17 Beyond CD

Bamber Bridge 12,194 m2 B1 2016/17 2017/18

Lancashire Business Park 85,100 m2 B2 2023/24 Beyond CD

Sub-total 507,939 m2 - - -

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City Deal total 1,023,937m2 - - -Source: DCLG monitoring returns and ekosgen analysis

2.3 Emerging details of the site development proposals are as follows. The major opportunities are in North East Preston and Preston City Centre, and Samlesbury EZ and Cuerden. These locations offer considerable potential to accommodate advanced engineering companies, logistics and distribution businesses and office based accommodation for high growth service sector activities.

Employment Site Development SummariesScheme Name OverviewPreston sitesNorth East Preston The largest development opportunity area in the City Deal

programme. North East Preston brings together a package of sites clustered around J31a of the M6, including Bluebell Way, the Preston East Employment Area and redevelopment of the former Whittingham Hospital site. The area is expected to cater for a mix of B2 and B8 uses and provide over 350,000m2 of new floorspace.

Preston City Centre Development of an office based offer across key city centre sites including the Argyll Road depot and Parker Street sites. Private sector activity in this area also includes development of a new cinema and delivery of UCLan’s campus masterplan.

North West Preston Opportunities for mixed use development to round off the urban form of Preston through development of land south of the M55 stretching from the Cottam site in the west to land north of Eastway/south of the M55 to the east plus the Cottam Brickworks site.

South Ribble sitesPenwortham/ Lostock Hall

Development to include a focus on B2 provision on part of the Pickerings Farm site and small scale development at Cop Lane.

Cuerden South Ribble’s largest development area, covering 65ha. Although firm proposals for the scheme remain to be finalised, it is expected to cater for mixed use development.

Moss Side Test Track

Development of the former Leyland Motors test track to potentially accommodate a combination of B2 and B8 uses.

Samlesbury EZ Phased build out of the Enterprise Zone site to accommodate predominantly advanced manufacturing businesses.

Bamber Bridge Further build out of the existing South Rings employment site during an early stage of activity to provide predominantly office

accommodation.

Lancashire Business Park

Development to commence at the end of the City Deal period to expand current provision on the site, with a focus on B2 uses.

2.4 The annual profile of development over the City Deal period is forecast as follows. Annual completion levels are forecast to start from a low base and peak in 2023/24 (i.e. the final year of City Deal status). This reflects the time taken to gain momentum from site development and the considerable scale of activity being taken forward.

0

50,000

100,000

150,000

200,000

250,000

Annual Profile of Employment Land Development (m2)Source: DCLG monitoring returns

2.5 The employment land development capacity profile picks up markedly from 2018/19 onwards as important new infrastructure works reaches or nears completion. This profile has implications for the timing of economic and employment benefits from City Deal investments.

2.6 Preston City Deal related investment is expected to deliver early in the ten years, reflecting the timing of City Deal investment and the impact of some recently completed public realm works.

2.7 The South Ribble contribution is expected to increase during the second five year block of work, and is dependent on Cuerden delivering significant employment land for development from 2019/20 onwards, and over 200 hectares in total.

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2.8 The availability of employment land is expected to increase markedly from 2019/20 onwards, providing a 20 year legacy to support further economic and employment growth up to 2030 and beyond.

City Deal Employment Sites – Annual Development Profile (000’s m2)*Year 1-5 (year 1 = 2014/15 Year 6-10 (year 6 = 2019/20

PrestonScheme 1 2 3 4 5 6 7 8 9 10

North East Preston 22 <1 <1 <1 33 33 78 46 79 67

Preston City Centre - 22 11 8 20 10 - - 25 50

North West Preston <1 5 <1 <1 <1 <1 1 1 <1 <1

Preston sub-total 22 28 12 9 53 43 79 47 105

118

South RibblePenworth./Lostock H’ll - - 3 - 7 3 4 3 4 4

Cuerden - - - - 70 34 34 34 34 -

Moss Side Test Track - - - - 10 10 10 - - -

Samlesbury EZ - - 19 18 18 18 18 18 18 18

Bamber Bridge - - 5 7 - - - - - -

Lancs Business Park - - - - - - - - - 85

S. Ribble sub-total - - 28 25 105 66 66 55 56 10

7

City DealCity Deal total 22 28 40 34 158 109 14

5 102 161 225

Source: DCLG monitoring returns * totals may not add due to rounding, all figures shown to the nearest 1,000

2.9 The employment land made available in the final thee years of City Deal investment totals over 400 hectares, most of which will be developed in the 2025-2035 period.

Unlocking Residential Development2.10 Seven housing priorities have been identified in City Deal records to form the focus of activity. Across a ten year development period, 16,950 homes are forecast to be created – 15,750 through new build activity and 1,200 by returning vacant homes to active use.

2.11 This level of development across a considerable number of sites will require the engagement of both large and medium sized housebuilding companies for a sustained period.

2.12 It is also likely that significant new development of social and affordable housing, as well as increased activity in the private rented sector. These elements of new housing will require other types of investment finance.

City Deal Residential Sites OverviewScheme Name 10 yr Scale of

DevelopmentStart Year End Year

Preston sitesNorth West Preston 5,212 units 2014/15 2023/24

Preston City Centre 3,425 units 2014/15 2023/24

Re-use of vacant homes 1,200 units 2014/15 2023/24

Sub-total 9,837 units - -South Ribble sitesPenwortham and Lostock Hall 1,676 units 2014/15 Beyond CD

Leyland and Cuerden 2,606 units 2014/15 Beyond CD

Bamber Bridge 761 units 2014/15 2022/23

Other priority sites 2,070 units 2014/15 Beyond CD

Sub-total 7,113 units - -City Deal total 16,950 units - -Source: DCLG monitoring returns and ekosgen analysis

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2.13 An overview of the anticipated housing development schemes is provided below.

Housing Site Development SummariesScheme Name OverviewPreston sitesNorth West Preston City Deal’s largest residential development opportunity

which includes the Cottam Hall development site (capacity for up to 1,100 units) to be delivered as part of the Central Lancashire New Town urban extension.

Preston City Centre Development of new housing provision on key city centre sites, including the Argyll Road depot and Parker Street sites.

Re-use vacant homes A programme of refurbishment works, tailored to the needs of individual properties, to allow vacant, predominantly terraced, stock to be returned to active use.

South Ribble sitesPenwortham/ Lostock Hall

Development will be focused on the Pickerings Farm site (79ha site) and redevelopment of the former Lostock Hall gasworks site to deliver almost 1,700 new homes.

Leyland and Cuerden South Ribble’s largest development area, covering 65ha. Although firm proposals for the scheme remain to be finalised, it is expected to cater for mixed use development.

Bamber Bridge Delivery of new housing across a package of sites, including the former Arla Foods site on School Lane and land at Brindle Road.

Other priority sites Sites yet to be determined but offering potential for housing development over the course of the City Deal programme.

2.14 The development profile shows that annual completions are forecast to peak during 2019/20 at over almost 2,400 units per annum. In three of the ten years, completions will exceed 2,000 units per annum and in a further four years are forecast to exceed 1,500 units.

0

500

1,000

1,500

2,000

2,500

3,000

Annual Profile of Housing Unit CompletionsSource: DCLG monitoring returns

2.15 The profile of completions on individual City Deal sites is outlined below. This shows that momentum will be built over the early years with strong completions forecast from 2016/17 onwards across the majority of sites.

City Deal Residential Sites – Annual Development Profile (number of units)2014/15- 2018/19

Years 1-5 (year 1 = 2014/15)Scheme 1 2 3 4 5North West Preston 74 214 469 521 495

Preston City Centre 37 231 248 283 304

Re-use of vacant homes 120 120 120 120 120

Preston sub-total 231 565 837 924 919Penwortham/ Lostock Hall 48 65 74 234 210

Leyland/Cuerden 120 116 90 281 426

Bamber Bridge 55 67 54 135 150

Other priority sites 146 263 203 146 118

S. Ribble sub-total 243 268 238 670 806City Deal totals 600 1,076 1,258 1,720 1,823Source: DCLG monitoring returns

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2.16 While numbers of completions decline slightly towards the end of the second five year period, it is likely that new development sites will be brought forward to increase completions to above the 2,000 per annum mark.

City Deal Residential Sites – Annual Development Profile (number of units)2019/20 – 2023/24

Years 6-10 (year 6 = 2019/20)Scheme 6 7 8 9 10

North West Preston 774 704 692 647 622

Preston City Centre 506 446 433 468 469

Re-use of vacant homes 120 120 120 120 120

Preston sub-total 1,400 1,270 1,245 1,235 1,211Penwortham/ Lostock Hall 210 210 210 210 205

Leyland/Cuerden 421 355 292 235 270

Bamber Bridge 110 95 65 30 0

Other priority sites 257 237 233 233 234

S. Ribble sub-total 761 680 587 495 495City Deal totals 2,398 2,167 2,045 1,943 1,920Source: DCLG monitoring returns

2.17 To put these figures into context, over the last three years a maximum of 3,080 dwellings (recorded in 2014/15) have been completed per year across the whole of the Lancashire LEP area. This has, however, been the result of a long period of limited new development and the aftermath of the recent recession. As a consequence there is considerable frustrated demand.

2.18 Nevertheless, the increase in completions envisaged by local partners will require the availability of attractive sites and a very active and significant housing development industry. Private sector completions typically account for approximately 85% of completions. The availability of mortgage finance will also be a factor in determining levels of demand.

Capturing Wider Construction Benefits2.19 The scale of direct infrastructure investment and facilitated development presents significant opportunities for the supply chain and associated capture of wider benefits. Research by LEK Consulting3 suggests that for every £1 of direct construction spend, £2.84 of economic activity is generated, incorporating £1 of direct impact, £1.09 of indirect impact and £0.75 of induced impact. Using this assumption, City Deal infrastructure spend of £369.8m could support economic activity totalling £1.0 billion (bn) and the site development activities would support economic activity valued at £6.4bn.

2.20 The sector is known to generate strong benefits as construction typically has:

A high economic multiplier effect as a consequence of its large value chain (as illustrated by the figures above);

Limited reliance on imports; and

A high level of labour intensiveness relative to other sectors.

2.21 It is estimated that for every £1 of construction spend, £0.90 is retained locally and 93% of the supply chain is sourced domestically4. Based on the City Deal infrastructure spend, this suggests that over £330m of spend will be retained locally with a further £2.0bn retained of estimated site development costs presenting significant growth opportunities for local supply chains. Responsible procurement practice could help to further increase local benefit through the supply chain.

2.22 The delivery of construction activity is often fragmented with main contractors appointing sub-contractors to deliver significant elements of works who in turn work with a network of suppliers. Research conducted by EC Harris for BIS5 found that for a ‘typical’ large construction project (with a value of £20-25m) the main contractor may directly manage up to 70 sub-contracts, of which a large proportion have values of £50,000 or less.

3 Construction in the UK Economy, LEK Consulting, 20104 Construction in the UK Economy, LEK Consulting, 20105 Supply Chain Analysis into the UK Construction Sector, BIS, 2013

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2.23 This presents opportunities for a large number of businesses (predominantly SMEs, reflecting the business structure) to access opportunities as part of City Deal activity, both as direct sub-contractors and as suppliers to main contractors and sub-contractors. Many of the major construction companies (as well as smaller operators) are already conscious of the need to effectively manage supply chains and have an appetite to engage local suppliers to build local benefit.

2.24 Responsibility for the achievement of social value objectives (e.g. the employment of local residents and use of local supply chains) is often pushed down to sub-contractors. There is a need to coordinate activities and ensure overheads are not being duplicated across tiers of the supply chain if benefits are to be maximised and works delivered efficiently. This will ensure alignment with priorities outlined through the Government Construction Strategy.

Conclusions2.25 City Deal investments will unlock a considerable programme of development activity on priority sites. Plans are in place to deliver over 1 million m2

of new employment floorspace and 16,950 homes over a 10 year period which will be a significant uplift on recent development levels.

2.26 This level of development will require significant investment by private sector property developers and housebuilders and at a level not seen in Lancashire for many years. Engaging with new commercial investors will be a key area of activity for the City Deal team and two local authorities.

2.27 The major employment land opportunities are in North East Preston and Preston City Centre, and Samlesbury EZ and Cuerden. These locations offer considerable potential to accommodate advanced engineering companies, logistics and distribution businesses and office based accommodation for high growth service sector activities. Securing new investment from advanced manufacturing and supply chain companies will be challenging.

2.28 While Preston City Centre is expected to deliver early in the next ten years, reflecting the timing of City Deal investment and the impact of some recently completed public realm works, the South Ribble contribution is expected in the second five years of the work, and is dependent on Cuerden delivering significant employment land for development from 2019/20 onwards.

2.29 Seven housing priorities have been identified to form the focus of activity. Across a ten year development period, 16,950 homes are forecast to be created – 15,750 through new build activity and 1,200 by returning vacant homes to active use.

2.30 The increase in completions envisaged by local partners will require the availability of attractive sites and a very active and significant housing development industry. It is also likely that forecasts will include significant new development of social and affordable housing, as well as increased activity in the private rented sector. These elements of new housing will require other types of investment finance.

2.31 Increased construction activity will have a very positive impact on the Lancashire economy, creating other jobs or helping to safeguard jobs in a broad range of sectors.

2.32 There is the potential for City Deal partners to work with the construction industry to explore construction related manufacturing and supply chain products and product development to increase the economic benefits from construction.

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3 City Deal Construction Related Employment and Skills Requirements

Key Findings

• City Deal activity will generate considerable opportunities for the construction sector, both through the delivery of infrastructure investments and the build out of employment and residential sites.

• There are three components to labour demand for City Deal related construction:

Housing, particularly new housing development

City Deal infrastructure investment in highway, education and community infrastructure

New commercial and industrial space.

• By far the greatest construction employment is the major housing building programme, although it is not clear if the envisaged scale of completions can be achieved. New building housing will require an annual workforce of almost 3,000 in the initial period, increasing to almost 5,000 post 2019.

• The total jobs requirement averages 4,156 jobs each year between 2014/15-2018/19 and 6,363 between 2019/20 to 2023/24. Not all of this employment will be in Preston and South Ribble companies, although it will support the expansion of the current employment base, in line with economic forecasts.

• There will be considerable demand for higher level skilled construction including project management, civil engineers, architects and surveyors. The overall demand forecast suggests over 1,500 jobs each year in the initial period, increasing to over 2,400 in the final five years of City Deal.

• There will also be substantial demand for a broad range of skilled trades including bricklayers, scaffolders, roofers, painters and decorators, glaziers and wood trades. Overall, the demand forecast suggests over 2,300 jobs each year in the initial period, increasing to over 3,670 in the final five years of City Deal.

• There will however be considerable recruitment and skills issues over the coming years. There is also likely to be considerable scope to increase

apprenticeships, graduate recruitment and older workers recruitment.

Total Scale of Anticipated Employment3.1 Assessment of the capital spend required to support a construction job year in the North West economy, suggests that the City Deal infrastructure investments will support over 4,300 construction job years with the build out of residential sites to support a further 16,100 construction job years and employment sites 11,800 construction job years.

3.2 Forecasts produced by the CITB Labour Forecasting Model, recognising the varied nature of both directly and indirectly supported City Deal activities, suggest that the total construction workforce requirement by year will peak in 2019/20 with a requirement for over 7,200 construction workers. In eight of the ten years considered, requirements will exceed 4,000 workers (see later analysis section for detail by year).

3.3 On average, an annual requirement of over 4,000 workers has been identified for the first half of the programme rising to 6,300 during the second half of delivery. Forecasts suggest that residential development will be a leading employment requirement with further consideration of the requirements for each element of activity considered in further detail later in this section.

Annual Average Employment Requirement Annual Average 2014/15-2018/19


Major highways/transport schemes 351 150

Local Highways/public realm 51 15

Education and community infrastructure 108 152

Housing: new build 2,958 4,965

Housing: refurbishment 32 32

Employment uses: office 441 544

Employment uses: industrial 110 329

Employment uses: warehousing 17 55

Employment uses: leisure and retail 88 93


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Higher Level Skills Requirement 3.4 Delivery of a large scale construction programme will require a considerable skilled workforce to plan, develop and oversee activity. Forecasts suggest that higher level skills requirements will average 1,584 during the first half of the programme and 2,434 during the second half. This represents approximately two fifths of overall forecast labour demand for construction.

3.5 The occupations in greatest demand are non-construction professional, technical and IT, other construction process managers and other construction professionals and technical staff.

Annual Average Employment Requirement: Higher Level Skills Annual Average 2014/15-2018/19


Senior, executive, and business process managers

226 365

Construction project managers 67 93

Other construction process managers 276 396

Non-construction professional, technical, IT 491 778

Civil engineers 115 153

Other construction professionals, technical staff

240 377

Architects 59 96

Surveyors 110 176


Other Construction Skills Requirement 3.6 Forecasts suggest that there will also be considerable demand across a range of construction trades. Again the demand for these is expected to be higher during the second half of the programme, with 2,376 required in the first half compared to 3,673 in the second. These figures equate to approximately three fifths of overall labour demand.

3.7 The occupations forecast to be in greatest demand are wood trades and interior fit-out, labourers, plumbing, heating, ventilation and air condition trades and electrical trades and installation.

Annual Average Employment Requirement: Other Construction SkillsAnnual Average 2014/15-2018/19


Wood trades and interior fit-out 381 622

Plumbing, heating, ventilation, air con. trades

255 419

Electrical trades and installation 249 405

Painters and decorators 173 284

Building envelope specialists 165 266

Bricklayers 112 181

Specialist building operatives (other) 106 156

Construction trades supervisors 96 121

Plasterers and dry liners 89 147

Roofers 81 132

Floorers 42 69

Glaziers 51 84

Scaffolders 39 64

Plant operatives 91 111

Plant mechanics/fitters 52 75

Steel erectors/structural 43 67

Logistics 49 63

Labourers nec* 293 407


3.8 Future skills requirements emphasise the range of opportunities available in the construction sector, including in higher skilled, typically higher paid occupations which are not always recognised. Publicising these could help to overcome negative perceptions of the industry. One stakeholder echoed the views of many when stating: “The biggest challenge is getting people to see construction as a worthy occupation to fill the skills gaps we have” while another commented “Our industry has been frowned upon as a last choice…[it is seen as an option] if you are not academically astute enough”.

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Overall Labour Demand and by Component 3.9 The total labour demand figure for City Deal related construction averages circa 5,000 jobs per annum. On the assumption that two thirds of these jobs will be in Lancashire based companies, these numbers are in line with the most recent economic forecasts for Lancashire which suggests construction employment will increase by 9,000 across Lancashire over the next ten years.

3.10 There are three components of development and labour demands:

Housing, particularly new housing development.

City Deal investment in transport, education and community infrastructure.

New commercial and industrial space.

3.11 By far the greatest construction employment is generated by the major housing building programme, which will require a very high level of activity over a long period. The requirements of the three components are considered below.

New Housing

3.12 Construction employment will be dominated by the scale of new homes planned, with an average requirement for 4,000 jobs per annum from 2017/18 onwards, after a steady build up. Over half of all jobs associated with house building will be in manual roles, although numbers of higher skilled jobs remain significant.

3.13 The construction employment numbers are dependent on new housing completion numbers reaching over 2,000 per annum by 2019/20. This would be an unprecedented level of new house building. Given the contribution of house building to total construction employment forecasts and the need to accommodate a growing workforce, this level of house building is needed to meet the employment growth aspirations set out in the City Deal agreement.

City Deal Housing Completions: Forecast Annual Profile2014/15 2015/16 201617 2017/18 2018/19

Phase 1 600 1,076 1,258 1,720 1,823

2019/20 2020/21 2021/22 2022/23 2023/24Phase 2 2,398 2,167 2,045 1,943 1,920

Source: City Deal Monitoring Records

Total Forecast Labour Demand Source: CITB Labour Forecasting Model

New Housing Labour DemandSource: CITB Labour Forecasting Model

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Highways

3.14 The major highways investments will require a substantial labour force in a number of years, peaking in 2018/19 and 2019/20 at over 600 jobs per annum.

3.15 The major highway schemes in these years include:

Preston Western Distributor

South Ribble Western Distributor

Broughton Bypass

Penwortham Bypass

3.16 It is likely that some other new major highways investment will be agreed for the post 2020 period.

Education and Community Infrastructure

3.17 The labour requirements for the education and community infrastructure programmes are more modest, with a peak year requirement of 200 jobs. The post 2020 forecasts, in terms of investment in education and community infrastructure, are estimates at this point.

3.18 New housing in particular, is likely to increase demand for nursery, primary and secondary schools over the next ten to fifteen years. Both nursery and primary school provision are likely to be locally based.

Highways Labour DemandSource: CITB Labour Forecasting Model

Education and Community Labour DemandSource: CITB Labour Forecasting Model

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Office Employment Space

3.19 The major investment in office space development will require a significant labour force in peak years, including over 1,300 posts in 2023/24. This peak year is based on new development at Cuerden.

3.20 Other significant years for labour requirements are in 2018/19 and 2022/23 at just under 800 jobs required. The early year’s new space and associated labour demand is dependent on new development in and around Preston City Centre.

Office Employment Space (m²): Forecast Development Profile2014/15 2015/16 201617 2017/18 2018/19

Phase 1 0 22,450 16,873 14,750 28,886

2019/20 2020/21 2021/22 2022/23 2023/24Phase 2 15,072 5,240 3,440 28,440 50,000


Industrial Employment Space

3.21 Labour demand for industrial employment space is expected to increase significantly from 2018/19 onwards, to a peak in 2023/24 with 600 jobs needed that year, twice the figure of previous years. This reflects the anticipated build out of Lancashire Business Park from that year.

Industrial Employment Space (m²): Forecast Development Profile2014/15 2015/16 201617 2017/18 2018/19

Phase 1 19,632 162 19,542 18,192 64,305

2019/20 2020/21 2021/22 2022/23 2023/24Phase 2 50,097 68,909 49,613 63,888 133,701


3.22 Industrial space is likely to be dominated by distribution and logistics space where there is demand for large(r) units close to the strategic road network.

Office Employment Space Labour Demand Source: CITB Labour Forecasting Model

Industrial Employment Space Labour DemandSource: CITB Labour Forecasting Model

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Leisure/Retail and Other Space

3.23 Developments in leisure/retail space are limited to three City Deal areas – North West Preston, Penwortham and Lostock Hall and Cuerden. In North West Preston, the majority of activity is expected in 2015/16 with development at Penwortham and Lostock Hall planned for 2016/17. Labour requirements are largely driven by the scale of development at Cuerden. The workforce requirement for this element of provision is forecast to peak at 203 posts in 2018/19. The largest requirements within this will be for non-construction professional, technical, IT and other office-based staff and wood trades and interior fit out.

3.24 Cuerden will also drive workforce requirements associated with storage and distribution as a result of 103,846m² of logistics floorspace due to be provided between 2018/19 and 2022/23. The logistics floorspace workforce requirement across the City Deal area is expected to peak at 95 posts in 2020/21.

3.25 Given the initial success of the Preston city centre public realm improvements, there is likely to be an increase in leisure related development over the next five years.

Construction Employment Growth and Replacement Demand

3.26 South Ribble has a very large construction sector and a number of local companies are likely to be involved in the house buildings and other works. The

economic forecasts suggests that there will be an additional 3,300 construction jobs in local companies by 20205 and the scale of activity outlined earlier would support this potential for growth.

Construction Employment Forecasts 2015 2025 Change

Preston 4,200 4,900 +700

South Ribble 15,400 18,000 +2,600

Lancashire 56,000 64,900 +8,900

Source: Oxford Economics

3.27 As well as the need for additional staff, the construction industry faces a change in terms of replacement demand, particularly at a time of increased activity. As a general rule, circa 3% of jobs per annum are required to meet replacement demand needs. This provides an estimate of over 2,000 opportunities per annum in the construction industry each year in Preston and South Ribble.

Conclusions 3.28 There are three components to labour demand for City Deal related construction:

Housing, particularly new housing development

investment in highways, education and community infrastructure New commercial and industrial space.

3.29 The major housing building programme is the main driver of labour demand, although it is not clear if the envisaged scale of completions can be achieved. New building housing will require a workforce of almost 3,000 in the initial period, increasing to almost 5,000 post 2019.

3.30 Across all development types, the total construction jobs requirement averages 4,156 jobs each year between 2014/15-2018/19 and 6,363 between 2019/20 to 2023/24. Not all of this employment will be in companies based in Preston and South Ribble, although it will support the expansion of the current employment base, in line with economic forecasts.

3.31 There will be considerable demand for higher level skilled construction workers including project managers, civil engineers, architects and surveyors.

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Overall demand forecasts suggest over 1,500 higher skills jobs will be required each year in the initial period, increasing to over 2,400 in the final five years.

3.32 There will also be substantial demand for a broad range of skilled trades including bricklayers, scaffolders, roofers, painters and decorators, glaziers and wood trades. Overall, the demand forecast suggests over 2,300 jobs each year in the initial period, increasing to over 3,670 in the final five years of City Deal.

3.33 It is likely that the construction industry will expand considerably in Preston and South Ribble, and this will in part be due to City Deal related infrastructure commercial and residential development. There may however be considerable recruitment and skills issues over the coming years due to the scale of forecast workforce requirements and the time taken to train a growing workforce.

3.34 There is likely to be considerable scope to increase apprenticeships, graduate and older workers recruitment (including from the unemployed), as companies seek to address the challenges of recruiting and retaining a skilled workforce. The construction sector needs to plan ahead to cater for increased demanding.

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4 The Construction Industry and Skills Requirements

Key Findings

• Lancashire accounts for a significant proportion of the North West construction business base at 22%, while Preston and South Ribble account for 18% of Lancashire’s construction business base.

• Construction is an important employer in the City Deal area economy. In 2013 Preston and South Ribble had a workplace employment figure of 14,259 in the construction sector, some 10% of the workforce. This is a significantly higher proportion than regionally and nationally, across Lancashire less than 6% of total employment is in construction (35,328).

• The Lancashire specific economic forecasts suggest that the construction industry will increase by circa 8,000 jobs over the next ten years, of which circa 3,000+ could be based in Preston and South Ribble.

• CITB data, which provides a higher base employment number, suggests that in the first five years, City Deal will lead to a 5% increase in construction employment at the Lancashire level and potentially a 16% increase at the Preston and South Ribble level.

• It is not clear how the construction industry will be able to recruit the numbers of experienced personnel required over the next three to five years, and increasing demand could impact on some of the City Deal infrastructure projects. There is a strong case to work with the industry to increase apprenticeships, graduate recruitment and the recruitment of older workers to help companies meet their skills needs over the next five years.

• Given the planned infrastructure projects, the strong company and employment base and the recognised skills and recruitment difficulties, there is a rationale for local City Deal partners agreeing construction as a priority growth sector and developing new initiatives with the industry to tackle business, innovation and skills issues.

• Construction would benefit from a public-private super-initiative, which brings together all of the relevant resources, and deals with both short and medium term industry challenges.

Introduction

4.1 Construction markets typically operate at a level higher than individual local authorities and LEP areas. Skilled trade people travel across local authority and sub-region boundaries and Lancashire construction companies operate in a North West marketplace. This position is likely to become more pronounced as the level of demand for construction workers increases over the next four years and beyond, reflecting the considerable scale of construction forecast in the region.

4.2 This section of the report draws on the findings of the recently produced North West Construction Pipeline Analysis 2015, commissioned by the Greater Manchester Chamber of Commerce. It helps to set the context in which investments in Lancashire will be taken forward and emphasises the scale of potential employment and skills challenges and opportunities.

The Scale and Nature of Development4.3 There is a strong sense of optimism in the North West’s construction sector. Agencies note that both the overall scale and ambition of development is increasing and demand from potential occupiers of commercial and residential development is growing.

4.4 Research identified a £29.9 billion (bn) construction output pipeline for delivery across the North West between 2015 and 2018 inclusive, comprising:

£10.8bn infrastructure;

£6.8bn housing;

£4.9bn private commercial;

£4.3bn private industrial; and £2.9bn public non-residential.

4.5 The total (which is recognised to exclude some major projects due to limitations in available data) is only marginally less than the pipeline for the South East of the UK which has been valued at £33 bn.

4.6 Within these figures, the research suggests that Lancashire’s output will be £2.6bn – the smallest sub-regional programme in the North West and a proportion considerably below Lancashire’s share of construction employment. Reflecting the scale of development anticipated through City Deal, Lancashire has

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a higher than average proportion of housing projects in the pipeline (51% - £1.35bn).

4.7 In total, projects worth £40.4bn are due to start in the four years between 2015 and 2018 across the North West. This figure is a 30% uplift on the value of projects starting in the four year period from 2011 to 2014. A series of major construction projects are planned in the region with the top five being:

Top Five High Value Projects in the North West Planning SystemProject Name Location Value Start

YearEnd Year

The NuGen Project – Nuclear Power Station

Cumbria £14bn 2018 2024

Nuclear Decommissioning – UK Cumbria £7bn 2014 2028

Liverpool Waters Merseyside £5.5bn 2015 2040

Wirral Waters Merseyside £4.5bn 2015 2045

Sellafield Site Cumbria £1.7bn 2015 2019Source: Analysis from the North West Construction Pipeline Analysis 2015

4.8 Ensuring Lancashire can compete for labour in a competitive marketplace will be a priority. As one consultee commented, “you can always tell when there are big jobs in Manchester – it is difficult to recruit”. This challenge is expected to grow as all parts of the region embark on major construction programmes. At a time of high demand, it will be important for the sector to remain competitive and productive, including through effective management of supply chains. However, a competitive market is likely to result in recruitment and retention challenges for many employers.

Anticipated Employment and Skills Requirements4.9 Forecasts produced through the CITB Labour Forecasting model suggest that the scale of construction programme outlined above will result in:

Labour demand in the North West for 184,064 workers in 2015 and average labour demand for 122,000 workers between 2015 and 2018.

Training needs between 2015-2018 which will be 45% higher than the 2011-2014 average.

The top five professions in demand during 2015 being:

o Non-construction professional, technical, IT and other office-based staff

o Wood trades and interior fit out

o Construction managers

o Plumbing and heating, ventilation and air conditioning trades

o Electrical trades and installation

A typical training need for 10% of the workforce across all occupations, totalling 18,420 requirements during 2015.

Across all occupations, the increase in average training needs between 2011-2014 and 2015-18 exceeds 40%, ranging from 43% in plumbing and heating, ventilation and air conditioning trades to 53% for scaffolders.

4.10 Research also noted that even when people are training in construction, only a third receive the on-site competency based qualifications required to work in the sector.

4.11 The Lancashire specific economic forecasts suggest that the construction industry will increase by almost 9,000 jobs over the next ten years, of which circa 3,000+ could be based in Preston and South Ribble. In terms of employment growth, this makes construction a priority sector for the City Deal area.

4.12 Ensuring training providers and employers are alert to this required uplift and the employment and skills challenges it presents is now a priority. There are signs that some organisations are looking ahead, for example in the construction and engineering sector the iSTEM Centre being created by Eric Wright in partnership with Preston’s College which is due to open in September 2015 will create modern facilities in ‘real work environments’ and some FE colleges are offering roll-on, roll-off provision to meet employer needs. Given the scale of the opportunity outlined through this report, more work does however need to be done.

Construction Sector Employment and Business BaseThe Business Base

4.13 As well as being a sector expected to see its own growth in the coming years, the construction sector’s role is wider reaching. It serves as a facilitator of housing, employment and infrastructure development, to unlock the potential of the priority growth sectors and play an important role in achieving City Deal ambitions.

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4.14 Lancashire accounts for a significant proportion of the North West construction business base at 22%, compared to 21% of businesses across all sectors. Similarly Preston and South Ribble account for 18% of Lancashire’s construction business base, compared to 17% across all sectors. Therefore construction is slightly overrepresented in Lancashire compared to the North West, and in Preston and South Ribble compared to Lancashire.

4.15 The construction sector is dominated by micro-businesses of less than 10 employees. Whilst the UK Business Count shows there are no construction businesses with over 100 employees in Preston and South Ribble, a number of significant construction companies do have a presence in the City Deal area (including their headquarters in a number of cases), such as Eric Wright Group, Kiernan Construction, Conlon Construction and John Turner Construction Group.

4.16 The number of construction businesses in Preston and South Ribble has decreased since 2010, following the broad trend across Lancashire. The construction sector nationally was severely affected during the recession with the decline in Lancashire and specifically the City Deal authorities more severe than across the North West. Whilst showing a slight increase between 2013-14, the construction business base in the City Deal area and across Lancashire remains much smaller than in 2010.

4.17

When the construction business base is divided into sub-sectors, the strengths of the local business base become more apparent. The City Deal authorities have higher than national and regional average representation in specialist construction activities including electrical installation, joinery installation and specialised

construction activities (other than scaffold erection). In contrast, Preston and South Ribble are underrepresented in businesses specialising in the development of buildings projects, construction of domestic buildings, and construction of roads and motorways. These final two categories will be important components of City Deal delivery.

Top 10 Construction Sub-sectors in the Business Base, 2014

Construction Sub-sectors

Preston + South Ribble

Lancs.

North West England

Total No. (including other construction businesses) 960 5,360 24,290 229,065

Electrical installation 17.2% 16.7% 15.6% 14.6%

Plumbing, heat and air-conditioning installation 11.5% 12.1% 11.9% 11.9%

Joinery installation 11.5% 10.8% 9.1% 7.7%

Construction of domestic buildings 8.3% 8.9% 9.7% 11.5%

Development of building projects 7.8% 8.2% 10.7% 11.6%

Other building completion and finishing 7.3% 6.4% 6.3% 7.5%

Construction of other civil engineering projects nec 6.3% 6.2% 5.9% 6.0%

Specialised construction activities (other than scaffold erection) nec 6.3% 6.0% 5.6% 5.4%

Construction of commercial buildings 4.2% 3.9% 3.9% 4.0%

Painting 3.6% 3.8% 4.2% 4.1%

Source: UK Business Counts

The Employment Base

4.18 Construction is an important employer in the City Deal area economy. In 2013, Preston and South Ribble had a workplace employment figure of 14,259 in the construction sector, which equates to 10% of the workforce. This is a significantly higher proportion that regionally and nationally, for example across Lancashire less than 6% of total employment is in construction (35,328). Whilstt the City Deal area accounts for 23% of Lancashire’s total employment, it accounts for 40% of construction employment.

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Businesses by Size Band in the Construction Sector 2014Preston +

South RibbleLancashire North West England

Total No. 960 5,360 24,290 229,065

0-4 82.3% 82.7% 81.9% 84.4%

5-9 8.3% 9.6% 10.1% 9.3%

10-19 5.2% 4.5% 4.7% 3.9%

20-49 2.6% 2.2% 2.2% 1.7%

50-99 0.5% 0.6% 0.6% 0.4%

100-249 0.0% 0.2% 0.3% 0.2%

250+ 0.0% 0.0% 0.1% 0.1%

Source: UK Business Counts


4.19 Despite a decline in the construction business base in Preston and South Ribble since 2010, levels of employment in the sector saw a notable increase, before dipping from 2011 to 2013. In this respect, Preston and South Ribble have outperformed Lancashire and North West wide trends.

4.20 At the Lancashire level the sector’s decline was driven by reductions in specialised construction activities and the construction of buildings. The City Deal local authorities’ share of construction employment in Lancashire has increased by 1 percentage point since 2009 as a result. Review of more detailed data shows that between 2009 and 2013, civil engineering reported the fifth highest employment increase in Lancashire.

2009 2010 2011 2012 20130.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Employment in the Construction sector 2009-13 Source: BRES

Preston + South Ribble Lancashire

4.21 The employment in the construction of utility projects for electricity and telecommunications is significantly over-represented in Preston and South Ribble, although this is likely to be a recording issue i.e. where companies record their employment at a single location, although staff are based in multiple locations.

Occupational Profile

4.22 The occupations in which people are employed in the construction sector reflect the skills and qualifications available in the area. Some occupations are not present in the construction sector at this geography.

4.23 The predominant occupation is skilled trades, such as bricklayers and roofers, although the share of employment in Preston and South Ribble is slightly lower than the Lancashire figure, at 47% compared to 53%. Preston and South Ribble are slightly higher than the Lancashire figure for administrative and secretarial occupations, process, plant and machinery operatives and elementary occupations (i.e. typically the lower skilled, lower paid categories of employment). Professional and associate professional and technical occupations are under-represented in the City Deal area relative to regional figures.

North West

Lancashire

Preston + South Ribble

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

12%

13%

12%

10%

7%

7%

6%

5%

7%

7%

12%

50%

53%

47%

7%

6%

12%

7%

9%

12%

Occupations in the Construction Sector 2014Source: Annual Population Survey

Managers and Directors Professional Assoc. Prof & Tech Admin & Secreterial Skilled Trades Other Service

4.24 Although data included earlier in this report suggests that Preston and South Ribble’s construction employment levels has been relatively strong, the recession resulted in considerable turnover of construction employment during the recessionary period and beyond.

4.25 At a national level, certain construction occupations have seen a significant decline, for example between 2008 and 2009 there was a 42% decline in steel erectors, a 37% decline in floorers and wall tilers and a 36% decline in bricklayers and masons. High levels of turbulence in the sector will have resulted in some people previously employed in construction seeking opportunities in other sectors of the economy, resulting in a long term loss of skills in the sector. It may also have resulted in increased levels of self-employment as skilled workers struggled to find employment.

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Job Vacancies

4.26 Labour Insights6 data provides a record of construction jobs advertised in the Lancashire area in 2014 filtered by type. The figures show a peak in demand for construction workers in 2013 as the economy has continued to improve. Data for 2014 shows that Preston and South Ribble accounts for 20% of construction vacancies reported in Lancashire, a proportion that is half the local authorities’ share of employment in the sector. This trend has been broadly followed across the three years of data shown suggesting that labour turnover in the City Deal area may be less than across Lancashire.

4.27 The table opposite shows the most frequently recorded job vacancies in the construction sector by occupation. The most frequent number of vacancies in Lancashire in 2014 were for Plumbers, accounting for 17% of the construction sector total. Comparatively whilst Plumbers only accounted for 9% of vacancies in Preston and South Ribble in 2014, 2013 saw 46 vacancies which was the highest number in any occupation across the last 3 years which may account for a lower number the following year.

4.28 Other in demand occupations were Sales related occupations which were the most frequently reported in Preston and South Ribble in 2014 accounting for 18% of vacancies, and were the second most frequent in Lancashire. Also Carpenters and Joiners were in demand in both Preston and South Ribble and Lancashire, accounting for 16% of vacancies in 2014 across the City Deal area.

6 Labour Insights draws data from a combination of jobs advertised online, and therefore cannot capture all jobs advertised through alternative methods, for example as a result of word of mouth or people joining family run businesses which are factors in construction

Top Vacancies in the Construction SectorPreston and South Ribble 2012 2013 2014 2014%

Sales related occupations n.e.c. 2 12 17 18%

Carpenters and joiners 2 15 15 16%

Plumbers 13 46 9 9%

Collector salespersons and credit agents 5 22 9 9%

Customer service occupations n.e.c. 1 5 5 5%

Cleaners and domestics 6 1 4 4%

Bricklayers and masons 0 2 3 3%

Business sales executives 2 0 3 3%

Total (including other roles) 66 155 96 100%

Lancashire 2012 2013 2014 2014%

Plumbers 62 193 83 17%

Sales related occupations n.e.c. 14 45 45 9%

Carpenters and joiners 8 53 36 8%

Business sales executives 26 18 25 5%

Quantity surveyors - - 14 3%

Product, clothing and related designers - - 13 3%

Other administrative occupations n.e.c. - - 12 3%

Collector salespersons and credit agents 8 52 11 2%

Cleaners and domestics 15 8 11 2%

Customer service occupations n.e.c. 15 12 10 2%

Bricklayers and masons - 8 4 1%

Total (including other roles) 367 696 479 100%

Source: Labour Insights

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4.29 Of the 453 vacancies in Lancashire for which data was available, 88% were full-time roles and 3% were part-time. Additionally, 66% were permanent positions and 25% were temporary. The remaining 9% were apprenticeships which equates to 40 vacancies. As a quarter of job vacancies in construction were for temporary employment, this could have future implications for the skills and availability of labour in this sector. Comparatively in the City Deal area, of the 87 vacancies in construction recorded in 2014 for which data was available, 80% were full time and 8% were part-time, which is a higher percentage of part time jobs than the Lancashire average. Two thirds were permanent positions and 22% were temporary, which is similar to Lancashire. Apprenticeships accounted for 12% of positions in Preston and South Ribble, which is slightly higher than the Lancashire figure.

4.30 Of all vacancies recorded through Labour Insights in 2014, less than 1% (0.6%) were in construction related professions. This may be a result of low turnover in the workforce, but is also likely to be influenced by the method of recruitment, so a proportionately lower amount of vacancies in construction would be advertised online compared to other sectors.

4.31 When vacancies in 2014 were considered by occupation (SOC), the most frequent in the construction sector in Preston and South Ribble were skilled construction and building trades and sales occupations, both with 30%. The next highest were elementary administration and service occupations and business and public service associate professionals with 6% each.

4.32 Lancashire was similar in the top 2 occupations, with 28% skilled construction and building trades, and 14% sales occupations; however it reported a much wider range of occupations. Business and public service associate professionals accounted for 10% of vacancies, business, media and public service professionals were 7% and corporate managers and directors were 6%.

4.33 Construction vacancies recorded through Labour Insights were equivalent to 20% of Lancashire’s total vacancies in the sector. Of the most frequently recorded vacancies, 22% of skilled construction and building trade vacancies in Lancashire were in the City Deal area. However there was a higher proportion of sales occupation vacancies, with Preston and South Ribble containing 41% of Lancashire’s recorded vacancies in 2014.

Travel to Work Areas4.34 As large developments delivered through the City Deal are likely to draw labour from a wider pool than the LEP alone, it is useful to look at current travel to work areas, to see where skilled labour is likely to be sourced from, or lost to adjacent areas which is prevalent in Lancashire.

Travel to Work Patterns 2011 (all sectors)Residents and place of work

Total Residents in Work Inside Lancs. Outside Lancs.Residents – No. 556,742 476,105 80,637

Residents – % 100% 86% 14%Workers and place of residence

Total Workers in Lancs. Lancs. Residents

Reside Outside Lancs.

Workers – No. 542,956 476,105 66,851Workers – % 100% 88% 12%Source: Census 2011

4.35 Figures from the 2011 Census show the travel to work patterns across all sectors, and demonstrate that the flow of people commuting out of Lancashire for work is slightly greater than the flow of people commuting in - 14% of residents (80,600 people) work outside of Lancashire while 12% of employment (66,900) is accounted for by in-commuters. However these patterns do in part reflect Lancashire’s employment gap, as residents seek employment outside of the country. The most significant outward flows are to Manchester and Bolton (7,500 each), followed by Sefton and Wigan (6,700 and 6,400 respectively).

4.36 These patterns could have implications for the construction sector in Lancashire, as labour is drawn to other large construction projects in the coming years. As noted in Section 5, a series of significant construction requirements are anticipated across the North West (including Greater Manchester) which will lead to greater competition for skilled construction workers, both resident in Lancashire and drawn from across the North West marketplace and beyond.

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Construction Skills 4.37 The economic climate has impacted the construction sector particularly severely, which has had impacts on the quality and availability of skilled labour. Many skilled workers who lost their jobs during the recession may have found work in other sectors, and would be reluctant to move back into construction. This is the case for many young people who recently started their careers and other highly skilled workers (such as managers) who prefer to seek employment elsewhere.

4.38 Technological advances are a key driver of changing skills requirements in the construction sector. Methods of construction are subject to continuous but gradual evolution which needs to be adapted to by the workforce. An example of this is the sector’s adoption of prefabrication of modern methods of construction (MMC). MMC (off-site prefabrication or offsite construction) is seen as a way of improving inefficient or wasteful practices in the industry.

4.39 With increased emphasis on sustainable construction, demands for efficiency in construction and expectations of improved quality standards, growth in off-site construction (which in 2013 accounted for 7% of all construction output) may outstrip that of the traditional construction sector. Increased use of off-site construction brings a shift in the mix of skills required on-site (e.g. more fitters, more site managers, fewer carpenters). Additionally, increased use of automated tools requires new skills and makes other skills redundant.

4.40 With increased automation in construction as well as off-site methods, the role of management has changed to cover both off-site functions and coordinating on-site delivery of building processes. This will be a driver of demand.

4.41 Stricter guidelines in policy, regulation and legislation also come with associated skills challenges for the construction industry. This includes regulations to improve the quality of the construction output, reducing environmental impact and improving sustainability of building work, as well as the safety and wellbeing of employees. Health and safety legislation is particularly important in the construction sector, which requires advanced skills and knowledge to implement any changes and processes needed to comply with changing legislation. Whilst such legislation has had many positive impacts for the industry, further implications have been increased costs to businesses, as well as fewer employment opportunities for under 18 year olds due to greater health and safety requirements for that age group.

4.42 Other government priorities related to low/zero carbon and sustainability have implications for the sector. Policy initiatives include Zero Carbon homes – that from 2016 every new home in the UK will be required to be zero carbon. In order to meet this requirement, companies will need expertise related to using particular technologies and materials in buildings as well as in assessing building sustainability and carbon footprint. Green Deal provisions in the Energy Act 2011 have also resulted in an increase in the number of energy efficiency installations in homes and businesses.

4.43 Using records of 483 construction vacancies in Lancashire in 2014, the most frequently advertised skill requirement was civil engineering (72 jobs). The next highest were financial accountancy (59), facility management (57), sales (50), construction industry knowledge (42), mathematics (33) and plumbing (28). This demonstrates the broad range of skills and level of education required for various occupations in the construction sector. Preston and South Ribble had similar requirements for skills to the rest of the LEP, with the addition of renewable energy and carpentry in the top few positions.

4.44 Forecasts of changing skills demand from Working Futures predict that the shares of total construction employment in higher occupational groups (managers, directors and senior officials, professional occupations and associate professional and technical occupations) are expected to increase by over 25% from 2010 to 2020. This is consistent with increased involvement in international construction markets and greater use of off-site construction processes. It is also demonstrative of increased need for research and development and innovation in construction, which are key to maintaining competitiveness and supplying more service-based products. The share of construction employment in elementary occupations is, in contrast, expected to decrease.

4.45 Consultations completed during the course of this commission suggest that there is a trend for construction businesses to seek staff who are multi-skilled rather than focusing on a single trade. This provides greater flexibility in the workforce and allows team members to spend longer blocks of time on-site. There are signs that provision is moving towards project based learning and use of work-based environments to support this. Given the high level of self-employment in the sector, ensuring people are equipped with basic business skills is also a priority to support growth.

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Workforce Skills4.46 Lancashire has a relatively highly skilled construction workforce. Of people employed in the construction sector in Preston and South Ribble in 2014, the most frequently reported highest qualification was an NVQ level 3 with 28% of the workforce. The next most frequent was NVQ level 4 and over, with 24%. When compared to the Lancashire-wide figures, Preston and South Ribble had slightly more employees with an NVQ level 4 and over and 2% more with NVQ level 3. In terms of employees holding an NVQ level 2 or lower, Preston and South Ribble had lower figures than Lancashire. When compared with national figures, Lancashire had a higher proportion of construction employees with NVQ levels 3 and 4. The proportion of construction employees in Preston and South Ribble (7%) with no qualifications is slightly below the Lancashire (8%) and UK (9%) averages.

19+ Provision4.47 There were 181,490 learner aim starts in Lancashire in 2013/14 across all subject areas, a 1% decrease overall from the previous year. Starting at 8,660 in 2012/13 – 5% of the total - construction, planning and the built environment decreased by a larger proportion than average, decreasing by 6%.

Learner Aim Starts aged 19+ by sector

2012/13 2013/14Change 2012 – 2014

Construction, Planning and the Built Environment 8,660 5% 8,110 4% -6%

Total 183,100 100% 181,490 100% -1%

Source: Data Cube

Apprenticeships4.48 Since 2010 there has been a marked increase in apprenticeship starts in Lancashire, in line with national policy. The peak of apprenticeship starts across all sectors was in 2012/13 before falling the following year. This reduction in overall starts was a result of fewer advanced level apprenticeship starts – a 42% decrease, in part reflecting changes to eligibility for 24+ advanced learning loans. In 2013/14, there were 1,090 apprenticeship starts in construction, planning and the built environment which equates to just 3.8% of total starts.

4.49 When compared to regional and national figures, Lancashire has a slightly higher percentage of starts in Construction and Planning related apprenticeships, however this is still low relative to the size of the sector’s business base and employment share in Lancashire.

4.50 Apprenticeship starts in construction have decreased in absolute terms in Lancashire between 2005/06 and 2013/14. With construction apprenticeships recognised as a well regarded training route to employment in the sector and with major regional construction projects in the pipeline, there is a clear opportunity to boost apprenticeship starts in the sector.

4.51 These apprentice numbers have to be set against an employer base of over 5,000 and a workforce of 35,000, and as such could be regarded as modest. Consultations with training providers suggest that identifying sufficient employers to take on apprentices remains a challenge resulting in learner demand exceeding employer demand. Opportunities to explore the issues faced and identify responses to increase employer engagement in apprenticeships may therefore be required. There may also be a need (aside from apprenticeships) to update the careers advice offered to young people and adults to demonstrate the range of opportunities and career progression routes available in construction for people of varied abilities and interests, including those with an academic focus.

Agriculture & Animal CareInfo & Comms. Tech

Education & TrainingLeisure, Travel & Tourism

Construction & PlanningEngineering & Manufac. Tech.

Retail & CommerceHealth, Pub. Services & Care

Business, Admin.& Law

0% 5% 10% 15% 20% 25% 30% 35%Lancashire LEP North West England

Apprenticeship starts by sector subject area, 2013/14Source: SFR

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Construction Lancashire Learner Profile by age and level: Apprenticeship Starts

2012/13 2013/14No. % No. %

Advanced Level Apprenticeship 318 100% 140 100%U

nder 16

- - - -

16-18

170 54% 70 48%

19-24

110 35% 70 51%

25+ 30 10% - 1%

Intermediate Level Apprenticeship 470 100% 435 100%U

nder 16

- - - -

16-18

290 62% 290 66%

19-24

120 26% 130 29%

25+ 60 12% 20 5%

Source: Data Cube

4.52 The general decrease in apprenticeship starts between 2012/13 and 2013/14 was distributed differently between subject areas, with an overall reduction in apprenticeship starts of 19%. The most popular courses of Business, Administration and Law, and Health, Public Services and Care decreased by 26% and 25% respectively. Starts in construction, planning and the built environment also decreased by 27%. However starts in some subject areas such as engineering and manufacturing technologies, rose from 1,860 in 2012/13 to 2,090 in 2013/14 – an uplift of 13%.

Apprenticeship starts by sector: Change 2012/13 – 2013/14

2012/13 % 2013/14 % Change (%)Construction, Planning and the Built Environment 790 4% 570 4% -27%

Total 17,860 100% 14,384 100% -19%Source: Data Cube

4.53 The achievement rates for apprenticeships in construction in Lancashire are varied. In 2013/2014, achievement rates in construction, planning and the built environment were lower than leisure, travel and tourism, despite having a higher percentage of apprenticeship learner participation and number of starts.

4.54 The providers with the highest construction success rates were The North Lancashire Training Group Limited, Accrington and Rossendale College and Burnley College, all with over 90%. Of providers in the City Deal area, the North Lancashire Training Group Limited has facilities in Preston, along with Preston College which had success rates of 73.1% in 2013/14.

Construction Success Rates by Provider 2013/14Success Rate (%)

The North Lancs. Training Group Limited 97.4 Accrington And Rossendale College 90.4 Burnley College 90.4 Blackburn College 82.6 Salford City College 81.1 CITB- Construction skills 73.7 Preston College 73.1 Central College Nottingham 72.7 Lancaster And Morecambe College 68.2 Blackpool And The Fylde College 65.6 Source: SFANote: Table presents data on estimated providers with highest number of achievements in Lancashire.

Higher Education Provision4.55 Higher education is not a traditional route for many accessing work in the core construction sector but it does support the development of supporting occupations (e.g. civil and structural engineers, architects, town planners, project

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managers) and will be a route to growing highly skilled workers for the sector in response to forecast demand. Over 66,000 full time equivalent students are registered with HEIs located within the Lancashire LEP area, over 20% of which are post-graduate students.

4.56 Data for 2012/13 shows that a small percentage of higher education students were enrolled in courses related to architecture, building and planning, accounting for 1.3% in higher education institutions and 1.7% in further education colleges. Additionally, 2.2% of students were enrolled in higher education courses related to engineering and technology, which is a supporting subject for the construction industry.

Conclusions 4.57 Lancashire City Deal’s direct infrastructure investments and related commercial and residential development will be delivered in a very busy and competitive regional marketplace where skills shortages and recruitment difficulties are already apparent.

4.58 Lancashire accounts for a significant proportion of the North West construction business base at 22%, while Preston and South Ribble account for 18% of Lancashire’s construction business base.

4.59 Construction is an important employer in the City Deal area economy. In 2013 Preston and South Ribble had a workplace employment figure of 14,259 in the construction sector, which equates to 10% of the workforce. This is a significantly higher proportion that regionally and nationally, Lancashire has less than 6% of total employment is in construction (35,328). Opportunities for businesses and individuals in the City Deal area to capture benefits from supported activities could therefore be considerable, subject to adequate awareness and planning.

4.60 CITB data, which provides higher base employment numbers, suggests that in the first five years, City Deal will lead to a 5% increase in construction employment at the Lancashire level and potentially a 16% increase at the Preston and South Ribble level.

4.61 The Lancashire specific economic forecasts suggest that the construction industry will increase by circa 8,000 jobs over the next ten years, of which circa 3,000+ could be based in Preston and South Ribble. In terms of employment growth, this makes construction a priority sector for the City Deal area.

4.62 It is not however clear how the construction industry will be able to recruit the numbers of experienced personnel required over the next three to five years, and increasing demand may impact on some of the planned Lancashire infrastructure projects.

4.63 There is a strong case to work with the industry to increase apprenticeships, graduate recruitment and the recruitment of older workers to help companies meet their skills needs over the next five years. Greater awareness of the scale of employment and skills opportunities is also required across Lancashire and beyond to support businesses and individuals to prepare.

4.64 Given the planned infrastructure projects, the strong company and employment base and the recognised skills and recruitment difficulties there is a rationale for local City Deal partners agreeing construction as a priority growth sector and developing new initiatives with the industry to tackle business, innovation and skills issues.

4.65 There are already a number of organisations involved in addressing the challenges facing the construction industry at both a regional and national level. More importantly there are strong local industry networks and experienced training providers involved with some of the company base. Resources are available from a number of sources, although funding can be short term and limited.

4.66 Some of the solutions for industry challenges will involve the provision of more partnerships and more industry relevant FE courses, although these respond to medium term challenges. At the same time, the industry may have to consider recruiting older workers to meet some of the immediate challenges.

4.67 Gives these challenges, along with the need to introduce new technologies and processes, a single initiative, well resourced and with close industry involvement, could be the most effective way of addressing challenges and supporting company and employment growth.

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5 The Lancashire Employment Growth Context

Key Findings

• Recently produced economic forecasts for Preston and South Ribble show that in terms of actual growth in numbers of jobs, construction and professional, financial and business services will increase considerably, alongside important contributions from a range of other sectors.

• There are two major challenges with this policy off employment forecast:

the overall rate of employment growth is forecast to be lower than the national figure, while the City Deal and SEP stated ambition is to accelerate employment growth over the next ten years.

the forecasts indicate manufacturing employment declining over the next ten years, albeit at a slower rate than historically; while local partners envisage manufacturing at least stabilising and possibly increasing on the basis of advanced manufacturing and supply chain investment.

• Based on the nature of floorspace to be created and applying Homes and Communities Agency employment density guidance, the City Deal supported sites have the potential to accommodate over 30,800 jobs, although this reflects the long term legacy of City Deal.

• It is unlikely that the scale of floorspace envisaged with be fully developed and occupied within a ten year period. A more likely, although still ambitious, target is that two thirds will be developed and occupied over a ten to fifteen year period, suggesting an employment impact of 20,000 jobs.

• If the City Deal was to deliver 20,000 additional jobs across a range of sectors, it would considerably increase the contribution of Preston and South Ribble to Lancashire’s employment growth, helping to push the employment growth rate to a level which matches or exceeds the national growth rate and is in line with the LEP’s ambitions.

• Crucially, the City Deal area, through the successful development of the Enterprise Zone, has a critical role to play in strengthening manufacturing employment and securing new investment in advanced manufacturing and the supply chain.

Forecast Employment Growth: The Policy Off ScenarioEconomy Wide Forecasts5.1 The figures presented in this section refer to a policy off scenario, i.e. without City Deal activity and wider investments planned in Lancashire. Recently produced forecasts for Lancashire show that in terms of actual growth in numbers there will be a 29,900 uplift in jobs (+4%) between 2015 and 2025. The GVA uplift over the same period is forecast to be 26%.

5.2 The construction sector is forecast to experience the most significant growth, with an additional 8,900 jobs over the period, a proportionate increase of 16%. This is equivalent to 19% of the total jobs growth predicted in the next 10 years for Lancashire. When administrative and support and professional scientific and technical employment are combined, 16,000 additional jobs will be generated in the Lancashire economy by 2025. While these will require a range of qualification levels, it is likely that the majority will be at graduate level, with a significant proportion at post-graduate level.

Financial and insurance

Other services

Human health and social


Wholesale and retail

Admin and support

- 5,000 10,000 15,000

200 1,700 1,900 2,200 2,500 2,600 2,900 3,000

6,000 7,600

8,400 8,900

Forecast growth (jobs)

Lancashire Forecast Jobs Growth by Sector, 2015-2025Source: Oxford Economics

5.3 The forecast employment growth for Lancashire does not reflect the range of investment proposals aimed at increasing GVA and employment, or the ambition of the Strategic Economic Plan agreed by local partners.

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5.4 At the broad sectoral level, Professional, Financial and Business Services will account for a combined total of some 15,000 additional jobs In a number of sub-sectors there are strong clusters in various locations across Lancashire, including Preston. Other forecast growth sectors which could potentially benefit the City Deal area are creative and cultural (Preston) and distribution and logistics (South Ribble).

The City Deal Policy Off Scenario 5.5 The City Deal areas could be affected by some of the forecast job losses, such as in public administration in the Preston urban area and manufacturing in industrial areas. The forecast employment change in the City Deal area from the Lancashire policy forecast is illustrated below.

5.6 Overall, the City Deal authorities will experience a 4% uplift in employment between 2015 and 2025, equating to 6,400 additional jobs. This growth rate matches the Lancashire wide average, meaning that under a policy off scenario, the City Deal area will not close the performance gap. GVA growth is also forecast to equal the Lancashire wide trend.

5.7 There are two major challenges with the policy off employment forecast, both of which are at odds with the ambition of the Lancashire LEP and the Strategic Economic Plan. These are:

the overall rate of employment growth is forecast to be lower than the north west and the national figure, while the LEP stated ambition is to close the employment gap over the next ten years.

the OEF forecasts indicate manufacturing employment declining over the next ten years, albeit at a slower rate that historically; while local partners envisage manufacturing at least stabilising and possibly increasing on the basis of advanced manufacturing and supply chain investment.

5.8 The City Deal area has a critical role to play in addressing these two challenges, and is it important to the wider Lancashire economy that the planned scale of development set out in the City Deal agreement takes places over the next ten years to help protect existing employment levels in some sectors and support accelerated growth in others.

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Change in the Priority Sectors

5.9 As shown in the chart below, Lancashire’s priority sectors are predicted to experience mixed fortunes when extrapolating general economic trends and without local interventions. The financial, business and professional services sector is expected to increase significantly over the next decade, with Lancashire performing more strongly than regional and national trends at just under +15%. Employment in tourism and culture is also predicted to increase, albeit at a lower rate with Lancashire forecasting below the North West average at around +7%.

5.10 On the other hand, manufacturing employment is expected to have declined sharply in Lancashire by 2025, decreasing by 10%, proportionally larger than in the North West or England. Such forecasts are a result of recent declines in national manufacturing employment, which emphasises the importance of interventions through initiatives such as the City Deal to address these trends and sustain manufacturing as a core component of the Lancashire economy, particularly in advanced manufacturing. Similarly, the energy sector is expected to decrease in line with national trends, declining by 8% by 2025, a larger proportion than the North West and England.

The Priority Sectors In The City Deal Area5.11 Through the facilitation of site development, the City Deal is expected to support improved prospects in a number of Lancashire’s priority sectors. The current position in those sectors is outlined below, setting the benchmark for measurement of future impacts generated by City Deal and wider investments.

5.12 Achieving the employment and skills potential of these sectors, both within the City Deal area and across Lancashire, will be dependent on the provision of appropriate sites and premises, attracting investors and occupiers into the area (both of which City Deal activity can support) and enhancing local skills and employment prospects through delivery of actions proposed through the recently produced Sector Skills Plans. Developed in consultation with employers and providers, these documents are based on an understanding of current conditions and forecasts and outline actions to overcome challenges and build on identified opportunities that can benefit local businesses and residents.

Business, Finance and Professional Services

5.13 The business, finance and professional services sector plays an important role in Lancashire’s economy, employing 82,000 people (13% of total employment) and contributing £5.6bn GVA (22%) of the economy. The sector is particularly important for the City Deal area, with the largest concentration of activity in Lancashire being based around Preston and South Ribble. Predominant sub-sectors in Lancashire are legal and accounting activities, employment activities and real estate. The only sub-sector which is above the national average in terms of concentration is legal and accounting.

5.14 Lancashire has 10,200 financial and professional services businesses, which account for 22% of the business base. The business size profile is generally consistent with the national profile, however notably two thirds of the sector’s turnover is accounted for by medium sized businesses.

5.15 More than four fifths (82%) of employees in the FPS sector nationally are employed full-time, compared to 73% across the whole economy. Associate professional and technical and administrative and secretarial occupations are highly represented in the financial and professional services sector, accounting for 40% of the workforce.

5.16 City Deal sites in Preston City Centre are expected to play an important role in supporting the growth of this sector.

Manufacturing

5.17 Manufacturing is a further key sector within the Lancashire economy, employing over 80,000 people and contributing 20% of total GVA. A high proportion of activity is classed as advanced manufacturing, accounting for three quarters of total manufacturing employment, and 13% of GVA. Preston and South Ribble is home to BAE Systems, one of the UK’s most important manufacturing and exporting companies, based next to the Samlesbury Enterprise Zone.

5.18 Manufacturing makes up a significant proportion of the business base in Lancashire, with 3,400 businesses. Of these, 2,100 are within the advanced manufacturing sector. As is the general economic profile, the majority of businesses in manufacturing are micro businesses, however 20% of Lancashire’s large businesses are in the manufacturing sector.

5.19 Lancashire’s specialism in manufacturing is supported by a location quotient of 1.4 overall, with particularly high representations in the sub-sectors of

46


manufacture of leather and related products (LQ of 7) and manufacture of other transport equipment (LQ of 5), predominantly aerospace.

5.20 In line with national trends, 10,000 job losses occurred in the advanced manufacturing sector between 2009 and 2013 (accounting for 90% of losses in the manufacturing sector), representing a decline of 15%. Further, the sector is forecast to continue to decline over the next 15 years.

5.21 A series of City Deal sites are expected to continue to support Lancashire’s manufacturing sector, including the attraction of advanced manufacturing activities to the Samlesbury site of the Enterprise Zone.

5.22 Manufacturing is characterised by an older than average workforce, with a lower than average proportion of workers aged 16 to 29 (18% compared to 24%) and a higher proportion aged 45 to 64 (45% compared to 40%). This will result in high levels of turnover demand.

Energy Sector

5.23 The energy sector employs over 40,000 people in Lancashire, equating to 7% of the workforce. The sector has experienced employment growth in recent years, increasing from 2009 before levelling off in 2011. A third of energy and environmental technologies employment is located in South Ribble, which reflects the wider characteristics of the district and the presence of several large companies.

5.24 Key energy sub-sectors in Lancashire include nuclear, offshore gas, oil and wind, onshore wind, waste recovery and environmental technology and manufacture. Sub-sectors which are significantly overrepresented in the area are construction of utility projects for electricity and communications (6,900 employees/LQ 31.2), the production of electricity (1,300 employees/ LQ 1.9) and the processing of nuclear fuel (1,300 employees, LQ 5). These notable sub-sectors are contributed to by the presence of several key employers such as Springfield Fuels, EDF and AMEC PLC.

5.25 The largest occupational category in the energy sector in Lancashire is skilled occupations with 34% of the workforce. The next highest are managers, directors and senior officials with 18%, followed by process, plant and machine operatives with 14%.

5.26 Sites to be developed as part of the City Deal that could accommodate increased employment in the sector include Cuerden, due to its relative size and mixed development opportunities. Office developments in Preston City Centre

could also accommodate office-based functions of companies in the energy sector.

Visitor Economy

5.27 The visitor economy sector employs over 50,000 people which equates to 8% of total employment in Lancashire. A high proportion of this activity is centred around Blackpool, but it is represented across the county. When looked at through its sub-sectors, the largest source of employment is food and drink, followed by accommodation and sports and recreation, which account for 92% of the sector’s employment. Other sub-sectors which are relatively overrepresented in Lancashire include amusement and theme parks, (LQ 2.4), event catering activities (LQ 1.8) and other amusement and recreation activities (LQ of 1.6).

5.28 There are 3,800 businesses operating in this sector in Lancashire, which account for 8% of the total business base. As in the wider economy, these are predominantly micro and small businesses with fewer than 50 employees.

5.29 Due to the nature of the industry, a significant proportion of the workforce are young people, with 34% of workers being under the age of 30 compared to 24% on average in Lancashire. Additionally the most common occupation in the Lancashire visitor economy is sales and customer service staff, accounting for nearly a quarter (24%) of the workforce.

5.30 Preston City Centre is an important attractor of visitors (including international visitors, potentially linked to the location of the University of Central Lancashire) with the vibrancy of the centre to be further driven by City Deal activities.

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Policy On: City Deal ScenarioSite End Uses

5.31 The City Deal site end uses provide Preston and South Ribble with a platform to provide new business space and deliver significant economic and employment growth. Although many site details remain to be finalised, assumptions have been made regarding the nature of employment to be accommodated across the City Deal sites and the anticipated timing of opportunities.

Total Scale of Anticipated Employment

5.32 Based on the nature of floorspace to be created and applying Homes and Communities Agency employment density guidance, the City Deal supported sites have the potential to accommodate over 30,800 jobs.

City Deal Employment Sites – Gross Employment Potential B1 B2 B8 Other use

classesTotal

Preston Sites 10,092 4,083 2,779 485 17,439

South Ribble Sites 2,637 8,796 1,523 415 13,371

All Sites 12,729 12,879 4,302 900 30,810Source: ekosgen analysis

5.33 Planned construction programmes provide an indication of the potential timing of employment opportunities. The figures are indicative, reflecting annual forecasts for the creation of floorspace. It should however be noted that the timing of employment benefits will be dependent on the completion of phases of development/complete buildings, meaning that the annual profile is subject to change.

5.34 Given the focus of City Deal on infrastructure investment, the substantive employment impact is likely to be more apparent from year 3 onwards, increasing significantly again from year 5.

Forecast City Deal Sector and Occupation Breakdown – Supply Driven

5.35 Each priority site will have its own specialisms, focusing on the attraction of specific occupiers to reflect the nature of space available, site location and partner aspirations. Prominent sectors accommodated on City Deal sites are expected to be manufacturing, financial, professional and technical activities and transport and storage.

5.36 The forecasts include the potential for City Deal sites to support the growth of a number of the LEP’s priority sectors. Based on known site details, the full forecast supply led sector breakdown of employment is forecast as follows:

City Deal Employment Sites – Employment Potential by Sector – Supply Sector Preston

SitesSouth

Ribble SitesAll Sites

Manufacturing 3,471 5,886 9,356

Professional, scientific and technical 3,028 2,182 5,209

Transportation and storage 2,779 1,523 4,302

Administrative and support services 1,514 923 2,437

Financial and insurance 2,018 264 2,282

Information and communication 1,514 527 2,041

Construction 612 992 1,604

Real estate activities 1,009 396 1,405

Public administration 1,009 264 1,273

Wholesale and retail 437 373 810

Arts, entertainment and recreation 49 41 90

Total 17,439 13,371 30,810

5.37 Reflecting the nature of anticipated site occupiers, employment is forecast to span a range of occupations. Prominent occupations available on City Deal sites are expected to include professional and associate professional and technical roles (over 6,800) and skilled trades (5,200). These forecasts will exacerbate the challenge presented by high levels of replacement demand forecast in many occupations.

5.38 It is unlikely that the scale of floorspace envisaged with be fully developed and occupied within a ten year period. A more likely, although still

48


ambitious, target is that two thirds will be developed over a ten year period, suggesting an employment impact of 20,000 jobs in line with the City Deal targets.

5.39 This target is however ambitious given the time needed to deliver both infrastructure investment and then subsequent investment by developers and companies. A more likely timescale is 10 years from the completion of the initial major works, which would suggest years 13 and 14 post agreement.

5.40 If the City Deal was to deliver 20,000 additional jobs, it would considerably increase the contribution of Preston and South Ribble to Lancashire’s employment growth, helping to push the employment growth rate to a level which matches or exceeds the national growth rate, and in line with the LEP’s ambitions.

5.41 Crucially, the City Deal area, through the successful development of the Enterprise Zone, has a critical role to play in strengthening manufacturing employment and securing new investment in advanced manufacturing and the supply chain. The forecast supply side sector breakdown of employment by 2025 is as follows:

City Deal Employment Sites – Employment Potential by Sector – Supply Sector Employment

Potential All Sites

Developed and occupied

Jobs

Manufacturing 9,356 50% 4,678

Construction 1,604 70% 1,123

Wholesale and retail 810 70% 567

Transportation and storage 4,302 70% 3,011

Information and communication 2,041 70% 1,429

Financial and insurance 2,282 70% 1,597

Real estate activities 1,405 70% 983

Professional, scientific and technical 5,209 70% 3,646

Administrative and support services 2,437 70% 1,706

Public administration 1,273 70% 891

Arts, entertainment and recreation 90 70% 63

Total 30,810 64% 19,694

Employment Growth 5.42 Securing forecast employment growth will be dependent on the supply of appropriate sites and premises and growth in both investor and occupier interest, which will be in part driven by the quality of the local workforce. The investor and occupier markets need to be alerted to the scale of opportunity available in the City Deal area, both in terms of development and economic growth potential. Adjustments have been made to create demand led forecasts.

City Deal Employment Growth Policy On Forecast Sector Jobs –

Supply Driven

Commentary Jobs – Demand Adjusted

ManufacturingIncluding energy and environment, building products

4,678 Potentially an over-estimate. Requires significant new inward investment and expansion of supply chain companies at the EZ sites.

1,500

Construction 1,123 Potentially an under-estimate given OEF forecasts and planned works.

3,000

Wholesale and retail 567 Potentially an underestimate, with South Ribble attractive for distribution functions, and Preston could see an increase in the visitor economy through retail, bars, restaurants and hotels.

700


3,011 Significant employment growth and dependent on sites close to the strategic road network

3,000


1,429 Both South Ribble and Preston likely to see new investment and jobs.

1,500

Financial - insurance 1,597 Predominantly office based jobs, with a well qualified and younger workforce. Very important for Preston as a major urban centre with an attractive business district

1,597

Real estate activities 983 983

Professional, scientific, technical

3,646 3,646

Administrative 1,706 1,706

Public administration 891 Likely to be realised through Preston’s role as the capital\l of Lancashire

700

Arts, entertainment 63 Potentially an underestimate given 400

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and recreation plans for Preston city centre

Total 19,694 19,039Source: ekosgen estimates

5.43 The table below sets out a policy on forecast against the 2015 base employment levels and the policy off forecasts. Successful delivery of City Deal employment ambitions will have significant implications for employment levels across a range of sectors and will support the rebalancing of the economy by increasing levels of private sector employment whilst also helping to reduce the scale of anticipated manufacturing job losses.

City Deal Policy On Forecasts Sector 2015

baseline2025

policy on forecast

Jobs uplift

Policy on % uplift

Policy off % uplift

Manufacturing 11,159 12,659 1,500 13 -13

Construction 19,641 22,641 3,000 15 16

Wholesale and retail 24,114 24,814 700 3 2


6,386 9,386 3,000 47 7


4,083 5,583 1,500 37 15

Financial and insurance 2,796 4,396 1,600 57 -

Real estate activities 2,695 3,675 980 36 16

Professional, scientific and technical

8,219 11,819 3,600 43 13

Administrative and support services

13,967 15,667 1,700 12 15

Public administration 12,446 13,146 700 8 9

Arts, entertainment and recreation

3,166 3,566 400 13 13

Other1 1,320 - -

Total (selected sectors) 108,670 128,670 20,000 1816,000 180,000 20,000 12.5% 4%

Source: Oxford Economics Forecasts and ekosgen estimates1 Including care and higher education amongst others not captured by traditional employment floorspace

5.44 The policy on scenario is dependent on reversing manufacturing employment decline (including energy and environment, building products), and a much higher level of growth in business and professional services and digital and creative industries. In addition, construction employment potential needs to be fully supported. 5.45 If achieved in a ten year period, the City Deal will have to treble its employment growth relative to the policy off forecast, which reduces in the employment target is strengthened over 13-14 year to allow for the fully impact of the road infrastructure to have effect.

5.46 The impact of the policy on employment growth will be to change the make-up of the workforce, and a large proportion of the jobs will require a degree educated workforce, while others will require well qualified and skilled staff.

City Deal – Policy On Occupations OccupationManagers, directors, senior officials 2,500

Professional 3,600

Associate professional and technical 4,000

Skilled trades 1,600

Administrative and secretarial 2,000

Process, plant, machine operatives 2,000

Sales and customer services 1,500

Caring, leisure and other services 1,800

Elementary 1,000

Total 20,000Source: ekosgen estimates

5.47 This employment growth will also contribute to higher levels of apprenticeship places in some sectors and a marked increase in gradate recruitment.

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Conclusions 5.48 The single greatest challenge for the LEP is to reverse the trend suggested by the forecasts indicating manufacturing employment declining over the next ten years, albeit at a slower rate than historically. Local partners envisage manufacturing at least stabilising and possibly increasing on the basis of advanced manufacturing and supply chain investment.

5.49 The manufacturing opportunities need to be extended to include energy and environmental opportunities as well as the potential to manufacture building and construction related products. This will result in a broader range of opportunities for Lancashire to increase its employment base.

5.50 Based on the nature of floorspace to be created and applying Homes and Communities Agency employment density guidance, the City Deal supported sites have the potential to accommodate over 30,800 jobs if fully developed and occupied. This is in effect the City Deal long term (20 year) legacy.

5.51 It is unlikely that the scale of floorspace envisaged with be developed and occupied in full within a ten year period. A more likely although still ambitious target is that two thirds will be developed over a ten year period, suggesting an employment impact of 20,000 jobs in line with the City Deal forecast.

5.52 There is however an issue of timing as the full impact of City Deal investment will not be realised until a reasonable proportion of the infrastructure works are completed.

5.53 The 20,000 additional jobs would represent an increase of 12% from 2015, against a policy off forecast of 4%. The policy off forecast does however not take any account of the recent and planned investment in Preston and South Ribble.

5.54 The 20,000 additional jobs is likely to be achieved through a number of sectors, notably business and professional services, construction and logistics. These are all areas where the City Deal area has a number of strengths. Other important contributions include the leisure and visitor economy and arresting the decline of the manufacturing industry.

5.55 If the City Deal was to deliver 20,000 additional jobs, it would considerably increase the contribution of Preston and South Ribble to Lancashire’s employment growth, helping to push the employment growth rate to a level which matches or exceeds the national growth rate, and is in line with the LEP’s ambitions. The employment growth would require a well qualified workforce.

5.56 Crucially, the City Deal area through the successful development of the Enterprise Zone has a critical role to play in strengthening manufacturing employment and securing new investment in advanced manufacturing and the associated supply chain.

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6 The Skills and Employment Context for City Deal Led Economic Growth

Key Findings

• City Deal employment growth will be driven by new investment in manufacturing jobs, predominantly in the Enterprise Zone, logistics and distribution with a leading role for South Ribble and office based employment in and around Preston City Centre. Construction will underpin growth across all sectors.

• While new sites and premises will accommodate this employment growth, new inward investment and the availability of a quality workforce will be critical in securing growth.

• The workforce will become increasingly better qualified and higher skilled, particularly the younger workforce, and local education and training providers have an important role to play over the next ten years.

• While FE provision covers a range of occupations and sectors, it will be important to focus on the types of office based employment which will dominate employment growth.

• There is a need to ensure that young people leave school with good qualifications and move on to appropriate academic and vocational training. This will need to be accompanied by strong STEM performance and high quality IAG at an early stage.

• Apprenticeships will play an important role in providing employers with a young well qualified workforce in many sectors. Working with employers to increase the provision of apprenticeships will be a key priority for local partners.

• FE Colleges need to provide a regular supply of well qualified and motivated young people for the growth sectors.

• Graduate recruitment will be important for employers, and promoting the availability of local graduates will be an important element of marketing.

• A large workforce catchment will be important for employers and strengthening the connectivity and accessibility of the City Deal area will contribute to economic growth.

• Housing is an important element of economic growth – providing housing for a young well educated workforce will make a contribution to economic

growth.

6.1 This section considers the context in which the development of City Deal facilitated sites will be developed and occupied. A range of sectors are therefore considered to reflect the range of sites to be created and the occupiers to be targeted.

Changing Demand 6.2 Workforce skills demands are also changing across the economy, for both new recruits and existing workers. OEF forecasts provide data on Lancashire’s skills requirements over the next ten years. These suggest that:

Skills requirements across the workforce will increase with the proportion of employment requiring people qualified at Level 4 + expected to rise from 34% to 38% between 2015 and 2025 and the proportion requiring no qualifications to fall from 8% to 6%.

Across the construction sector, the proportion of the workforce requiring a Level 4 + qualification is forecast to increase while the proportion requiring a qualification at Level 2 or below is forecast to fall.

The four sectors forecast to report the largest employment uplifts will all require a higher proportion of people qualified to Level 4 + by 2025.

6.3 In general, there is a move to up-skill the labour force and this applies across all sectors. In some of the most important growth sectors, the future workforce is based on a younger and better educated and qualified workforce.

6.4 Forecasts for the City Deal area show that in Preston the proportion of employment requiring people qualified at Level 4+ is expected to reach 36% by 2025 (a 12% increase over 10 years) and in South Ribble the rate will reach 19% (a 17% increase from a low base). Conversely, the proportion of employment requiring no qualifications is forecast to fall by 17% in Preston and 14% in South Ribble. Providing people with the skills needed to access and progress in employment will therefore be a priority.

6.5 The need for greater anticipation and planning for local skills challenges has been widely acknowledged through both research and policy in recent years. The 2010 Skills for Sustainable Growth Strategy emphasised the need to ensure that skills provision meets the needs of employers and individuals. A report prepared by the OECD in the same year, drawing on an international review of local skills strategies, stated that “the assessment and anticipation of local skills

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and labour market needs is required to improve the efficiency of the local labour market; better match labour supply and demand to reduce bottlenecks; and better define the content and structure of education and training systems7.” Reviews of vocational education have been particularly keen to promote greater employer engagement in the planning of provision. The Richard Review of Apprenticeships noted the facilitation role local partners could play between employers and apprentices while the Wolf Review of Vocational Education recommended employer involvement in quality assessment and assessment activities.

Current Skills Challenges In Key Sectors6.6 Despite falling employment rates in the manufacturing sector, there are continued skills shortages, with 4,000 vacancies between June 2014 and June 2015. The most common vacancies were for engineering technicians, welding trade roles and production managers, however they covered a broad range of roles. The main skills requirements by employers were industry experience, knowledge of machinery, experience in sales, repair and CAD.

6.7 The manufacturing industry also shares similarities with challenges in construction, with an ageing workforce representing a large proportion of the current employee base that will need replacing with suitable skilled personnel in the coming years.

6.8 Changes in technology are also expected to have a significant influence on the demand for skills, as manufacturing industries increasingly seek employees with technologically advanced and industry specific skills such as Computer Aided Design (CAD) and 3D printing.

6.9 In the business, financial and professional service (FPS) sector, there were over 2,000 vacancies posted in Lancashire in 2014, an increase on the previous two years. A large percentage of these were in computer programming activities with around half of all vacancies in the sector (1,060). The next highest were in non-life insurance and insurance (290 and 100).

6.10 As in other industries, employment growth and technological change are key drivers in demand for skills in the sector. Skills requirements in the FPS sector cover both technical skills such as IT, analytical skills, legal, risk and change management as well as generic skills such as interpersonal and problem solving.

6.11 Work readiness of new recruits is also highlighted by employers as a skills issue, with many lacking key skills such as communication and interpersonal

7 Measuring Skills and Human Capital in Local Economies, OECD, 2010

skills, as well as an appropriate attitude towards work. The industry also has a skills challenge of requiring occupations with both specialist skills sets and wide-ranging abilities to be flexible to changing ways of working.

6.12 Given the scale of employment growth envisaged by City Deal partners and the move toward a higher skilled and well qualified workforce, it will be important that:

Young people leave school with good qualifications and move on to appropriate academic and vocational training. This will need to be accompanied by strong STEM performance and high quality IAG at an early stage.

FE Colleges are equipped to provide a regular cadre of well qualified and motivated young people for the growth sectors, particularly those with STEM requirements.

Apprenticeship numbers are increased to provide a well trained younger workforce in sectors where apprenticeships have a strong tradition as an entry level route to skilled employment.

6.13 It is important that education and training providers anticipate the changes in the economy and the increasing demand from employers for well qualified work ready young people.

Schools Performance6.14 Although it is not possible to link school performance to specific sectors, the table below shows that there is a significant range of GCSE achievement across Lancashire local authority areas. Preston and South Ribble are in the middle in terms of the percentage achieving 5+ A*-C grades in Lancashire, performing broadly in line with the national average.

6.15 Achievement rates in the City Deal authorities will help young people to prepare for accessing further employment or education. However, despite average performance in a Lancashire context, a considerable proportion of young people do not achieve the expected standards, which will have long-lasting implications for employment and skills challenges across the economy.

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0 20 40 60 80

BurnleyPendle

BlackpoolHyndburn

Blackburn with DarwenWest Lancashire

PrestonSouth RibbleRossendale

FyldeLancaster

WyreChorley

Ribble Valley

% of pupils

5+ A* - C Grades inc English and Maths, 2013/14Source: DfE

England average

6.16 Statistics for 2011/12 show that the majority of pupils in Lancashire continued in education after the age of 16, with the 89% doing so being in line with the national average. Apprenticeships were more commonly selected (6% against 4% nationally) and 8% did not sustain an education destination (for the first two terms of the 2012/13 academic year) which again is slightly higher than the national figure.

Further Education Provision6.17 Further education for young people and adults makes an important contribution to the overall level of skills within Lancashire’s resident population. Further education is especially important in the construction sector in providing the required skills for the workforce, with the majority of direct occupations in construction not following the higher education route. The data is drawn from two sources: the Statistical First Releases published by the Skills Funding Agency (SFA) and the Department for Business, Innovation and Skills, and the SFA’s Data Cube.8

8 The data contained on the Data Cube was analysed under the terms of ekosgen’s data sharing agreement with Lancashire Enterprise Partnership and the Skills Funding Agency. The agreement states that the Data Cube data must not be externally published, although following analysis of the data, it is permitted to make narrative statements about what it shows, such as trends over time, percentage change in the take up of particular provision etc.

6.18 The data included on the Data Cube counts the number of learning aims, rather than the number of learners, reflecting the fact that learners can be following numerous programmes of study at the same time, which may be at different qualification levels and cover different subject areas. The figures suggest that approximately 300,000 learners are entering and leaving FE provision per annum.

Learners Resident in Lancashire Category Definition No. of learning

aimsAchievements The number of learning aims, or apprenticeship

frameworks, that have been achieved.245,700

Enrolments Number of apprenticeship framework/learning aim enrolments. An enrolment indicated that the learner was on an apprenticeship framework or learning aim at some point during the period covered by the dataset.

335,000

Leavers The number of learning aims, or apprenticeship frameworks, that have a learning actual end date.

301,100

Starts Number of apprenticeship framework/learning aim starts. 298,400

Source: Data CubeNote: Starts based on learners with a 2013/14 start date and Achievements and Leavers based on learners with a 2013/14 leave data. Enrolments capture all learners who were learning in 2013/14.

6.19 Supporting learners to understand the range of employment opportunities currently available in the local area and anticipated in the future will be important to generate a workforce of sufficient scale and skills to support growth and personal career progression. The FE sector is expected to play an important role in providing an appropriately skilled young workforce so will require knowledge of the opportunities to be created at a high level and of specific sector/employer requirements.

19+ Provision

Data which is included in reports for publication must be drawn from publicly available data, such as that contained in the Statistical First Release publications.

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6.20 There were 181,490 learner aim starts in Lancashire in 2013/14, a 1% decrease overall from the previous year. There are significant numbers of learning aims with regard to health, public services and care, ICT and arts media and publishing as well as business and administration.

Learner Aim Starts aged 19+ by sector2012/13 2013/14 Change

No. % No. % No.

Preparation for Life and Work 63,500 35% 71,070 39% 12%

Health, Public Services and Care 22,830 12% 21,770 12% -5%

ICT 16,290 9% 16,380 9% 1%

Retail and Commercial Enterprise 13,640 7% 13,850 8% 2%

Arts, Media and Publishing 13,050 7% 11,590 6% -11%

Business, Administration, Law 9,150 5% 8,310 5% -9%Construction, Planning and the Built Environment 8,660 5% 8,110 4% -6%

Engineering and Manufacturing Technologies 6,120 3% 6,370 4% 4%

Languages, Literature, Culture 6,260 3% 5,340 3% -15%

Leisure, Travel and Tourism 5,600 3% 4,510 2% -19%

Education and Training 3,110 2% 3,260 2% 5%

Science and Mathematics 2,160 1% 2,160 1% 0%Agriculture, Horticulture and Animal Care 2,190 1% 2,050 1% -6%

History, Philosophy and Theology 1,610 1% 1,490 1% -7%

Social Sciences 610 0% 430 0% -29%

Unknown 6,740 4% 1,820 1% -73%

Not Applicable 1,610 1% 2,970 2% 84%

Total 183,100 100% 181,490 100% -1%

Source: Data Cube

6.21 It is important that engineering and manufacturing; construction, planning and the built environment; and training linked to the other growth sectors are

maintained if Lancashire as a whole and the City Deal area are to achieve target growth rates.

Apprenticeships6.22 Following a significant campaign to raise awareness and take up, government figures have shown that more school leavers are choosing to embark on apprenticeships in England, and the construction sector is still a major exponent of these. In a 12 month period between March 2013 and 2014, the number of 16 to 17 year olds entering apprenticeship programmes jumped from 41,738 to 49,228 – an increase of 15%. Similarly in Lancashire there has been a clear increase in total apprenticeships, peaking in 2012/13 – an uplift of 200%.

6.23 As with the analysis of further education, the charts in this section look at participation in apprenticeships by Lancashire residents. Since 2010 there has been a marked increase in apprenticeship starts in Lancashire since 2010, in line with national policy. The peak of apprenticeship starts across all sectors was in 2012/13 before falling in the following year. This reduction in overall starts was a result of fewer advanced level apprenticeship starts, which experienced a 42% decrease. This will at least in part reflect changes to 24+ advanced learning loans introduced from 2013/14.

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/132013/14

Apprenticship Starts: Change 2005/6 to 2013/14

Lancashire LEP England trend line

Source: SFR

6.24 Lancashire is similar to the national profile in terms of apprenticeship starts by sector, however business, administration and law are proportionately higher. When combined with health, public services and care; and retail and

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commercial these sectors account for almost 75% of apprenticeship provision in Lancashire.

6.25 Manufacturing accounts for 15% of apprenticeships which reflects the importance of the sector. The similarly important construction sector is not however supported by a higher than average number of apprentices, with its number of starts being relatively small. In 2013/14 there were 1,090 apprenticeship starts in construction, planning and the built environment which equates to just 3.8% of total starts.

6.26 When compared to regional and national figures, Lancashire has a slightly higher percentage of starts in Construction and Planning related apprenticeships, however this is still disproportionate to the size of the business base and employment in the sector.

Agriculture & Animal CareInfo & Comms. Tech

Education & TrainingLeisure, Travel & Tourism

Construction & PlanningEngineering & Manufac. Tech.

Retail & CommerceHealth, Pub. Services & Care

Business, Admin.& Law

0% 5% 10% 15% 20% 25% 30% 35%Lancashire LEP North West England

Apprenticeship starts by sector subject area, 2013/14Source: SFR

6.27 As demonstrated in the following figure, apprenticeship starts in construction have decreased in absolute terms in Lancashire between 2005/06 and 2013/14. This is likely to reflect the general trends in construction employment which peaked prior to the recession in around 2007. However as the industry has picked up following wider economic improvements, providers of construction apprenticeships say interest is climbing again.

6.28 With construction apprenticeships being recognised as a well regarded training route to employment in the sector and with major regional construction projects in the pipeline, there is a clear opportunity to boost apprenticeship starts

in the sector going forward to ensure that a skilled workforce is established of significant scale to deliver both City Deal and wider development ambitions.

Construction/ PlanningScience and Mathematics

Arts, Media and PublishingAgriculture/ Animal Care

Leisure, Travel and TourismInformation and Communication

Education and TrainingEngineering and Manufacturing

Retail and Commercial EnterpriseHealth, Public Services and Care

Business, Admin and Law

-1000 0 1000 2000 3000 4000

Change in Apprenticeship Starts by Subject 2005/6 - 2013/14Source: SFR

6.29 The other areas where apprentice numbers could be increased and which are particularly relevant to the City Deal partnership are ICT; arts, media and publishing; and leisure, travel and tourism

6.30 Employer numbers in ICT and arts, media and publishing are likely to be smaller than other sectors and many employers will be micro businesses. Increasing apprenticeship numbers may require additional assistance by local agencies. There remains a challenge of persuading and supporting more employers across all sectors of the economy to provide apprenticeship places, even in industries where the tradition of apprenticeships is strong and where skills shortages are a feature of the labour market.

Higher Education Provision

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6.31 Higher education provides a regular supply of well qualified young people, although employers tend to draw from a range of institutions rather than solely local providers. Over 66,000 full time equivalent students are registered with higher education institutions located within the Lancashire LEP area, over 20% of which are post-graduate students.

6.32 Data for 2012/13 shows that while numbers were substantial in relation to many of the service sector growth industries, a much smaller percentage were enrolled in courses related to architecture, building and planning, accounting for 1.3% in higher education institutions and 1.7% in further education colleges, and 2.2% of students enrolled in courses related to engineering and technology, which is a key supporting subject for the construction industry.

0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%

Subjects allied to Medicine

Business & Admin studies

Initial Teacher Training

Biological Sciences

Social studies

Creative Arts & Design

Business & Admin studies

Engineering & Technology

Creative Arts & Design

Social studies

Education

Biological Sciences

HE students in HEIs HE students in FECs

Subjects studied by HE students in Lancashire (FTEs), 2012-13Source: Higher Education and Local Growth, HEFCE

6.33 Wider subject provision will support the development of a workforce to occupy positions in priority sectors (e.g. business and admin studies for financial and professional services and creative arts and design for digital creative).

6.34 Potential investors and occupiers require an understanding of the scale and breadth of local HE provision. A strong HE base, generating a pool of highly skilled workers and that can build effective relationships with industry, will be an attractive feature, particularly where provision supports the growth of priority sectors. Promoting provision will also help to attract high quality students to Lancashire’s institutions and, aligned with the ambition of growth plans, help to retain graduates and attract skilled workers in from higher education institutions outside Lancashire to find work and progress their careers.

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Skills ForecastsForecasts by Industry

6.35 Most sectors are expected to see an increase in skills over the next decade, with the largest increase being in the professional, scientific and technological industry. Construction and manufacturing are expected to increase slightly in terms of the employees with level 4 qualifications and over, however the figure is forecast to remain under 30% in 2025.

0%10%20%30%40%50%60%70%80%

Level 4+ by Industry2015 2025Source: Oxford Economics

Note: Chart presents industry's with over 10,000 employees

6.36 The percentage of the workforce with level 2 qualifications or below is expected to stay much the same by 2025, decreasing slightly in sectors such as health and education at one end and increasing slightly in sectors such as manufacturing and construction at the other. These figures combined with those for level 4 qualifications suggest a polarisation of the workforce, between high skilled and low skilled employees which has been a common feature across broader geographies and timescales. Changing requirements will have implications for the planning and delivery of future education and training provision as well as information, advice and guidance offered through the education system, access to employment initiatives and job search support.

0%

10%

20%

30%

40%

50%

60%

70%

Level 2 or below by Industry2015 2025Source: Oxford Economics

Note: Chart presents industry's with over 10,000 employees

Forecasts by Occupation

6.37 The occupation with the highest proportion of employees with level 4+ qualifications is professional occupations; however this is expected to decrease slightly by 2025. In all other occupations, skills levels are expected to increase slightly in the same time period, the largest being in administrative and secretarial occupations.

6.38 Overall employees holding level 2 or below qualifications are expected to decrease across all sectors over the next 10 years, with the exception being amongst skilled trades which is expected to increase slightly. Given the strong manufacturing and construction sectors in the City Deal area, this may be an important consideration.

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0%10%20%30%40%50%60%70%80%90%

Level 4+ by Occupation 2015 2025Source: Oxford Economics

Conclusions 6.39 City Deal employment growth will be driven by new investment in manufacturing jobs, predominantly in the Enterprise Zone, logistics and distribution with a leading role for South Ribble and office based employment in and around Preston City Centre. It is important that new investors are able to access a well qualified workforce to meet their business objectives.

6.40 The level of employment growth in the City Deal area will play an important role in the Lancashire LEP meeting its economic growth ambitions set out in the Strategic Economic Plan. At the same time, the City Deal employment growth will benefit from Lancashire wide training and skills initiatives as well as locally planned and delivered activity.

6.41 New initiatives with regard to the constriction industry are particularly important to Preston and South Ribble, as are sector skills plans for advanced manufacturing and financial and professional services.

6.42 While new sites and premises will accommodate this employment growth, new inward investment and the availability of a quality workforce will be critical in securing growth. Given the ambition for growth in manufacturing employment, new inward investment will be crucial.

6.43 Over the next ten years, the workforce will become increasingly better qualified and with higher skills, particularly the younger workforce. It will be

important that local education and training providers help to ensure that young people leave school with good qualifications and move on to appropriate academic and vocational training. This will need to be accompanied by strong STEM performance and high quality IAG at an early stage. There will also be important considerations for the advice given to adults looking to access new employment opportunities and progress their careers.

6.44 FE Colleges need to provide a regular supply of well qualified and motivated young people for the growth sectors. While FE provision covers a range of occupations and sectors, it will be important to focus on the types of office based employment which will dominate employment growth.

6.45 Apprenticeships will play an important role in providing employers with a young well qualified workforce in many sectors. Working with employers to increase the provision of apprenticeships will be a key priority for local partners.

6.46 Graduate recruitment will be important for employers, and promoting the availability of local graduates will be an important element in up-skilling with workforce, as well as attracting investment and occupiers into the area.

6.47 A large workforce catchment will be important for employers’ and strengthening the connectivity and accessibility of the City Deal area will contribute to economic growth. Similarly, housing is an important element of economic growth – supporting population growth and providing housing for a young well educated workforce will make an important contribution to achieving economic growth ambitions.

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7 Strategy ObjectivesIntroduction7.1 Much of the City Deal documentation to date has focused on the capital investment programme. This strategy recognises the human capital element to the successful delivery of the outcomes – economic and employment growth.

7.2 Without an appropriately skilled and scaled workforce, the Preston, South Ribble and Lancashire City Deal will not deliver to its full potential, either through delivery of the infrastructure programme itself or the wider and lasting portfolio of opportunities through site development of both new business space and residential development. This strategy and action plan has been prepared to support partners to take the steps needed to ensure that it does, involving partners throughout the process.

7.3 The scale of the labour force needed to deliver the ambition is considerable and requires a multi-faceted skills set. While there are strengths to build upon, the scale of the challenge should not be under-estimated with prompt and diverse activities required to support Preston, South Ribble and Lancashire to deliver and benefit from activity.

7.4 Considerable resources are available to help support employment and skills plans in the City Deal area. These include the European Social Fund, Skills Funding Agency capital and revenue investment, and the support of agencies such as the National Apprenticeship Service.

7.5 The City Deal area also benefits from the presence of Universities and Further Education Colleges, as well as private sector training providers. These organisations are important local partners as well as the providers of training services. In addition, secondary schools have an important role to play in the provision of information, advice and guidance to young people about the new employment opportunities which will be available over the next ten years.

7.6 The City Deal area is a core part of the Lancashire economy and will draw its workforce from a wide geographical area. It will be important that skills and employment plans recognise the importance of the wider Lancashire workforce in developing initiatives rather than simply people living within the City Deal boundary, if the scale of ambition is to be realised.

Strategic Challenges7.7 Achieving this aim will require careful planning and management, recognising the scale of the ambition, the multiple partners with a role to play in delivery and the wider context in which City Deal activity is being taken forward.

7.8 The major challenges with regard to the City Deal aspirations are:

Providing a workforce for the construction industry which will deliver the infrastructure, commercial and residential development set out in the City Deal, addressing the challenge of delivering a marked increase in new housing development.

Maximising the training and employment opportunities available for both young people and older people from construction activity, using procurement processes to deliver a higher level of industry engagement and increase social value for public sector construction expenditure.

Providing a workforce for the new economy, particularly the priority sectors; including a large cohort of young and well qualified workers attractive to incoming employers.

Providing training and skills support which helps to secure new inward investment and company expansion in the City Deal area.

7.9 These challenges require a medium term approach, rather than short term initiatives, with consistent actions over the next five to seven years.

7.10 A key feature of the response to skills challenges will be the need to increase working with senior schools, sixth form colleges and Further Education colleges, recognising their role working with younger people.

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Overarching Objective7.11 This strategy has been prepared to support the achievement of one overarching objective:

Build and maintain a workforce of sufficient scale, skills and ambition to deliver the City Deal infrastructure programme to the agreed delivery programme and support the development and sustainability of priority sites (contributing to the growth of priority sectors), capturing benefits for Lancashire residents and businesses

7.12 Achieving this aim will require careful planning and management, recognising the scale of the ambition, the multiple partners with a role to play in delivery and the wider context in which City Deal activity is being taken forward.

7.13 The City Deal employment and skills plan sits within the context of Lancashire wide plans, particularly with regard to the priority sectors. As such, City Deal partners will need to work closely with training providers across a wider geography, accessing where necessary specialist training provision relevant to companies and new inward investors in Preston and South Ribble.

7.14 One of the most important aspects of City Deal skills and learning aspirations is a long term commitment to increase the quality of vocational opportunities open to young people in Preston and South Ribble. This will begin with guidance in schools and close working with employers, Sixth Form and Further Education Colleges and UCLAN, as the local university, to ensure young people have a broader choice as they enter employment and further and higher education.

7.15 Another underlying aspiration is to ensure that older workers and those returning to the labour market also have more choice in terms of training and employment opportunities as a result of the City Deal related investment. The intention is to increase employment and economic activity rates, and reduce the numbers of unemployed people and those seeking employment.

Strategic Objectives7.16 A series of supporting strategic objectives have been identified to support achievement of the headline ambition. This approach recognises that a series of actions will be required, spanning a range of subject areas, to support Lancashire partners to recognise, plan for and exploit the City Deal opportunity.

7.17 The Plan also recognises that City Deal is essentiality a major infrastructure programme designed to unlock a long term land supply for commercial and residential development. As such, City Deal partners have a particular interest in the construction sector and associated opportunities.

7.18 There are four strategic objectives:

Support the development of the construction industry and supply chain in the City Deal area as a priority sector for company and employment growth, working with local companies to strengthen skills and training provision.


Provide the well qualified workforce needed to support employment growth and meet replacement demand, with a special emphasis on the Lancashire priority sectors.


7.19 The success of City Deal is dependent on both the outcomes of infrastructure investment, i.e. land and premises developed, and companies providing new employment. While the construction related opportunities can be mapped with some certainty, the growth of the priority sectors will require a very effective inward investment marketing and promotion effort over a sustained period, as well as a competitive support offer to attract new companies to Lancashire.

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Support the development of the construction industry and supply chain in the City Deal area as a priority sector for company and employment growth.

7.20 The construction industry is already facing skills shortages and as new build activity increases, these issues will become more acute. There is a short to medium term problem regarding the availability of a skilled labour force to meet the needs of the construction industry in Lancashire and elsewhere in the North West.

7.21 A number of initiatives are already underway with regard to construction and there is a need to increase and intensify the industry given the employment forecast and the planned scale of construction activity. Fundamental to any efforts to strengthen the construction labour force is a strong commitment of employers to invest in workforce development.

7.22 There are five objectives with regard to the construction industry, some of which require a medium term commitment. These are:

a) Strengthen the information, advice and guidance system in senior schools and sixth form and FE colleges to provide a pool of well qualified young people interested in pursuing careers in the construction industries.

b) Increase the number of apprenticeships across the broad range of occupations needed to support the construction industry, embedding a cultural change in company investment in training for the future workforce.

c) Work with local construction and supply chain companies to increase the internships, placements and graduate recruitment linked to supporting company growth.

d) Prioritise construction companies for bespoke business support through the Lancashire business development support system including management development, planning and investing for growth and improving productivity.

e) Foresight: Explore construction related manufacturing and supply chain product development to increase the economic benefits from construction.

7.23 The most important step for Lancashire is recognising the construction industry as a priority sector in its own right, with the potential to provide both jobs and new manufacturing and supply chain opportunities which will contribute to economic growth.


7.24 The construction industry is a very important source of local jobs, with employment growth and replacement demand providing a consistent source of employment opportunities. Large construction companies are familiar with public sector requirements to provide training and work placement opportunities as part of contractual requirements for some public works contracts.

7.25 Recent developments have added the concept of social value to the ambition of public sector agencies to increase the benefits from public sector investment. The introduction of social value does however need to take account of the costs of any requirements and the ability of companies to contribute to social value goals.

7.26 There are four objectives with regard to the construction industry, some of which require a medium term commitment. These are:

a) Ensure a specific commitment to working with local schools and colleges with regard to IAG and require site trips and visits as part of public sector funded construction contracts.

b) Prioritise groups which have difficulty accessing apprenticeships, including women and ethnic minority groups, in public sector funded construction contracts.

c) Secure a commitment to recruiting older workers, where necessary using public sector skills support to make candidates work ready and attractive to contractors and sub-contractors.

d) Develop a social value ask/requirement which takes account of the other requirements being placed on contractors.

7.27 Given the scale of public sector investment in construction activities, and the potential for further investment over the next ten years, there is an

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opportunity to assist some groups in the labour market who have the potential to take up training and employment but where there are barriers which need to be addressed.

7.28 This objective needs to be balanced by the costs involved, and setting ambitious but realistic targets for company engagement and commitment will be a key part of the development and negotiation process with the construction industry.

Provide the well qualified workforce needed to support employment growth and meet replacement demand, with a special emphasis on the Lancashire priority sectors.

7.29 The priority sectors are a very important source of local jobs in the Lancashire economy. The sectors forecast both employment growth and replacement demand and will provide a consistent source of employment opportunities.

7.30 There are five objectives with regard to the Priority sectors, some of which require a medium term commitment. These are:

a) Increase the STEM performance in senior schools, where necessary working with younger pupils.

b) Strengthen the information, advice and guidance system in senior schools and sixth form and FE colleges to provide a pool of well qualified young people interested in pursuing careers in the Priority sectors.

c) Increase the number of apprenticeships across the broad range of occupations needed to support the Priority sectors, embedding a cultural change in company investment in training for the future workforce.

d) Work with local companies, UCLAN and Lancaster University to increase the internships, placements and graduate recruitment linked to supporting company growth in the Priority sectors.

e) Establish the Lancashire Enterprise Zone as a leading centre for manufacturing, energy and environment and construction related vocational training, linked to new assets and the leading role of BAE Systems and its supply chain.

7.31 The provision of a well qualified workforce is critical to Lancashire meeting its economic aspirations for its economy and communities. There is

considerable scope in all of the Priority sectors, all of which provide opportunities for progression in terms of supervisory and management positions. It is important that young people in particular are aware of these opportunities to progress with experience.

7.32 There remains a continuing challenge of promoting vocational opportunities on a par with academic opportunities and the Priority sectors provide good openings for both graduate and non graduate young people.


7.33 The City Deal will provide Preston and South Ribble with a long term land supply with the capacity to attract significant new investment in a range of sectors. There is a need to assist companies with recruitment, addressing skills shortages and developing training plans, including pre-recruitment training where appropriate. These activities need to build upon existing arrangements for inward investors and include consideration of company growth plans for existing businesses.

7.34 There are three objectives with regard to assisting company growth plans in the priority areas. These are:

a) Develop and promote a clear recruitment, skills and training offer for companies locating or expanding in the priority locations and sectors in the City Deal area.

b) Develop a clear pre-recruitment training offer to increase the prospects of local people securing employment and new employers recruiting a suitable workforce.

c) Assist new companies and those expanding their workforce to develop workforce training plans which incorporate apprenticeships, internships, graduate recruitment and other workforce up-skilling arrangements, including links to employer networks and training providers.

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Requirements to Support Delivery7.35 Delivering the strategy will require a long term commitment by local partners and a considerable number of front line staff. Successful delivery will require:

Collaborative working to ensure that employment and skills activity is coordinated across providers to make the best use of available resources at a time of high demand.

Engagement with employers from a range of sectors and of varied sizes, and a system to keep up to date with employers requirements.

Sufficient flexibility for education and training provision to respond to local and changing needs as the economy develops.

A culture of regularly reviewing progress to reflect on achievements and identify priority topics for future intervention.

7.36 The actions outlined in the following section will ensure that these foundations are set as early as possible.

Measuring Success7.37 The success of delivery of employment and skills plans will be measured against a series of metrics, including:

The number of City Deal area/Lancashire residents completing construction qualifications.

The number of City Deal area/Lancashire residents securing work in the construction sector and in businesses accommodated on City Deal supported sites.

The number of City Deal area/Lancashire residents completing qualifications and taking up employment in priority sectors.

The number of apprenticeships supported each year in the construction and priority sectors.

7.38 Delivering the strategy will require a successful inward investment effort to take up the new business space which the infrastructure projects will facilitate over the next ten years.

Management and Governance

7.39 The City Deal employment and skills opportunities contribute to and are part of Lancashire’s economic ambitions, as set out in the Strategic Economic Plan. It will be important that City Deal partners participate in and are part of Lancashire skills plans.

7.40 There is a need, however, for local actions to be taken forward by City Deal partners and also for local partners to ensure that Preston and South Ribble residents and businesses take up opportunities from Lancashire wide initiatives.

7.41 The City Deal will require the leading local partners, including education and training providers and representatives of employer groups, to meet and review progress on a regular basis.

7.42 As a minimum, the City Deal will require an oversight or steering group reviewing progress and management information. Consideration needs to be given as to what additional arrangements are needed with regard to the construction industry. As suggested earlier, this sector needs to be regarded as a priority sector by City Deal partners.

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8 Priority ActionsKey Early Actions 8.1 A series of key early actions have been identified to support delivery of the strategy and progress all four supporting objectives. Identifying both priority actions and partners with responsibility for delivery at this early stage ensures that momentum established through the strategy’s development continues to be built upon and there is local ownership of activity. It is recommended that partners continue to identify required actions over time to ensure that implementation of the strategy remains responsive to experience on the ground as well as wider change in policy and economic drivers. All actions should be developed and implemented in coordination with wider activity being progressed across Lancashire through the leadership of the Lancashire Skills Hub to ensure that the potential for duplication of activity is reduced and most effective use can be made of available resources.

Strategic Objective 1: Support the development of the construction industry and supply chain in the City Deal area as a priority sector for company and employment growthEarly Action Lead Partner Supporting Partners Secure agreement from partners across Lancashire to formally identify construction as a priority sector for growth in Preston and South Ribble to support wider actions to flow from this (e.g. including construction as a priority sector for programmes such as Lancashire Skills Support for the Workforce and successor initiatives)

Lancashire LEP (through the City Deal team)

LEP Board members, Lancashire businesses, skills/training providers, public sector partners

Increase the tailoring of Growth Hub marketing materials and support advisors to actively target and support construction businesses to help them to plan for and achieve growth in City Deal related activities

Boost Business Lancashire (Lancashire’s Growth Hub)

In consultation with sector representatives (e.g. CITB) and other business support providers

Develop and deliver an information and marketing campaign to raise the profile of City Deal in the component local authorities, Lancashire and North West wide to alert both businesses and individuals to the scale of opportunities to be made available, including commercial and residential development, the needs of the programme and target timescales for delivery

Lancashire County Council

Preston City Council, South Ribble Borough Council, HCA, sector representative groups (to help determine how the opportunity can be most effectively pitched to secure engagement)

Map out career opportunities, progression routes and core elements of existing provision to support skills development in the construction sector to inform information, advice and guidance (IAG) offered to young people to allow them to make informed choices

Lancashire Skills Hub Sector representatives (from sector bodies and large employers), skills/training providers

Develop a bank of case studies showing the routes that Lancashire residents have taken to access and succeed in construction occupations to inspire others to explore opportunities in the sector. The content should be hosted on an enhanced City Deal website that is promoted through all strands of activity and shared with relevant partner organisations

Lancashire Skills Hub Construction businesses, skills/ training providers, construction sector representatives (e.g. CITB). The resulting case studies should be shared with local schools, colleges, training providers, JobCentre Plus, Lancashire Work Clubs

Develop a construction IAG programme, working with the construction industry and engage existing Lancashire Skills Hub Schools, colleges and training

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groups (e.g. head teacher, principal and vice chancellor networks) to publicise the scale and nature of construction opportunities anticipated in the City Deal area and cascade the message down to young people

providers, JobCentre Plus, Preston City Council, South Ribble Borough Council

Run a construction specific Apprenticeship campaign in Lancashire to alert local businesses to the scale of workforce requirements identified for City Deal, support available through the apprentice programme, how they can identify an apprentice, the nature of training available and the costs and benefits associated with doing so

Lancashire Apprenticeship Hub (steered by Lancashire County Council)

Employers, sector representatives (e.g. CITB, Construction Hub), skills and training providers, JobCentre Plus

Prepare a brief and commission research to explore opportunities for Lancashire to capture a wider share of construction related activity, for example consideration of opportunities for local businesses to play an active role in the manufacture of building materials, how supply chains can support new product development. The research should identify both existing strengths to build on and opportunities for new specialisms to be established in the medium term.

Lancashire County Council (on behalf of the City Deal partnership)

Brief to be developed with industry representatives and work to be overseen by an appropriately skilled steering group

Strategic Objective 2: Work with the construction industry, using procurement processes where appropriate, to increase training and employment opportunities for young people and older workers and increase social valueEarly Action Lead Partner Supporting Partners

Prepare a Social Value policy to be included in all procurement packs that clearly states overall ambitions for City Deal investments and the form of benefits that will be preferred (e.g. offer of apprenticeships, employment opportunities for Lancashire residents, priority groups, allowance for school visits)

Lancashire County Council procurement team

To be developed in consultation with City Deal staff, a sample of employers and sector representatives to ensure ambition yet realism

Require a Skills and Employment Plan to be prepared for all City Deal commissioned construction contracts that clearly outlines the contractor’s commitment to delivering social value, including through training and employment activity, and sets out how achievements will be evidenced

Lancashire County Council procurement team

To be progressed in consultation with City Deal staff and a sample of employers and sector representatives

Develop a monitoring framework that allows social value gained through individual contracts to be consistently gathered and aggregated to show the return secured on City Deal investments over time

City Deal team Preston City Council, South Ribble Borough Council

Work with existing groups (e.g. the new Construction Club for Central Lancashire and the East Lancashire Chamber of Commerce Construction Alliance) to encourage construction businesses to work with local schools and colleges to promote careers in construction and support work experience placements

Lancashire Skills Hub Schools, colleges, construction businesses

Develop employer engagement channels (for construction as part of a wider initiative for Lancashire) to ensure up to date intelligence is secured from businesses to inform future education and training provision and IAG activity (potentially through new Curriculum Advisory Panels)

Lancashire Skills Hub Lancashire business base, schools, colleges, training providers

Continue to work with skills and employability support providers (such as Lancashire Skills Support for the Workforce and Work Programme prime contractors) to ensure a good understanding of the sector’s skills needs is established to ensure the potential workforce (including older workers and those exploring new career opportunities) is job ready

Lancashire Skills Hub Priorities to be identified through consultation with businesses. Support service providers to lead on delivery

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Once live, promote the proposed ‘Lancashire Skills Pledge’ amongst construction businesses, working to an agreed take-up target and promoting links to wider actions (e.g. use of apprenticeships)

Lancashire Skills Hub Local employers

Work with apprenticeship providers to agree target engagement levels for the construction sector to ensure sufficient provision is available to support sector needs and active steps are taken to engage both learners and employers to achieve the targets year on year

Lancashire Skills Hub Apprenticeship providers, schools, employers

Strategic Objective 3: Provide the well qualified workforce needed to support employment growth and meet replacement demand, with a special emphasis on the Lancashire priority sectorsEarly Action Lead Partner Supporting Partners

Engage with existing sector initiatives such as STEMFirst to build on good work and ensure that all initiatives are alert to the scale and nature of opportunities anticipated to be generated through City Deal investment and the achievement of wider growth aspirations in Lancashire to allow them to be effectively promoted

Lancashire Skills Hub STEM initiative leads, schools, colleges

Support and promote requirements for tailored skills provision identified through the Sector Skills Action Plans

Lancashire Skills Hub In liaison with diverse partners

Regularly monitor achievements against priorities identified in the Sector Skills Action Plans to assess change and identify and help overcome any identified challenges to delivery

Lancashire Skills Hub Action owners identified in the Sector Skills Action Plans

Coordinate an enhanced skills re-training and guidance offer for those looking to access opportunities in priority sectors, including those affected by redundancies and the contraction of traditional industry

Lancashire Skills Hub Skills and training providers, JobCentre Plus, Lancashire Work Clubs

Develop and launch a marketing programme that effectively communicates the range of employment opportunities anticipated to be created on City Deal supported sites to give individuals and providers time to develop the skills needed to respond to requirements

Lancashire County Council

Preston City Council, South Ribble Borough Council, schools, colleges, training providers, JobCentre Plus, Lancashire Work Clubs

Increase sector specific marketing of apprenticeship opportunities for priority sectors and work with apprenticeship providers to agree target numbers by sector for year on year achievement

Lancashire Skills Hub with the Lancashire Apprenticeship Hub

Employers, sector representatives organisations, education and training providers, JobCentre Plus

Work with schools, colleges and employability support services to raise awareness of the scale and nature of employment opportunities (as well as onward progression opportunities) forecast to be created by City Deal investment and wider growth to support the provision of up to date, locally relevant IAG

Lancashire Skills Hub Schools, colleges, JobCentre Plus, Work Programme prime contractors

Continue to encourage FE and HE providers to work together to plan provision and progression routes to support people to secure the higher level skills required by the priority sectors, as well as exploring opportunities for students to secure practical work experience with local employers to help develop the skills of the future workforce

Lancashire Skills Hub FE and HE providers, employers

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Develop an intern and graduate recruitment initiatives targeting the priority sector and working with UCLAN and FE Colleges

Employers, sector representatives organisations, UCLAN

Strategic Objective 4: Develop a skills, training and recruitment support package for employers taking up business space on City Deal linked priority sites and premises, including Preston City Centre, the Enterprise Zone and Cuerden as the major centres for new inward investment Early Action Lead Partner Supporting Partners

Establish and publicise an agreed point of contact for skills and employment matters associated with incoming and growing businesses in the City Deal area to ensure consistency of messages and coordination of resulting skills planning activities

Lancashire Skills Hub Contact point to be communicated to a wide range of partners

Produce a development prospectus that sets out the ambition for City Deal sites, including consideration of the scale and quality of space to be created and the sectors/types of business to be attracted to help generate interest amongst incoming and expanding businesses

City Deal team Lancashire County Council marketing team and to be distributed through partners

Create initial information packs (tailored by site and sector) to be hosted on the City Deal website and issued to interested parties with details of the recruitment and skills offer as well as strengths in the education and training provision and existing workforce available to incoming and expanding businesses, with clear points of contact for further information identified

Lancashire Skills Hub Lancashire County Council, Preston City Council, South Ribble Borough Council

Increase efforts to ensure that all known incoming and expanding businesses specify and discuss their workforce requirements as early as possible to allow education and training providers to respond and potential applicants to be matched to opportunities

Lancashire Skills Hub Lancashire Growth Hub, Lancashire County Council, schools, colleges, universities, training providers

Deliver tailored pre-employment training support that responds to the specific requirements of incoming businesses and helps local people to benefit from the employment opportunities being created

Lancashire Skills Hub to initiate

Lancashire Work Clubs, JobCentre Plus, Work Programme prime contractors

Enhance support available to new and expanding businesses to develop workforce training plans that can be supported by current education and training provision and help to inform employer responsive future provision

Lancashire Skills Hub to initiate

Employers, schools, FE, HE and training providers

Encourage occupiers of City Deal supported sites to sign the Lancashire Skills Pledge to demonstrate their commitment to continual investment in their workforce

Lancashire Skills Hub Local employers

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Documents

Web viewThe following table sets out a policy on forecast against the 2015 base employment levels and the policy off forecasts. Successful delivery of City Deal employment