Skills shortage warning for Borders

EXCLUSIVE by EWAN LAMB

The impact of Brexit coupled with an unwelcome fall in the working population of the Scottish Borders may mean the task of replacing 17,400 workers over the next ten years will be made more difficult, leading to possible skill shortages.

This is one of the key findings in a comprehensive report on future employment trends in the region from Skills Development Scotland (SDS) which warns the uncertainties surrounding Brexit have some particular implications for the Borders.

They include access to the Single Market for trading purposes which is of importance, given Borders exports in knitwear and high end cashmere; support for the agriculture and food production given its l emphasis here and, also, freedom of movement of EU nationals.

Meanwhile, in the period up to 2027, the report warns: "The Borders is expected to have a 15 per cent reduction in the size of the working age population (16-64), whilst nationally the working age population is anticipated to decline by 5 per cent.

"Growth will be greatest amongst those aged 75+, within the Borders this age group will grow faster than the equivalent rate across Scotland. This projected decrease in the working age population and increase in the older population may prove challenging for the Borders."

The document explains that in relation to the Scottish economy, the Borders is a low output and low productivity region. Based on 2015 statistics, it contributed £1,921 million in GVA (Gross Value Added generated in the production of goods and services) ; around two per cent of Scotland’s output and has the lowest output of all regions. 

A section in the report looks at numbers of business "births" and "deaths" in recent times.

It says: "The number of business births within a region can indicate dynamism in that region’s economy. By business births per 10,000 of the population, the Borders ranks 11th out of 14 regions within Scotland, whilst at the local authority level, the Borders ranks 22nd out of 32. Overall the picture before and after the recession for business births has been one of decline: currently at 32 businesses created per 10,000 population (2015); compared to 45 in 2005.

"Conversely, business deaths have increased over this period, from 25 per 10,000  in 2005 to 30 in 2015. Finally, if we look at the business survival rate, using 2010 as the baseline year, the business survival rate has decreased sharply on an annual basis from 89 in 2011 to 40 in 2015."

SDS estimate that over the next ten years jobs generated as a result of people who retire, change jobs or move away will require 17,400 people in total. However, this is driven by replacement demand, with expansion demand overall a negative figure.

The highest current employing industrial sectors in the Borders are human health and social work activities, with around 8,100 jobs, and wholesale and retail trade, with around 7,800 jobs. 

The same sectors are forecast to still be the highest employing sectors in 2027, although they will have switched places, with wholesale and retail becoming the largest with around 8,100 and human health and social work having 7,900. 

Next largest sectors for total employment in 2027 is forecast to be Manufacturing (4,800 jobs), although this will see the largest change of any sector, declining by 800 jobs. Agriculture, forestry and fishing will also decline slightly, but remain the fourth largest sector with 4,400 jobs, followed by Construction (4,000 jobs).

As the sector composition has been changing, so has the occupational profile of the region, where there has been a significant reduction in the proportion in skilled trades and operative roles, as the manufacturing and agriculture sectors have declined. These changes are largely expected to stabilise over the forecast period, although there are expected to be still fewer skilled trade and operative roles.

However, on a more optimistic note, the report says the introduction of the South of Scotland Enterprise Agency means providing dedicated support to the south of Scotland in the same way as exists for the Highlands and Islands, but tailored to the economic needs and local labour markets in the south of Scotland should help. 

"This focus should improve the level of investment in economic growth, enterprise, skills and innovation in the region as well as working in new ways with other partner agencies.

"There are proposals for a new Borderlands Growth Deal working with councils on both sides of the border to promote economic growth and competitiveness in the area including infrastructure projects and transport and connectivity, including improving the region’s digital connectivity and broadband speeds. The deal, working alongside the new South of Scotland enterprise agency, should boost productivity, innovation and growth."

In a reference to Fair Work, the document warns: "Given the lower levels of earnings in the Borders (below the national average), there is a need to ensure that inequality within the region does not mean those at the lower end of the labour market get ‘stuck’ in lower paid ‘non- standard’ jobs: part-time, temporary and self-employment. And also that there are adequate progression routes out of low skilled work for those who choose to move and decent pay and conditions for those who do not or cannot".