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West Midlands Local Skills Report Annex B - Evidence Base 2022

Local Skills Report Evidence Base – Supply and Demand Comparison

Key Findings:
  • There is an undersupply of NVQ2 and NVQ4 and an oversupply of NVQ3 and NVQ1, within the West Midlands, creating an imbalance of demand and supply by skill level in the workforce.

  • There is a national undersupply of people proficient in digital skills at all levels, with significant growth in the higher end skills and a lack of supply chain through all stages to fulfil these roles.

  • The public sector, teaching, care and health remain resilient sectors in terms of job availability and advertisements and demand may outstrip supply with the impact of the pandemic and the ageing population demands.

  • The region’s heaving manufacturing
    base relies on a supply of high skilled apprenticeships but short term economic impacts and longer term impacts of exiting the EU are having an impact on business ability to fund and support trainees.

  • The supply and demand mismatches ultimately increase the workload of those around them, which can create a fall in productivity.

  • In Further Education, shortfalls still exist
    in marketing, public services, business management, and administration. GCSE resubmissions and employability skills still dominate submission. While these may not align to job roles in specific sectors, they do support general preparation of young people for the workplace.

  • Higher Education provision in the region is strong and produces a great number of graduates in business, management, and medicine. However, like most regions, the West Midlands suffers a net loss of graduates despite attracting many young people to study here.

  • Wage trends data from PAYE records indicate that wages in IT have grown significantly, arts and entertainment have seen strong wage growth (but correspondingly higher risk), while manufacturing and public sector-dominated professions have seen slow rises and are threatened by inflation. These trends reflect continuing difficulty meeting demand in IT-intensive roles, as well as being able to attract public sector staff in education and health.

  • Employers in the region feel that the lack
    of necessary skills is constraining their competitiveness, increasing their costs, and slowing technological innovation in products and processes.

  • The West Midlands’ lower overall skills base is reflected in a lower proportion of staff being over-qualified for their current role.

By Qualification Level

There is an over-supply at NVQ3-level, but an under-supply at NVQ4, in both the Black Country and GBSLEP, indicating potential value in up-skilling these candidates to NVQ4. In Coventry and Warwickshire there is an under- supply at both NVQ3 and NVQ4, likely resulting from the presence of the auto industry which often require skills at these levels.

This raises the concern on the supply-side that elevating a candidate’s skills from NVQ2 to NVQ3 will not automatically improve their employment prospects, unless this training is a stepping-stone to further development.

It also suggests the potential value of degree apprenticeships in providing the higher-level technical skills currently in demand.


The region is distinctly short of candidates at this level, with a gap of 63,400 in the GBS LEP, 16,970 in Black Country LEP, and 11,270 in the Coventry and Warwickshire LEP.

Recalling the Working Futures projections, the wider West Midlands region is expected to see stronger growth in NVQ levels 3 and 4 through 2027 (at 0.5% annually) than the UK average (0.1%). However, this is partly a function of the fact that other regions of the UK are achieving strong growth in graduate and postgraduate education at the expense of these lower skill levels.

Research published in the journal Regional Studies this year by City-REDI at Birmingham Business School (titled Ensuring skills are available in the right locations: are we there yet? A regional analysis of qualification gaps) compared supply and demand of qualifications across the West Midlands 3-LEP area. This involved using a regression model to forecast occupations for the different local authority areas, before tying each occupation to the relevant NVQ level. This allows us to draw some conclusions about general skills availability in the region:


Transport and labour market mobility were highlighted as challenges at this qualification level, with considerable oversupply in some areas (9100 candidates in the Black Country) and undersupply in others (11,000 in the Coventry and Warwickshire LEP). Overall, the West Midlands 3-LEP area is already over- supplied at the NVQ1 skills level.


This qualification level is in short supply in all three LEP area, the greatest shortage being in the GBSLEP (63,100, concentrated in Birmingham at 44,200), followed by Coventry and Warwickshire (41,200) and the Black Country (34,300). This is likely causing a significant constraint on productivity as firms struggle to find the needed skills within their commuting area.

This leads us to the conclusion that supply-side policy should focus on:

  • Upskilling across the high end of the spectrum (NVQ4 all the way to NVQ7/8 (advanced vocational and postgraduate study) to meet the higher skill requirements of modern professional services, green technology, and biosciences.
  • On the opposite end of the spectrum, accelerate the reduction of ‘no qualifications’ and elevation of young people to at least NVQ2 level. The aforementioned forecast of ‘no qualifications’ falling by an anaemic 2.9% annually, the lowest in the country, would undermine the region’s competitiveness and should not be allowed to happen.

The rate of pay offered within a particular industry is an important indicator of the market’s response to scarcity of labour, and by extension of skills. Wages data collected from PAUE records shows how the imposition of lockdown, and the slowing activity in the days preceding it, strongly affected pay rates (expressed as monthly pay) in some industries but not others. Recent Trends, which are less dynamic, are also shown through September 2021. Several key trends are notable:

  • There has been a significant rise in pay within arts, entertainment, and recreation, possibly reflecting the greater level of risk currently associated with this sector.

  • Wages in accommodation and food services, badly dented before and during the

  • Spring 2020 lockdown, have since recovered and resumed their pre-pandemic trend of slow growth.

  • Professional, scientific, and technical roles were modestly impacted by the initial lockdown, but have since recovered strongly and are much higher than in the year preceding the pandemic.

  • Wages in construction, badly hit in the initial lockdown, have since recovered and grown somewhat more strongly than prior to the pandemic.

  • Public sector-dominant jobs in education and health have seen a consistent but muted rise in wages, unaffected by the pandemic.

  • Wages in IT have grown rapidly through the past three years, and faster post-pandemic than before.

  • All these trends should be considered in light of the higher level of inflation post-pandemic, which at the time of writing (November 2021) stood at 5.1%.


Marketing and sales -6,266

Public services - 3,078

Nursing and subjects and vocations allied to medicine - 3,054

Business management - 3,026

Teaching and lecturing - 2,250

Administration - 2,179

Hospitality and catering - 2,177

retailing and wholesaling - 2,108

manufacturing technologies - 1,801

Accounting and financing - 1,646

Medicine and density - 1,553

Warehouse and distribution - 984

Publishing and information services -562

Urban, rural and regional planning - 334

Services enterprises - 297

Agriculture - 280

Architecture - 104

Horticulture and forestry - 81

Linguistics - 64

Environmental conservation - 47

Anthropology - 14

Archeology and sciences - 14

Agriculture, horticulture and animal care - 0

Arts media and publishing - 0

Business, administration and law - 0

Construction, planning and the built environment - 0

Education and training - 0

Engineering and Manufacturing technologies - 0

Health, public services and care - 0

History, philosophy and theology - 0

Information and communication technology - 0

Language, literature and culture - 0

Leisure, travel and tourism - 0

Preparation for life and work - 0

Retail and commercial enterprise - 0

Science and mathematics - 0

Social sciences - 0

Philosophy - -43

Economics - -189

Politics - -211

Transportation operations and maintenance - -247

Travel and tourism - -309

Theology and religious studies - -386

Law and legal services - -489

Animal care and veterinary science - -584

Geography - -613

History - -667

Media and communication - -835

Performing arts - -1,072

ICT Practitioners - -1,277

Other languages, literature and culture - -1,560

Engineering - -1,639

Direct learning support - -1,819

Sociology and social policy - -1,866

Child development and wellbeing - -2,191

Crafts, creative arts and design - -2,469

Sport, leisure and recreation - -2,514

Health and social care - -2,528

Building and construction - -2,597

Science - -2,991

ICT for users - -4,373

Languages, literature and culture for the British isles - -11,899

mathematics and statistics - -13,547

Preparation for work - -21,717

Foundations for learning and life - -40,470

2020/21 Emsi data highlights the difference, in each FE subject area, between the number of FE courses completed in that subject area, and the number of job openings in that same area.

Note the large negative discrepancies at the bottom of the chart, which reference generic employability skills and GCSE resubmissions, and key subjects at the top of the chart, including, marketing and sales, public services, nursing, teaching, and business management and administration.


By Subject
Job postings

A comparison is made below between
the volume of job postings in the West Midlands, aggregated by Emsi, and the number of apprentices and further education students trained in related subjects. Given the differences between data sources, the geographical area and time period covered are cited in the headings for context.

Top Posted Occupations, West Midlands 3LEP area, December 2020-November 2021

By occupation, the most postings in this
period were in Nursing (22,427) primary and nursery teaching and supporting staff (14,371), sales accounts and business development management (18,791), care work (10,025), book-keepers and payroll (9,611), programming and software development (12,987), and van drivers (10,902).

Apprenticeship Starts, West Midlands metropolitan area, August 2020-Jan 2021 15,100 people enrolled in apprenticeships

in Q2-3 2019/20. Given the clear need, it is positive that health and social care is the single largest category for apprenticeship provision, with 2,150 people starting apprenticeships in this area in the last six months. 2,090 were trained in business management in the same period; while this goes some way towards meeting demand it also raises the question of whether these highly skilled apprenticeships are reaching those from deprived areas. The previously cited Social Mobility Commission work suggests that currently they are not. Given the high demand for payroll staff, it

is encouraging that many apprenticeships
are being trained in administration (1,640)
and accounting and finance (1,070). These positions are a potentially valuable ladder into higher-paying roles for young people in vocational education. However, the contrast in levels is marked, with the most administration apprenticeships at intermediate level (790) while accounting and finance were concentrated in the higher level (680). This may be because the latter category is dominated by employers funding apprenticeships for their existing staff.

Further Education Starts, West Midlands metropolitan area, August 2020-Jan 2021 There were a total of 203,708 starts of FE courses in Q2-3 2020/21.

FE course enrolments in health and social care (17,206) greatly outstrip apprenticeship starts in this field, this however being largely pitched at NVQ levels 1-3 and workplace qualifications as opposed to a level aligned with the demand for nurses, for instance.

Within business skills, business management (5,626) predominates, followed by administration (2,939) and law and legal services (1,785). 80.6% of these courses are at NVQ level 3, indicating an effective supply across this range of skills.

Higher education, West Midlands 3LEP area, 2019/20 academic year

Looking at the most recent academic year (2019/20), the most common subject areas studied were business and administrative studies (15,625) followed by subjects allied to medicine (8,460), as summarised in Figure 3:

Business and management - 15,625 

subjects allied to medicine - 8,460

social sciences - 7,945

Education and teaching - 6,275

Engineering and technology - 5,625

Creative arts and design - 4,055

Computing - 2,195

Law - 2,700

Psychology - 2,635

Biological and sport sciences - 2,585

Languages and area studies - 2,085

Historical, philosophical and religious studies - 2,035

Physical sciences - 1,485

Medicine and dentistry - 1,310

Mathematical sciences - 1,305

Architecture, building and planning - 1,100

Agriculture, food and related studies - 1,040

Communications and media - 870

Geographical and environmental studies - 630

General studies - 200

Social and environmental studies - 90

Humanities and liberal arts - 70

Veterinary sciences - 20

General sciences - 10

Figure 17: Total graduates in the 2019/20 academic year in the West Midlands Region, by subject.

Business, management, and social sciences continue to predominate, and while a large number of doctors and nurses graduate within the region, these numbers are still outstripped by demand (22,427 in nursing), mirroring the shortfall in the Further Education system.

Impact on Employers

As seen earlier, Employer Skills Survey 2019 indicated that employers in the region feel that the lack of necessary skills is constraining their competitiveness, increasing their costs, and slowing technological change and innovation in products and processes:

Lose business or orders  to competitors  46 34 58
Delay developing new products or services 44 55 36
Have difficulty meeting quality standards 30 34 30
Experience increased operational costs 60 22 56
Have difficulty introducing new working practices  34 34 34
Increased workload for other staff 92 95 78
Outsource work 35 16 27
Withdraw from offering certain products or services altogether 25 31 27
Have difficulties meeting customer service objectives 64 59 47
have difficulty introducing technology change 36 29 34
None 2 3 3

Table 25: Impacts identified by employers from the skills gap, by LEP, 2019.

The skills gaps identified locally are primarily the result of employees still being new to the role and training not yet complete. An issue which affect the Black Country more than the other 2 LEPS include non-work related problems e.g. health or personal problems.

(11%). An issue which affects CWLEP more than the other 2 LEPs is staff being new to the role (70%), an issue which affects GBSLEP more than the other 2 is that staff have not received the appropriate training (33%).



CW LEP - 0

BC LEP - 0


CW LEP - 0

BC LEP - 0


CW LEP - 1

BC LEP - 11


CW LEP - 0

BC LEP - 1


CW LEP - 2

BC LEP - 2

GBS LEP - 34

CW LEP - 32

BC LEP - 36

GBS LEP - 17

CW LEP - 19

BC LEP - 11

GBS LEP - 33

CW LEP - 31

BC LEP - 37

GBS LEP - 40

CW LEP - 30

BC LEP - 38

GBS LEP - 68

CW LEP - 71

BC LEP - 62

GBS LEP - 33

CW LEP - 30

BC LEP - 26

GBS LEP - 66

CW LEP - 70

BC LEP - 63

GBS LEP - 28

CW LEP - 20

BC LEP - 23

GBS LEP - 31

CW LEP - 29

BC LEP - 30

GBS LEP - 21

CW LEP - 13

BC LEP - 24

Figure 18: Specific skills issues identified for staff members by firms, by LEP area. 

Compared to the UK average, the West Midlands has less of a problem with staff being overqualified for their current role, possibly a reflection of its lower overall skills base:


% of staff overqualified

Black Country - 54

Coventry and Warwickshire - 51

Greater Birmingham and Solihull - 49

Black Country - 5

Coventry and Warwickshire - 6

Greater Birmingham and Solihull - 6

Black Country - 11

Coventry and Warwickshire - 8

Greater Birmingham and Solihull - 12

Black Country - 35

Coventry and Warwickshire - 41

Greater Birmingham and Solihull - 39

Figure 19: Over-qualified staff as a proportion of total staff by LEP area, Employer and Skills Survey. All three LEP areas had less over-qualified staff than the UK average (9%).

More establishments in the Black Country (50%) and CWLEP (51%) had no staff that were over-qualified for their role compared to the England average (50%), whilst 49% of GBSLEP establishments has no staff over-qualified.

5% of establishments in BC LEP and CW LEP, and 6% in GBSLEP had 100% of staff classed as over-qualified, compared to 9% across England.