7. Prosperity for people
Overview
Challenges in relation to workforce skills, economic activity and employment are important contributors to the productivity and pay gap described in Chapter 3. Looking to 2050, there is a need to build better opportunities for young people to stay and develop careers in East Sussex, attract a skilled workforce to the county (including ‘returners’ to East Sussex) and enable people to develop new skills and career paths over their lifetimes.
This means recognising the interplay between the housing market and the labour market and the need for an affordable mix of housing to support people living and working in East Sussex. It also means understanding future industry demand, supporting progression in work and optimising the effectiveness of the workforce in the context of demographic change.
Context, challenges and opportunities
The population of East Sussex currently numbers around 550,000 people of whom 313,000 are of working age, as conventionally defined (i.e. between the ages of 16 and 64).
Within East Sussex, the economic activity rate (i.e. the proportion of 16-64 year olds either in work or actively seeking work) is around 76%; this is notably lower than the average across the South East. The employment rate is also about five percentage points below the regional average.
The data therefore suggest that people of working age account for a smaller share of the population than elsewhere – so the dependency ratio is higher. And within the working age population, both activity and employment rates are lower. In combination, this all means that the value of economic output (GVA) is also relatively low.
The reasons for low activity rates are many and varied. Some people are unable to work because of ill health (and the data suggest this is a significant factor in the county). Others may be unable to work because of caring responsibilities – which becomes more likely as the dependency ratio increases. A third group may struggle to access suitable employment, for a range of reasons: skills and qualifications, a lack of opportunities to progress in the workforce to achieve their potential, or physical barriers to access (for example transport accessibility, availability and cost). There will also be some people who may neither want nor need to engage in paid employment, especially among older age groups. Some may be deterred from doing so by the relatively low wage levels which characterise employment opportunities within East Sussex, although these low wage levels are compounded by severe cost pressures, especially in the housing market. The mix of factors is therefore complicated.
Alongside low earnings, official data sources suggest that qualification levels among working age residents are relatively low. Indeed, the proportion qualified to degree level or above is fully ten percentage points lower than the regional average – which is a sizeable gap. Although qualifications are far from the whole story, the correlation between low qualifications and low resident employee earnings is striking.
For the Economic Prosperity Strategy, a critical issue is the extent to which the economically active population – both now and in the future – has the skills and confidence to pivot and adapt as job roles change and as new sectors emerge. Over the next 26 years, the range of jobs within East Sussex will change substantially. Demands from employers are also likely to change. A resilient, diverse and inclusive workforce will therefore be essential.
Evidence box
- Future Skills
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A study on Future Skills East Sussex was commissioned by Skills East Sussex from the Institute for Employment Studies in 2023. Its findings are important for the Economic Prosperity Strategy.
It concluded that future recruitment and skills challenges will vary by sector. Some sectors (notably health and social care, the visitor economy and some elements of agriculture) will struggle to find sufficient recruits. There will be skills shortages in digital, engineering/ manufacturing and construction. IT skill needs will increase across all sectors – basic IT skills in health and social care and the visitor economy; more advanced/specialist skills in digital, engineering etc. – often driven by the introduction of new technologies.
The study also identified a cross-cutting requirement for skills linked to the transition to net zero carbon.
Priorities looking ahead
Against this backdrop, there are some clear priorities. Specifically, there is a need to:
1. Build opportunities for young people to stay and develop careers in East Sussex
It is very important that opportunities are created and that more young people are encouraged to pursue their careers locally. Unless this is achieved, the dependency ratio will continue to worsen, and East Sussex will become progressively less sustainable in socio-economic terms over the period to 2050.
However, the labour market profile presented above presents some clear challenges in this context: jobs are typically poorly paid, and qualifications are relatively low, certainly compared to neighbouring areas in the South East.
The Economic Prosperity Strategy needs to chart a different course for East Sussex and finally decouple this ‘low pay – low skills equilibrium’. Disruption in this context must link directly to the dynamism of the business base and the need to encourage more companies to grow, creating clearer career opportunities. It should also relate to processes of entrepreneurship and the need/ opportunity to involve young people in this at an early stage. Young people will not choose to stay in the county unless there is something to stay for – and the Economic Prosperity Strategy has an important contribution to make.
Evidence box
- Perspectives on the future from new entrants to the workforce
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To inform the development of the Strategy, a focus group with local college students explored young people’s aspirations, looking ahead to 2050.
Knowledge development and opportunities for on-the-job learning and career progression were seen as key factors in choosing future employers, with an emphasis placed on a good workplace culture. In a labour market that is likely to become tighter over time, these will become increasingly important factors.
Students cited housing costs as an important concern for the future, and potentially one which might limit their ability to seek work and progress locally. However, many also found the prospect of moving away for work to be attractive, at least initially, reflecting perceived opportunities (and a greater sense of dynamism) elsewhere. This reflects historic patterns of young people leaving for university and graduate employment – but many wish to stay local, and there ought to be scope to attract people to return to the county if the opportunities are available.
2. Attract a skilled workforce
At the same time, there is a need for more immediate responses, given the challenges that employers are facing in securing the skills they need. Potentially, people ‘returning’ to the county and new residents relocating to East Sussex could bring their skills and experience with them, providing an invaluable resource. This links again to the need to position East Sussex as a place for business and a place in which ambitions can be realised. For new (and existing) residents, the county’s quality of life is an important attractor, which will be supplemented by the housing offer, the quality of education provision, public services and the wider factors that make the county a good place to live.
3. Enable good, rewarding work throughout working lives
Looking ahead towards 2050, there is a need to recognise that the nature of work is changing profoundly. Those that are well qualified for today’s jobs might find that the range of opportunities available to them is very different in two decades’ time. Yet they might also find themselves having to work for longer and needing – and/or wanting – to engage in paid employment well into their 60s and 70s.
The imperative in this context is to equip people to work for longer, pivoting their skills and experience in the process – and without any loss of either confidence or self-esteem. Indeed, quite the reverse: the insights and perspectives provided by older workers need to be recognised and valued by employers and used effectively within thriving businesses.
Areas for intervention
The priorities identified above lead to four main areas for intervention over the decades ahead. The first of these is concerned with the housing market as a crucial factor influencing the ability of people to live and work in East Sussex. The following three focus on skills and the labour market, recognising the importance of the interactions between them.
1: Rebalancing cost pressures, especially in the housing market
Fundamentally, there is a need to consider the rewards from work in relation to the cost of living in East Sussex. Currently, there is a major mismatch: many working people simply cannot afford home ownership given the level of earnings they can command locally, and high costs also impact the rental market. This is one reason why young people leave East Sussex and spend at least the early part of their working lives elsewhere, but it is a systemic challenge for people of all ages and if unchecked, will impact on the county’s economic and social sustainability.
Evidence box
- Workforce perspectives
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As part of the consultation process which shaped the East Sussex Prosperity Strategy, a focus group was held with a group of employees from a business in East Sussex. The business is established and successful; it employs around 80 people. The employees in the focus group had different occupations, some linked to assembly, some focused on design, and some had roles which were linked to company management.
There was much consistency in terms of the feedback, which included:
- the challenges linked to housing and the concern that ‘I will never be able to afford a house even though I work full time’
- an observation that East Sussex ‘is filling up with people from London’ – with implications for housing in particular
- the need to ensure that town centres in East Sussex are vibrant, and that there is ‘something for young people to do’
- the need for more and better public services – e.g. it is very difficult to see an NHS dentist, or a GP
- a recognition that younger people (including the adult children of employees in the focus group) are very unlikely to remain in the local area and instead will leave to earn more elsewhere.
A range of organisations and strategies will have a role in addressing these issues, highlighting a need for an increasingly ‘multi-agency’ approach over the coming decades.
In East Sussex, the affordability of housing for those in ‘normal’ jobs – and without other sources of wealth – is a major challenge, and the links between housing and wider economic and social outcomes is well articulated (source: Annual Report of the Director of Public Health for East Sussex 2019/20). More homes will need to be built to meet identified local need, with more affordable housing of all tenure types and efficient transport networks to support people at all stages of their careers. This will be a priority in delivering the Strategy – alongside ensuring a supply of employment and creating the opportunity to generate higher incomes through business growth.
2: Understanding and responding to industry demand
Key to redefining the relationship between jobs, skills and economic growth in East Sussex is a better and more consistent understanding of the changing nature of demand.
Significant progress is being made in developing a better – and more sustained – dialogue with the business community, particularly as jobs and job roles change quickly. This needs to be sustained and in turn needs to be understood by both training providers of different forms, and by young people (and their parents) as they make decisions at different stages. For too long these different perspectives have been disconnected and detached – but the need for a real dialogue is overwhelming.
This dialogue needs to take place with reference to different timescales. There are immediate issues that need a short-term response, particularly in relation to sectors which are struggling to recruit in the context of changing patterns of international migration.
But East Sussex also needs a longer-term view. Locally there is a well established and active county wide employment and skills board so, building on the Local Skills Improvement Plan, businesses, training providers and those involved in education at all ages need to work together to anticipate how jobs and job roles are likely to evolve over the medium to long term, and they need to plan provision accordingly. They need to equip both young people and those who are further advanced in their working lives for what might lie ahead. They need to engineer real resilience within the East Sussex workforce, focusing on transferable skills and the profound implications of new technology.
3: Support for progression in work
In parallel, there is a need to ensure that more people are able to progress at work – recognising links to social mobility. This may mean making explicit provision for in-work training – which again requires a stronger dialogue between training providers and employers.
4: Working with employers to optimise the effectiveness of the changing workforce
Action will be needed over the years ahead to restructure jobs – and wider working arrangements – so that they are effective in relation to a workforce which is generally older and may also have wider responsibilities (e.g. caring for dependants) or other protected characteristics. There will be a need for real creativity and some flexibility, and acceptance of a profound change in the process of work (e.g. where, when and how it is done). In a tighter labour market with changing expectations of the nature of work, this also points to a greater emphasis on workforce health and wellbeing, and the imperative for equality, diversity and inclusion, and the role that employers can play in ensuring this and the links with greater productivity.
Within this context the implications of technology in general and automation in particular merits close consideration. Many routine jobs could disappear altogether. At the same time, there may well be scope for greater creativity. Older workers will need to adapt and both employers and training providers will need to support them.