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1. I am very surprised at the use of the Working Futures employment forecasts for 2007-2017 in the latest Skills Audit report for England. These can be found in Table 5 on Page 19.
   
   While the figures in Table 5 are caveated a couple of paras below, in my view not nearly strongly enough. While I do agree that structural and cyclical changes should be viewed separately, and overall employment has not fallen as badly as initially expected, we are still talking about a significant level of oversupply in the labour market by 2012, a very different picture from that painted by the Working Futures forecasts.
   
   Many would also argue that, while the fall in employment has not been as large as expected, this is in large part due to significant growth in levels of 'underemployment' (part-time working, etc.) and that growth in employment, when it returns, will be consequentially slower as the 'slack' in the system is taking up. Combine this with the realisation that employment growth in the decade to 2007 was largely driven by the public sector and that adressing public debt is going to constrain this in the future, I would argue that a structural change is taking place, making the Working Futures forecast redundant.
   
   My worry is that including the Working Futures figures in the report will call into question the validity of the whole report in many readers' minds, despite the fact that it includes much of interest and use.
   
   Kind regards,
   James Hastings

   James Hastings on 22nd Mar 2010
2. 

   Perhaps the first point to make is that Working Futures 2007-17 does not take account of the recession and therefore cannot take account of the possible, post recession, labour market changes that are speculated. This is highlighted in the paragraphs that follow Table 5 on page 19 of the Key Findings document. Working Futures 2007-17 was, and as far as we’re aware is, the only UK and economy wide employment forecasts based on official sources of data publicly available at the time of writing Skills for Jobs. However, the forecasts could not take account of the recession because they were produced using pre-recession labour market data. That’s why the UK Commission has publicly committed in Skills for Jobs (vol. 1, p 39) to develop a set of projections for the period 2009-15 which takes account of the impact of the recession on, and structural change in, the labour market. These updated projections will be used in the next National Strategic Skills Audit for England and published separately by the UK Commission as part of its evidence report series.
   
   It’s also important to emphasise that Working Futures is only one of several inputs on which the Audit’s overall conclusions are based. A consideration of the current drivers of change along with an appreciation of current sectoral and occupational changes and their interaction, achieved through the use of numerous quantitative and qualitative sources, all contributed to the Audit’s findings.
   
   Any suggestion that we may well experience an oversupply of labour following the recession only serves to increase the importance of action to raise employers’ demand for, engagement with, and investment in skills; one of the UK Commission’s strategic priorities.
   
   Lastly, it is true and we acknowledge on page 19, that the anticipated cuts in public spending are likely to slow the growth in public sector jobs and also there may be ‘slack’ to be absorbed before the labour market sees net job growth again. But focusing only on the public sector ignores other sectors as a source of job growth. In the period 1997-2007, Working Futures 2007-17 illustrates that the Business and Other Services sector (Financial Services, Business Services, and Other Services) grew by nearly 2 million jobs compared to less than 1.4 million in Non Marketed Services (Public Administration, Education and Health and Social Work). Add the jobs created by other private sectors (Construction, 460,000; Retail 226,000; Hotels and Restaurants, 246,000; Transport and Communication, 200,000) and it is evident that the private sector was a much larger source of job growth than suggested.
   
   Posted on behalf of the UK Commission

   Toby Jenkinson on 26th Mar 2010
3. Dear Toby,
   
   Many thanks for your response. With regard to past employment growth, you are quite right to indicate that many of the private sectors did demonstrate increases over the decade to 2007. However, what you omitted to mention was that the manufacturing sector saw a signifant decline in employment. Thus of the 2.55m growth in FTE employment between 1997-2007, the majority (1.4m) was in the public sector, the net growth in the private sector being around 1.15m. While this is not to be sniffed at, my point was that with the public sector likely to be under quite severe financial constraints over the next few years, employment growth is likely to be much slower than it was in the decade to 2007.
   
   Kind regards,
   James Hastings

   James Hastings on 12th Apr 2010
4. Dear James,
   
   Thanks for your comment.
   
   You are right to state that manufacturing saw a decline in employment in the 2000s. Using data from the Labour Force Survey we can see that manufacturing as a sector contracted in every year between 2003 and 2007 (see the UKCES Almanac 09). However, during this time, the public sector (public administration, education and health) did not grow consistently; it contracted in both 2006 and 2007, although we would not suggest these contractions were on the same scale as the severe and painful falls in manufacturing employment.
   
   Using this data from the LFS does show the effects of the recession beginning to bite (a fall in employment in banking in 2008, for example; a large fall employment in manufacturing in 2008). However, the overall trend in employment in all sectors of the economy from 2002 to 2008 was for growth across the period.
   
   The numbers of job losses in manufacturing and the numbers of jobs created in the public sector to an extent “cancel out” – they are broadly comparable (indeed, that public sector employment is a device used by government to ameliorate failures of the private sector is an argument advanced by Buchanan et al (2009) in a working paper for the Centre for Research on Socio-Cultural Change). Disregarding these two sectors, every other sector measured saw growth across the period.
   
   Despite all this, it is clear that public spending reductions will mean that public sector job growth will be constricted in the beginning years of this decade. The UK Commission therefore sees its remit to increase employer investment in skills, maximise sustainable employment and build a demand-led employment and skills system as more important than ever – to help the UK return to skilled, valuable, jobs growth.
   
   On behalf of the UK Commission.

   Toby Jenkinson on 12th May 2010