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This toolkit has been prepared by the Centre for Cities and the UK Commission for Employment and Skills (UKCES) to offer guidance to local organisations who would like to make better use of Labour Market Intelligence (LMI) in designing skills, education and employment programmes to improve the local economy. This includes local authorities and LEPs but also a wider range of organisations who could benefit from the insight provided by LMI, including colleges, training providers, voluntary organisations and careers advisors.

Box 1: Defining Labour Market Intelligence

Labour Market Intelligence (LMI) is produced by collating, analysing and interpreting a range of available labour market data. This data can be quantitative or qualitative in nature.  As such, statistical datasets, surveys, interviews and discussions can all feed into the development of LMI, providing insights into the past, current and likely future state of the labour market. High quality LMI can be used to inform policies aiming to overcome a range of labour market challenges, and help to build on existing strengths.

Supply and demand for skills varies across and between cities and local areas, meaning the degree of skills mismatch places face and the underlying reasons for these can differ widely, from low qualification levels of residents to a general lack of jobs. A detailed understanding of these local-level challenges is vital in developing programmes and policies that successfully address these weaknesses. Robust, local-level labour market data (both quantitative and qualitative) is needed, along with analysis and communication of this data and resulting recommendations by those with a strong understanding of its context. Such LMI can be used to develop this clear understanding and feed into the design of policies and programmes aiming to improve both the short- and long-term matches of labour supply and demand.

Recognition of the importance and reach of local LMI has been growing for a while, with the four UK national governments agreeing that local skills policy must be guided by local LMI to secure economic development. The recent devolution deals have further increased the demand for and use of LMI, as they require cities to present sound evidence on the state of their economies to show they have a good understanding of their local labour market before they can gain the powers and funds needed to direct resources to their self-identified priorities. With more control over skills being a central ask in many devolution deals, and with current government reviews such as that of local post-16 further education taking place, the need for increased awareness of, access to and use of robust, timely local LMI is becoming ever more important.

In both the UK and internationally a range of stakeholders are already using LMI in innovative ways, providing insight for others into the range of ways it can be applied and lessons in how to engage end users. This report builds on existing guidance in collating and using LMI to present a six-step process users can follow to develop LMI that is vigorous enough to feed into policy development. This covers design, data collection, analysis, translating into action, communication and ensuring LMI is kept up-to-date. It also presents cases studies of uses of LMI, both in the UK and internationally, to draw out best practice in the use of LMI to inform a wide range of local policy decisions. A list of publically available labour market data sources that present analysis at the sub-national level, and which will allow for a picture of local labour markets to be built up, is available here.

Report author

Maire Williams
0207 803 4317

Download the full report

Our report explains the six-step framework for developing labour market intelligence, and pulls out the key recommendations for local policymakers using LMI.