By Neil Robertson
As the British government grapples with how best to achieve growth, a shift in mindset focussing on skills, especially vocational skills, will be worth the investment. That’s because hands-on skills are the backbone to achieving growth, productivity and social value – all vital for a prosperous economy.
Right now, the UK has another ticking economic time bomb to add to the government’s growth ambitions. That is an enormous wage inflation directly caused by specific skill shortages. For the infrastructure sector the high demand skills pushing up cost are predominantly level 2 or 3 skills such as digger drivers, concrete pourers, and welders.
We are also noticing that specialised in-demand skills including high voltage electrical engineering, software engineering and project managers are in short supply. Analysis by the Construction Industry Training Board (CITB) found that to meet demand for infrastructure projects, housebuilding and ongoing repair and maintenance, the sector’s workforce must grow to around 2.78M by 2026 and current projections mean the shortage will be around 266,000.
There are three main reasons for the skills shortage. Historically we have placed a higher value on academic subjects and not done enough to encourage technical and vocational skills such as engineering and trades. Secondly, Brexit has restricted supply of essential workers entering the UK. Lastly, it’s clear that our new greener and rapidly changing digital world require brand new skillsets.
The good news is that things are slowly changing for the better even against the backdrop of Brexit there are some really positive outcomes. So, what exactly are these improvements and what must government, businesses and individuals do to increase the pace of change and create growth?
Over the past few years, businesses have been encouraged to create alternative routes into employment for young people making decisions about their post-16 educational choices. T-levels have been developed in collaboration with businesses as a technical alternative to A-levels. These technical-based qualifications make sure that content meets the needs of industry and prepares young people for work, further training or study. T-levels are offered to 16-19 year olds after finishing their GCSEs.
Employers are also providing routes into work with apprenticeships, on-the-job training and the government’s Kickstart scheme. All these practical initiatives are bearing fruit and challenging old mindsets. In the first three quarters of 2021/22 academic year, 288,800 post-16 year olds started apprenticeships, up 14.1% from the previous year. And, more positive news is that engineering apprenticeships in the same period reached 23,300 up 42.2% from 5 years ago.
A degree apprenticeship is another route into more specialist employment, these apprenticeships enable students to gain a full undergraduate or master’s degree while they work, typically spending 20% of their time at university and the rest on the time working and learning on the job. Degree apprenticeships take three to six years to complete in England and Wales, depending on the course level. According to government figures, in 2017 there were just over 1,000 degree apprenticeships, by 2021 this has risen to 6,000 across England and one-quarter were in engineering and manufacturing with 27% female, and nearly 18% were from a non-white background.
In Scotland degree apprenticeships are known as “Graduate Apprenticeships”. Since their launch in 2017 over 3,5000 individuals have taken up Graduate Apprenticeships, involving 500 employers. And importantly, by 2020, the number of females studying STEM related Graduate Apprenticeships was up 3% to 21.2%.
There is more good news on social value, as employers are having to reach into their own communities to find workers. More often than not they found them in disadvantaged communities where many young people have been overlooked due to eager Europeans willing to work. The most socially valuable thing that a business can do is to offer work, work experience and new skills to disadvantaged and ignored local communities on their doorstep.
Employers are having to reach into their own communities to find workers
Evidence from large businesses involved in delivering the mega project HS2 – Balfour Beatty, Costain, Skanska and Vinci – suggest that their recruitment processes have become more open to a far wider range of candidates.
NSAR’s analysis on social value outcomes for rail and infrastructure projects found that HS2’s “10% target of new recruits from disadvantaged backgrounds” at first looked like it may be a stretch, however the great news is that it has been achieved. Furthermore, we think that 20% is achievable for projects such as the Transpennine rail upgrade.
The third reason for the skills shortage is really a lack of the right skills. Achieving net zero by 2050 requires a different skillset involving digital solutions and tools. The employers that will find it easier to attract young talented people into green jobs understand that young people want to work in interesting companies, where environmental and societal values are taken seriously.
The green agenda will create new demand, we have already seen this in the offshore wind sector where enlightened policies created a highly skilled, highly productive sector incredibly quickly. For off-shore wind, the government introduced legally binding “Contracts for Difference” as a mechanism for supporting low-carbon electricity-generating projects and attracting new sources of investment whilst minimising costs to the taxpayer.
A study by Oxera for the Rail Delivery Group last year found that developing a net zero railway could create up to 6,000 long-term jobs in the sector nationally between 2024 and 2050 whilst also supporting the growth of emerging high-value manufacturing sectors. Electrification of the railways in the UK, and throughout the world will be a key part of the net zero future, it means electrification skills will be sought after. If the UK wants to be a leader and compete internationally, then seeking out and investing in those growth sectors and skills will be critical for future.
Engineers are well placed to support the shift to net zero, they can use their knowledge of systems thinking to approach the complex challenges of decarbonisation, as well as enhancing the resilience of infrastructure and buildings to climate change. A green economy will without a doubt increase the demand for engineers, and also develop and enhance their skillset.
The government is rightly focusing its attention on the economy and specifically developing its growth plan, however it must do so by focusing upon developing those sectors and in-demand skills that will create respectable jobs that will in turn improve living standards and level up the UK.
*Neil Robertson is chief executive at NSAR