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September 30, 2015

Skills shortage threatens major projects – Infrastructure UK

National Infrastructure Plan for Skills raises fears over industry’s ability to deliver major projects. Major infrastructure projects are threatened by the UK’s skills shortage, with a quarter of a million existing workers needing retraining and a gap of 100,000 workers over the next five years, according to a new government-backed

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Plans to devolve the Work Programme stimulate wide-ranging debate at Scottish convention

Matthew Crighton, Inclusion Associate and Content Director, on Employabilty and Skills Scotland Convention 2015: – The main question running throughout the Scottish convention was how the opportunity provided by the devolution of employment programmes might be used to build an integrated employability and skills system which can deliver better outcomes for

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BDC 318 : Jul 2024

September 30, 2015

Skills shortage threatens major projects – Infrastructure UK

National Infrastructure Plan for Skills raises fears over industry’s ability to deliver major projects. Major infrastructure projects are threatened by the UK’s skills shortage, with a quarter of a million existing workers needing retraining and a gap of 100,000 workers over the next five years, according to a new government-backed report. The National Infrastructure Plan for Skills, published by Infrastructure UK, sets out concerns in major sectors like roads, rail and energy amid fears that major projects will be affected. The report found that through growth in infrastructure investment, there was a demand for over 250,000 construction and over 150,000 engineering construction workers by 2020, with a shortfall of nearly 100,000 additional workers by the end of the decade. This will also mean a need to retrain and up-skill around 250,000 of the existing workforce over the next decade in addition to the need to recruit new workers. Programmes like HS2 and increased investment in roads will put further stress on the industry’s capacity to deliver, the report found. It said that as well as a deficit of skilled engineering construction workers, the railway industry faces challenges recruiting experienced managers in both project and commercial teams, with HS2 demand amplifying the problem. It added that increased investment will place “a considerable burden on plant, labour and materials nationally and regionally”. The report said: “While the UK construction sector faces challenges in terms of attracting new entrants, the issue is particularly acute for roads. “A perception of an often unfavourable working environment near live traffic, and the requirement for much work to be carried out at times when the road network is least busy make it difficult to make a positive case for careers in the sector. This is compounded by a lack of clear guidance on entry routes for those that decide to join the industry Among the steps taken to address the concerns over skills was the appointment of Crossrail chairman Terry Morgan to develop a transport and infrastructure skills strategy, to help the transport industry ensure a continuous pipeline of skilled workers The report also recommends that regional skills pipelines should consider skills demand from both economic infrastructure and social infrastructure works such as housing and construction of schools, hospitals and commercial developments. The Infrastructure UK work pipeline has received criticism in the past for not including housing, given the desperate shortage of supply versus demand for new and affordable homes. The report also advocates the need for clients to work together to “identify opportunities for skills to develop and transfer between projects”. It called for simplification of the current system of skills passports and competency cards, with “clear thresholds for transferable basic level qualifications to minimise need for duplicative retraining”. The report also references Construction News’ Barometer for Q3 2014 which found that 97 per cent of respondents were concerned about a lack of skills and staff. Comment Commercial secretary to the Treasury Lord O’Neill said: “This report is just the first step in addressing how we can work with industry to ensure our workforce’s competitiveness for the future. “We’ll now develop a clear action plan, set to not only strengthen the economy by delivering our most ambitious projects from transport to energy, but improve the quality of citizen’s lives too.” Richard Threlfall, head of infrastructure at KPMG UK, said the report was one “the industry cannot not ignore”. “It forces the construction industry to look beyond the current skills crisis to the long-term need to invest in its people, get serious about apprenticeships, and to re-train and diversify its workforce”. “The recent UK Industry Performance Report revealed that construction employees on average are receiving only 1.2 days of training in a year. We need an entirely different mind-set in the industry if we are to meet the challenge which Infrastructure UK has identified.” CECA chief executive Alasdair Reisner said: “CECA welcomes this mapping document as a resource for industry to prepare for the substantial amount of working coming online over the next few years. However, we can only meet the anticipated skills demand with the right environment. “To this end CECA feels that this better visibility of skills demand should work hand-in-hand with a policy environment that encourages companies to invest in these skills. According to the CITB, Experian, Infrastructure UK analysis more than 500,000 people will be needed in the industry by 2039 based on projected workforce, but that could rise to almost 600,000 if average growth of 1.8 per cent is recorded, compared to around 500,000 if 1 per cent growth, or low growth is recorded. Retirement and people leaving the industry continues to cause concern. In power, for example, an estimated 50 per cent of current employees are set to leave the sector and 200,000 new recruits will be needed by 2023. In rail, 20 per cent of the workforce is over the age of 55 and 25 to 30 per cent of the traction, rolling-stock and electrification workforce will leave in the next five years. Regional breakdown: Northern powerhouse: Current workforce 85,000 / Skills peak 99,000 / Skills gap 14,000 (16%) South-west: Current workforce 29,800 / Skills peak 33,400 / Skills gap 3,600 (12%) East of England: Current workforce 24,300 / Skills peak 27,600 / Skills gap 3,300 (14%) The Midlands: Current workforce 43,700 / Skills peak 56,600 / Skills gap 12,900 (30%) London and the South-east: Current workforce 108,800 / Skills peak 124,500 / Skills gap 15,700 (14%)

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Plans to devolve the Work Programme stimulate wide-ranging debate at Scottish convention

Matthew Crighton, Inclusion Associate and Content Director, on Employabilty and Skills Scotland Convention 2015: – The main question running throughout the Scottish convention was how the opportunity provided by the devolution of employment programmes might be used to build an integrated employability and skills system which can deliver better outcomes for people in Scotland. It took place in the middle of the wide-ranging consultation on Scotland’s Future Employment Programmes which the Scottish Government launched in anticipation of receiving these powers – about “how government can best help people find jobs – jobs that are good and fair”, the Cabinet Secretary Roseanna Cunningham told the convention. Some have thought that perhaps it is too wide-ranging, considering the tight timescale for preparing ITTs in sufficient time to allow a start on new contracts in April 2017. Yet it isn’t possible for anyone to be very specific when the terms of this devolution are not yet known, let alone the scale of funding. High-level discussion of this is continuing and I imagine some interesting conversations between John Swinney MSP and DWP ministers – the essence of Scottish devolution involves a block grant and complete discretion with the SG on how that is spent. This would imply that the scale, target groups and even purposes would be determined in Scotland not London. Given the Treasury and DWP concern that the Work Programme boost off-flows from benefits and actual levels of spending depending on contract performance I doubt there will be an easy meeting of minds. The Scottish Government, of course, continues to press for devolution of Jobcentres as well and from the point of view of integrated service delivery, many at the convention felt it was hard to see the logic of keeping Jobcentres reserved while devolving the two main employment programmes. The link with benefits administration must have been at the root of Work Programme’s reluctance to let them go, but as Jim McCormick of the Joseph Rowntree Foundation pointed out the problem of divided accountability will instead run through the devolved employment programmes – to the DWP for benefits conditionality and to the Scottish Government for performance. The low-hanging fruit from the Work Programme’s successor being Scottish will be an end to the line separating services for its participants and the rest. The Scottish Government and local authorities have been reluctant to pay for additional services for those customer groups, which might have boosted Work Programme performance to the financial benefit of the primes; and this has been reinforced by guidance on the use of ESF funds in Scotland. This is the straightforward basis for confidence that overall improvements will arise, but thinking about exactly how is at a formative stage as reflected in the wide-ranging discussions about assessment and early intervention, holistic service design, management information and the right incentives for providers. There are uncertainties about the practical implications for the programmes run by Skills Development Scotland and the capacity to extend the integration to part or all of the activities of the FE colleges. If the question of performance is at the core of the design of a Scottish replacement of the Work Programme, the initial question is ‘against what performance measures?’. A truly integrated system will hit skills, progression and health as well as employment targets. Some of the sessions at the convention grappled with the challenges of how to design outcomes and measures which would reflect all of these things and retain some of the clarity of the Work Programme commissioning. Alongside these aspirations, hearing from Andy Hirst of CPC about the research study he did for the Scottish Employability Forum was sobering – the information needed to report on how much money is spent on which groups of customers across Scotland is not available from most of the current systems; and although there are some good area-based MI systems which do aggregate data about individuals and groups from multiple organisations, ‘no system told us how much money is spent on individuals and the outcomes’. While pressing for further devolution from Westminster, at some point in designing its new system the Scottish Government will have to respond to calls for yet further devolution regarding employment programmes to localities – a case made by Iain Gray MSP speaking for Scottish Labour, and by local authorities. As with the question of Jobcentres, perhaps we’ll be hearing the term co-management more frequently in the future. It will also have to decide how to respond to the calls that Scotland’s voluntary sector has opportunity to play a more central role in programme delivery; and seek to do both of these things without creating greater complexity in a system where the aim has to be clarity and accessibility for both job-seekers and employers. Scotland’s stable and mature institutional infrastructure and policy frameworks probably put it in a better position to tackle these matters than the rest of the UK. Alongside the will to work together shown at the convention, this is one of the reasons why Dave Simmonds felt able to suggest that Scotland’s performance will be 5 percentage points ahead of the UK average in 5 years time. Corresponding to about a 20% improvement in performance, he has set down a significant challenge. It will be interesting to see if the results of the consultation indicate something coherent and consensual on which the next steps can be constructed.

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