National Infrastructure Commission (NIC) urged to include Labour Market Resilience in Infrastructure Study

Energy & Utility Skills has responded to the NIC study on the resilience of the UK’s economic infrastructure.

  • NIC urged to ensure labour market resilience included within the infrastructure resilience scoping and main phase
  • Energy & Utility Skills advises that environmental infrastructure businesses do not have the policy and regulatory protection they need to access and retain a sustainable labour market.

Energy & Utility Skills is calling on the National Infrastructure Commission (NIC) to include labour market resilience within their infrastructure resilience scoping and main phase.

The energy & utilities sector are the largest single contributor to the £0.6 trillion National Infrastructure Plan (NIP), and underpins almost every UK business sector with their supply of environmental infrastructure and essential services.

Energy & Utility Skills is advising that without the NIC project concluding whether the quantity and quality of workforce exists to deliver and maintain UK infrastructure at an affordable cost, considering resilience of the infrastructure alone is an arbitrary point. It seems logical that the NIC would want to satisfy itself that utilities have the optimum access to the labour markets and high productivity.

Energy & Utility Skills has warned that the environmental infrastructure businesses do not yet have the policy and regulatory protection they need to access and retain a sustainable labour market. Most sponsoring Departmental bodies for utilities have no focus at all on the issue in their strategies. In addition, UK utilities employers’ experience of the increasingly devolved skills system has shown that the four nations’ policy makers are often currently working in independent and opposing directions.

All of the basic policy and regulatory mechanisms to create and deliver a sustainable labour market strategy for the whole UK already exist in isolation, but they lack any focus on the utility sector or coherence. The vast majority of the necessary stakeholders needed to ensure sustainability exist, but with no guiding mind to ensure they all contribute to one shared UK goal, it is a far from optimal system. There are many pieces of the infrastructure labour market jigsaw puzzle, but no one yet owns the picture on the lid of the box.

Former Commercial Secretary to the Treasury, Lord O’Neill, previously advised:

“It is crucial we have the right people with the right skills in place to build and maintain our first-class infrastructure, essential to rebalancing our economy.”

In the water sector, Ofwat has led the way in recognising the vital importance of workforce resilience to the delivery of water strategy in England & Wales. In energy, the Ofgem RIIO-2 price setting process has only just included workforce resilience in its thinking.

Ofgem advises:

“Resilience is not just about network assets: it is also about the people and processes put in place to build, operate, repair and maintain those assets, particularly when networks are under stress. Human resources with the right skills are essential to the safe and reliable operation of a network, without which the ability to deliver the services expected by customers would rapidly deteriorate.”

Energy & Utility Skills has also questioned the validity of the Chancellor’s terms of reference, and cannot see how the NIC can coherently evaluate or judge the actions needed to improve the resilience of the UK’s national infrastructure whilst explicitly excluding the security of the supply chain and the UK’s withdrawal from the Europe.

These mission-critical supply chain businesses are an embedded part of the infrastructure delivery model that builds and operates many of the UK’s most vital assets, and their resources and expertise bring great innovation and cost saving. They operate across multiple countries, and are not obliged to stay within the UK infrastructure market. They are at liberty to leave, or adjust their risk premia, should other business sectors or countries prove to offer lower risk or better returns or be more viable in the long-term. It is vital for UK customers’ bills and service levels that these supply chain businesses see UK infrastructure as one.

 The impending withdrawal from the European Union impacts every major aspect of infrastructure resilience including central and devolved government policy intent; market stability; policy affordability; regulatory approaches and financing decisions; City investment confidence; labour market resilience and the very operating model sustainability of the direct and indirect companies who deliver infrastructure for the UK economy. To dismiss such a pivotal issue will leave the resulting study incomplete.

 

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