The Prime Minister, Boris Johnson, updated the UK this week on his views on impending job losses arising from the COVID-19 virus and the resulting global impacts on business and society. He advised; “On the questions about what is going to happen as the months go by and the effect of this recession starts to bite, and let’s be in no doubt, of course, I am afraid, tragically, there will be many, many job losses. And that is just inevitable because of the effect of this virus on the economy and because of the shutdown that has taken place. And all I can say is that in dealing with that fallout from coronavirus, we will be as activist and interventionist as we have been throughout lockdown.”
“There is no other country in the world I think that has done as much, or few others, who have done as much as the UK in putting our arms around workers with the furlough scheme, looking after companies that have run into difficulties, helping in any way that we can. We will be just as interventionist in the next phase. Investing in the UK economy, investing in infrastructure, taking our country forward so that we bounce back as sharply and decisively as we can. That is going to be our priority.
“One thing I want to say, for young people in particular for who the risk is, I think, highest for losing jobs and them being out of work for a long time. I think it is going to be vital that we guarantee apprenticeships for young people. We will have to look after people across the board, but young people in particular, I think, should be guaranteed an apprenticeship.”
One of the first steps needed by the Prime Minister to turn his ambition into practice, will be to have his Secretary of State for Education (Gavin Williamson) look again at the funding rules and criteria for apprenticeships in England. Another is to have his Cabinet consider how they influence and persuade the three devolved nations’ governments to support their concept. A key point here is that around 80%-85% of many industrial employers’ needs are for upskilling or re-skilling, not for new career apprenticeships.
At the moment in England, the rules for apprenticeships are set by the Education and Skills Funding Agency (ESFA). They set out clearly that to start an apprenticeship, you must give the person a job and the individual is an employee. They advise “The apprentice must have a job role (or roles) with you that provides the opportunity for them to gain the knowledge, skills and behaviours needed to achieve their apprenticeship.”….”The apprentice must work for you, or a connected company or charity as defined by HMRC.”….”An apprentice has to be employed continuously for the duration of the apprenticeship.”
Unless those arrangements are amended, the Prime Minister is ultimately left addressing a labour market risk, by making a pledge to solve the potential lack of employer jobs for young people by guaranteeing employer jobs for young people.
The UK skills system is also disjointed. It is currently constructed in a way that has all the main labour market policy levers – such as tax, productivity, immigration, migration and many others – sitting centrally, but the vital skills policy aspects devolved. UK skills policy is also primarily based around education and further education, rather than being focused on solving employment needs, and has been devolved initially to nations but increasingly to regions and local interest groups. At this stage, no UK labour market or workforce strategy exists to give the UK government a road map for ensuring optimal employment, and studies by bodies such as the National Audit Office, have shown minimal connection between skills policy and labour market policy, and no connection between skills policy and the nation’s skills need.
Currently, all four nations have totally different and often opposing regimes for apprenticeships and funding. Under the policy regimes, an apprentice graduating in England is not recognised as such in Scotland, Wales or Northern Ireland and vice versa.
The Prime Minister can start to remedy the overall strategic situation for the UK very quickly, by appointing a senior Cabinet member immediately to create a single UK labour market and workforce strategy, and inviting their devolved peers in to work with them. Equals working together on a shared ambition.
This would start to align all the related activities and funding, so that the UK can maintain, and progress its place as a leading global economy, ensure that all the critical industries are fully resilient, and work to guarantee societal damage from the pandemic and European exit is minimised or mitigated. Devolved approaches and flexibility can easily be maintained, but simply coordinated towards one shared central ambition. The need for one coherent UK strategy is overwhelming, and the solution could realistically be started this week; there is no cause to wait. The Industrial Strategy has already publicly committed all four nations’ governments to this style of coherent working, and the Energy & Utilities Skills Partnership has been calling for this since 2017.
The Prime Minister also referred explicitly in his daily briefing to investing in infrastructure as one solution to driving the economy forward. These vital infrastructure industries, such as gas, power, water and waste management, have a very long and respected history of investing in apprentices, and throughout the pandemic have held a mantra of maintaining these wherever possible. Many have already completed all of the recruitment needed for their next intakes, with some companies already doubling their commitment. Their main current challenge is to manage the social distancing needs so that classroom training can restart. Virtual training can only play one part in building the skills of an apprentice according to the employers and the students.
The Prime Minister does however have a potential champion in the UK utility infrastructure sector, who already have a history of turning policy reform ambitions into practice. This includes the English apprenticeship system, where utility businesses secured the first ever Ministerial sign off of a Trailblazer Apprenticeship Standard, graduated the first apprentice and have since end-point assessed another 1,500 technical apprentices to move them into the workforce. The sector has also offered its services as a test bed and ‘can-do’ partner to central and devolved governments for many years.
The potential for employment in the utility infrastructure sector is significant. The latest Energy & Utilities Skills Partnership Workforce Renewal & Skills Strategy (due out June 9th) will show the scale of the environmental and societal role that these businesses already play, and also that the potential increases dramatically, as the pursuit of zero carbon goals intensifies. To ensure that the many separate needs for skilled talent align, there is a clear need for a central and aligned labour market strategy for infrastructure.
One exists and so it reduces further the task ahead for the Prime Minister. The existing National Infrastructure Plan for Skills is currently held by the Infrastructure & Projects Authority, a body within HM Treasury providing central expertise on infrastructure and major projects and closely working with Cabinet Office. HM Treasury are also the ultimate owner of the Apprenticeship Levy. It is however, badly out of date, with the UK labour market situation and infrastructure policy needs, and was last updated in 2015.
The National Infrastructure Commission openly recognised the disconnects, when their Chair (Sir John Armitt) briefed the All Party Parliamentary Group for Infrastructure last month. Sir John advised: “At present, there is an insufficiently joined-up approach to infrastructure skills development in the UK, with a wide range of responsible bodies operating across different geographic and political boundaries. The human capital aspects of the National Infrastructure Plan for Skills need to be refreshed to help ensure our pipeline of future workers is adequate for the challenges ahead.”
Energy & Utility Skills Chief Executive, Nick Ellins commented, “Last night’s statement by the Prime Minister is welcome and recognises a UK labour market that has transitioned from ‘full employment’ and significant sectoral skills gaps just a few weeks ago, to potentially seeing a large number of highly talented and diverse workers becoming available. Managing that UK impact in the most efficient, cost effective and humane way, requires one coherent approach, and one labour market and workforce strategy that the four nations’ governments own and work towards. It is incumbent on us all to work together to make sure that all those impacted find new careers and salaries with the many employers desperately seeking skilled workers with the right attitudes and behaviours. The utility sector stands ready to help”
“Apprenticeships are one vital part for helping all age groups into work, but the larger need and biggest opportunity set out by employers is for reskilling and retraining. It is time to look again at emerging initiatives such as the National Skills Fund and National Retraining Scheme so that they can be repurposed. To do so, would allow governments to help ensure that the UK’s most critical industries can be the first to access the human capital that is inevitably becoming available, and quickly be helped to give the skills and competencies required to move them into their vital workforces. Ensuring the existing National Infrastructure Plan for Skills is robust and responsive should be an immediate priority for HM Treasury. Aligning all skills and labour market policy with the Chancellor’s announced human capital programme and productivity aims is intuitively a next step. Repurposing the existing Industrial Strategy to be an overall guiding plan for the nation is straightforward. The ‘activist and interventionist’ approach put forward by the Prime Minister last night means that such changes are not onerous and can easily happen, and this should start immediately.”
The steps for implementing an aligned approach to UK labour market and workforce resilience are outlined in the new Energy & Utilities Skills Partnership Workforce Renewal & Skills Strategy for 2020-2025 and across the news area of the Energy & Utility Skills website.