“This is the first time, to my knowledge, that the government has ever altered its benefits rules to accommodate a training programme,” beams Neil Robertson, chief executive of Energy & Utility Skills (EU Skills), as he announces a special dispensation that has been granted to the body’s collaborative training project in the northwest of England.
This unusual favour means those who enrol on a new set of pre-apprenticeship traineeships in the North West – where about 100,000 people aged between 16 and 24 are unemployed – will still be eligible for Jobseeker’s Allowance while they complete their training.
The schemes were designed under the Energy & Efficiency Industrial Partnership (EEIP) by a group of regional employers, led by United Utilities, to fast-track young people who are not in education, employment or training (NEETs) into full-time work. The traineeships will equip young people to apply for jobs in the utilities sector as well as developing their employability generally.
Robertson says it’s a major leap forward, and one that should be celebrated and emulated elsewhere. “Our success with this is massively important,” he states. “It shows that if you take a step forward to do something good, people will come and join you.
“Youth unemployment, whatever the shape of the UK and whatever government is in power, is still one of the biggest challenges we face as a nation. It is persistently high.”
Despite significant reductions in youth unemployment across the UK this year, few would deny the truth of this. But why should utility companies be the ones to take action on this social problem?
Educated self-interest comes into at play as Robertson clarifies his thinking with some alarming figures on the skills gaps facing the utilities sector.
According to labour force analysis conducted by EU Skills, about 50 per cent of the utilities workforce is set to retire in the next few years. Current recruitment to fill these positions – particularly technical roles – is dismally insufficient.
“We need 40,000 technical recruits over the next ten years, but if we continue on the current steady state for recruitment, we will be able to fill just 25 per cent of those roles,” says Robertson.
The programmes now emanating from the EEIP will improve the outlook, he says, but they will not make the shortfall disappear. Instead, EEIP’s efforts should enable industry to fill about half of its technical skills requirement over the next decade.
With the remaining shortfall still looming large, Robertson urges concerted action, with board-level backing, to attack utilities skills gaps on two fronts.
First, and most importantly in terms of skills sustainability, new and innovative ways of getting more out of the UK education system and new recruits must be introduced.
Second, and more controversially, there must be a rational acceptance of the need to bring in skilled workers from abroad to meet specific, immediate skills requirements.
Within the first element of the battle plan, Robertson sees four cross-cutting themes around which companies can act. These are: young people; improving productivity and training for frontline managers; using procurement to mandate training and skills investment among contractors and the supply chain; and disseminating clear labour force information to schools, colleges and universities about job opportunities in the sector.
Thanks to some hard work conducted by EU Skills, this information is now readily available, says Robertson. “We can say, in any region, how many jobs will be needed in the next five years.” Stabbing at the air, Robertson says: “We can say we’ll want 200 of them, 500 of them, and so on.”
All secondary schools, colleges and universities must now provide information about the employability of their leavers, so this information should be eagerly welcomed and, adds Robertson, for sceptics who have been put off by past difficulties in communicating with educational institutions, there’s an employer-friendly mechanism to help utilities get their message across.
“We’re using the National Grid-inspired Careers Lab model to get this information into the education system. This is an excellent system for school-business relationship building.”
It all adds up to a picture of progress that utilities should be proud of, says Robertson. But unfortunately there are barriers that prevent the sector from fully capitalising on these efforts and turning them into part of a proactive growth strategy – rather than simply remedial action.
The first problem is the highly politicised nature of energy policy and the poor profile of utilities in the public eye.
“There’s a feeling in the sector at the moment that companies should simply keep their heads down in case they get shot at,” Robertson observes. “This is understandable, but wrong. This is exactly the time when we should be shouting about what we are doing, about the value of the training on offer to individuals and about the economic value of the jobs we create.”
This latter point leads Robertson on to the second barrier: the utility sector’s notable absence from the government’s industrial strategy, its framework for economic rebalancing and growth.
Since this strategy was published in September 2011, 11 sector strategies have emerged, designed to position those sectors – which are seen as strategic priorities – to maximise their growth potential.
Offshore wind and nuclear generation both appear in this elite group, but Robertson argues that energy and utilities should be on the list as a “system-level” entity. “We’re out of alignment,” he says, “and this is stopping us forming a consistent and coherent growth agenda, including dealing with sector skills problems in the optimum way.”
Why were utilities left out of frame when priority sectors were identified? Robertson says it is because of the time at which the government took a snapshot of economic performance across all sectors.
“The government took its snapshot of the energy and utilities sectors at a time when a lot of regulation and policy was being finalised, which was poor timing and led to government characterising energy and utilities as low-growth areas.”
A second factor that led to government undervaluing the sector’s ability to contribute to an economic turnaround was its lack of appreciation of the significance of the sector’s skills gaps. “They failed to appreciate that, even if the sector had no growth, with half of our people leaving in the next ten years, the sector still offers a huge employment opportunity.”
Finally, the government sealed an “insensitive” view of utilities by failing to take into account “the entrepreneurial activities that many utilities support outside their regulated business”. Robertson says he is referring to renewable energy investments and research in water firms, for instance.
EU Skills’ chief, himself an ex-government man, is keenly working with the Department for Business, Innovation and Skills to get this vision of utilities reassessed. “Our positioning in relation to broader industrial strategy needs tidying,” he confirms and, on the back of recent conversations, he is confident this will happen soon.
In the meantime, EU Skills will continue to support ways to put the energy and utilities sectors into positions of greater influence by working around strategic policy inadequacies.
The EEIP is in itself a pertinent example of this.
The partnership came into being when EU Skills won a bid with the government’s Employer Ownership of Skills (EOS) programme – a £340 million initiative to put employers in charge of government funding for the design and delivery of vocational qualifications.
This success made the EEIP the first and largest of five industrial partnerships to be formed under EOS, a development that took many by surprise.
“No-one expected us to get an industrial partnership,” recalls Robertson. “We weren’t even in the running. And yet the bid was so strong we won.”
This has enabled EU Skills to create a sector council for strategic skills development and the identification of growth opportunities – similar to the councils in those sectors that were awarded sector strategies in the industrial strategy. It’s an important step toward gaining the sector the recognition that Robertson is so set on.
Neil Robertson is set to speak about ‘Skills requirements in a no build-era’ at the Water & Wastewater Treatment Water Industry Supplier Conference on 26 November.