Unspent money raised through the government’s Apprenticeship Levy, which last year totalled £1 billion, should be used to top-up employer training for net zero skills, a right of centre thinktank has urged.
In its new report, ‘Qualifying for the race to net zero’, Onward made a swathe of recommendations to overhaul job training in order to facilitate the transition to net zero greenhouse gas emissions.
One of the thinktank’s headline conclusions is that the government should use the Apprenticeship Levy underspend to top-up employer training funding for net zero skills.
This would enable employers to receive match funding from the government to deliver net zero related training, over and above their existing apprenticeship levy pot.
Utility companies have been able to recoup just half of the funds they paid into the Apprenticeship Levy over the past three years, according to research by Energy & Utility Skills, published last week by Utility Week.
The report also recommended the development of a new sets of standards for next zero, pointing out that whilst there are three such benchmarks for golf course maintenance, only one apiece exists for heat pump installers and wind turbine technicians.
It similarly highlighted that there are no apprenticeship standards relating to other potentially key net zero industries like carbon capture technologies and hydrogen fuel cell production.
In general, the report said that apprenticeship and technical education standards are “badly misaligned to the demands of decarbonisation or a zero-carbon economy.”
Onward recommended that the government should instruct the Institute for Apprenticeships and Engineering to convene groups of employers relating to key net zero industries, like heat pump installation, to develop new apprenticeship standards.
These standards could be supported with government funding from the £2.5 billion National Skills Fund, only £375 million of which has so far been allocated.
This would lay down “clear and established” training standards for key roles within the net zero economy at all skill levels, which the report could be updated over time in line with technological changes and demand.
Engaging employers in areas where net zero is likely to generate new staffing demands now could also help to prevent bottlenecks in several years’ time, the report said.
Firms could also be incentivised to retrain employees for new, net zero compatible roles by allowing them to offset such costs against their tax liabilities as they currently do for research and development.
The proposed Green Human Capital Tax Credit should be limited to accredited training levels and training specific for net zero, Onward urged.
The report also said that the government’s interim 2030 targets for reducing emissions means that it cannot rely on private sector employers to fund the necessary training costs.
It said: “There is simply not enough time to wait for it to become profitable for companies to train their own retrofit installers or heat pump engineers.”
Overall, the report said that in order to achieve the transition to net zero, the UK will need “significant numbers” of people trained in high level scientific and engineering qualifications as well as a “sizable workforce” equipped with strong low and medium level technical qualifications, such as retrofit installers.
Of the 1.7 million jobs that Onward predicted could be created in net zero industries by 2030, 1.3 million are in occupations which currently require strong low and medium level technical qualifications that are currently in short supply.
However, the report sayid the shortfalls in both technical and higher education must be remedied.
The report estimated that 3.2 million workers in the UK will need to increase their skill level or retrain in a new qualification to meet the government’s commitment to decarbonise the economy by 2050.
It also said that the regions with the widest skills gaps tend to be those with the greatest exposure to potential job losses due to decarbonisation of the UK.
Ted Christie-Miller, report co-author, said: “At present the UK workforce is woefully prepared for the transition to net zero emissions. If we want people to take advantage of the opportunities of a green economy, and the well-paid green collar jobs it will provide, urgent action is needed to upskill and train people up and down the country.”
Sue Ferns, deputy general secretary of the union Prospect and a member of the Green Jobs Taskforce, said: “This report sets out the scale and urgency of the labour market challenge to ensure a successful and fair transition to net zero across all parts of the UK. It should focus political minds on the need for action now.”