Examination of Witnesses (Questions 360
- 379)
WEDNESDAY 21 MAY 2008
MR CHRIS
ALLAN, MS
LEE HOPLEY
AND MR
IAIN COUCHER
Q360 Chairman: You mentioned earlier
this massive problem there is, particularly for small, innovative
companies, if you like, in this space of actually getting the
resources to take good ideas to market. Does your organisation
actually engage with that? Do you have any suggestions as to how
it can be done better?
Ms Hopley: It is getting business
and universities to talk to each other differently. There is a
lot of expertise out there and business does have good ideas,
but it is the commercialisation skills and getting that idea to
market; it is linking the two. I do not think the skills are not
there, it is how you bring the two together, and it is things
like the innovation vouchers and mini KTPs that will hopefully
make a difference when we see them rolled out next year.
Q361 Chairman: Do innovation vouchers
and KTPs mean anything to you?
Mr Coucher: We have an involvement
with them, but our view really is that we need more engineers,
we need more project managers, we need a lot of highly skilled
people if we are to turn the railway into a very reliable, dependable
rail service. Of our own initiative, we have created one of the
biggest UK apprenticeship schemes and we are working with universities
to give us the skilled graduates coming out. Our need is quite
dramatic and short-term, so our simple solution is to go out there,
recruit, develop and train rather than waiting, for reasons which
are very worthwhile but would not meet our timescales.
Q362 Mr Cawsey: Perhaps I will start
with you, seeing as you have just said that. We have been told,
of course, that there are serious skills shortages and gaps in
the sector. From an employers perspective what precisely are those
problems? Is it an overall shortage? Are there specific gaps?
In which case, in which sectors and what type of roles?
Mr Coucher: From our perspective
the gaps that we face are not the absolute quantity of engineers,
although we would like to see more electrical engineers coming
through because of their anticipated wider role out of the electrification
programme on the railways; so we would like to see more skills
in that. We would like to see much greater diversity in our workforce.
We are suffering, like most employers, in that the types of applicants
we are getting do not reflect society as a whole—so a lot
of male dominated roles—but the skills that we need more
than anything else are in project management and delivery, what
we might call real-life skills in terms of turning theoretical
experience in engineering into deliverables on the ground. That
is an area where we have the biggest skills shortage. If you look
from our perspective, over the next three or four years we need
probably 1200, 1500 new project management type skills.
Q363 Mr Cawsey: Chris, what about
your industry?
Mr Allam: From our perspective,
there are some specific areas that we felt the need to take action
on. One in particular is what we term "systems engineering",
which you know is effectively software and electrical engineering.
We have seen that coming for some time and, if you look at just
the way the industry is going, more and more of those skills will
be needed but particularly a higher level of skill as well; so
it is not just about the numbers game. If you look at the pure
facts and figures for our apprenticeship scheme and our graduates,
we will actually still get the numbers that we need and we will
still get the 300 people a year coming into the apprentice scheme.
We have got about 1,000 apprentices going through all the time.
The numbers are still there. What we are looking at is: will that
continue and can we get the right skill levels in there? In particular,
the area of systems engineering is one, and we have formed some
strategic partnerships with Loughborough University, for example,
to try and deal with those and, as Iain said, to try and take
action, which helps us fulfil our own needs, but that is really
just sorting out our problem rather than sorting out a more general
problem. Can I come back and think about SMEs that we talked about
before. We put about two billion pounds into the supply chain,
so a lot of the money that goes through into the supply chain
and SMEs are a key part of that, and we do find it fragile in
terms of when SMEs are there or they are not. One of the things
I do think we have got wrong is this idea that only somebody working
in a garage can have a good idea. I think that is fundamentally
wrong. If you look at big business, the ability to have great
ideas and to take them through to fruition is absolutely fundamental,
and that is something that smaller businesses really struggle
to do because they just have not got the size you need to turn
a great idea into a good innovation. It is that difference between
what is a good idea and a great innovation that you can then do
something with. I think something that needs to be looked at as
part of this is: yes, you can create that supply chain of getting
good ideas out of SMEs into big industries, or you can support
big industries creating their own good ideas, which is one of
the ways we have gone about it, again, linking through to universities.
Q364 Mr Cawsey: Lee, you have heard
what the two guys from the business say. Is that something you
are hearing from the Federation as well about the shortages and
the gaps?
Ms Hopley: Yes. Again, our survey
suggests that all sectors and parts of the country are having
difficulty recruiting sufficient numbers of engineers. Lack of
sufficient numbers of applicants is quite often the problem. It
is very varied across the industry in terms of the specific engineering
disciplines that are in short supply, but I think it is probably
fair to say that there is not an over supply in any engineering
discipline. I think we have started to see in recent years a return
to the apprenticeship scheme by more companies that was abandoned
eight or nine years ago. They have actually returned and are trying
to grow the skills of their company that way. That is a positive
sign, but it is going to come back to ensuring that you have got
the young people coming through the education system who are already
aware of the opportunities that an apprenticeship can offer and
have the appropriate qualifications in order to do an engineering
apprenticeship, because clearly it is quite stretching.
Q365 Mr Cawsey: Would you say that
your industries are coping at the moment? Is it something down
the line or is it real, in your face, now, and if it is now, how
badly are your companies being adversely affected by the shortages?
Mr Coucher: We are okay today.
We are expecting to see significant investment in the railways
and very large complicated infrastructure projects which require
a lot more skills. So our skills shortage in that area will become
acute in two or three years', and we do, of course, compete for
very big infrastructure projects such as Crossrail and the Olympics,
so we fight amongst that, which drives cost into the business.
The other thing that we are facing as an industry, as we move
towards providing a rail service that is open longer into the
night and that starts early in morning and at weekends and, of
course, at bank holidays, is that we are driving people to work
anti-social hours—so into mid-week nights—and people
have choices and we are seeing it difficult to recruit people
who are prepared to work in an anti-social environment. So that
will be a challenge for Network Rail, the industry and, of course,
the UK in the coming years.
Mr Allam: We see some real hotspots
now. We are okay at the moment, but there are some hotspots. I
think nuclear is one that you are particularly going to look at.
I would just mention that nuclear is a particular problem area
generally. What we see coming is a problem that is going to hit
us in the three to five-year period. So if we are looking at the
supply chain coming through, looking at the quality of students,
the people choosing to do degrees, then what tends to happen is,
whilst we might push more people towards degrees, that tends to
hurt us in terms of our apprentice intake, and there is a very
small pool that are actually working in this engineering area.
What we are looking at is the quality of people as they come through
the education system. Our business is getting more and more demanding,
competition is getting harder and harder. We need the best people
in engineering, not just the numbers through engineering, and
so we need that whole system to work for us.
Q366 Mr Cawsey: In an earlier session
of this inquiry we were looking at all of the engineering demands
that are coming down the line for the UK, including for Network
Rail, and talking about the shortages that we are likely to have
in the future. One of the points that was put to us was that this
was a matter for the market and actually, if there are shortages,
the market will self-correct and in the end it will all resolve
itself. Is that an attitude that we should be taking or do you
look to the Government, or is it not your industry's responsibility
to ensure that you are getting people through the door to keep
yourselves viable for the future?
Mr Allam: It is definitely the
responsibility of industry to play a part in ensuring that our
business works, that this is one of the mechanisms that makes
our business work, and there is no way we will back away from
that. However, just to rely on market forces does not necessarily
seem the best way to protect one of the best assets of the UK
in terms of driving our economy. Just to rely on market forces
does not seem the best way forward. What we are looking at in
that (and I think your point is a very good one) is what is our
national strategy towards engineering, what are the things that
we are good at and are we going to stay good at? What are the
things that maybe we do not want to do any more? What are the
areas in which we want to train and develop our people and, therefore,
connect together, effectively, the output of engineering back
to the start of engineering and make that work together? Whereas
at the moment there is a feeling that it is not really connected
in terms of do we really see defence and aerospace as still being
important in the future or is it really about railways or something
else, and, therefore our engineering pull gets more focused on
what the output is going to be; but that is a big picture and
it is long-term. It is not even the three to five, it is the ten-year
picture.
Mr Coucher: It is not an either/or,
is it? The market place has certainly got a role to play in driving
it forward, and I think the market has been particularly poor
in promoting the value and the excitement you get working in engineering
and construction industries. There are plenty of people going
to university to study engineering, but where do they go when
they come out? Do they go into financial services? Do they go
overseas? Do they go to consultancies? We have got to try and
track them from our perspective—this is Network Rail talking—to
come and work for Network Rail, so we have to make Network Rail
an attractive place for people to want to come and work, and that
is a role for the market place, I believe. We have got to get
out there and promote what we do amongst young people so they
want to go university to study engineering and, when they come
out, there is going to be work in places like Network Rail or
BAE Systems or Rolls Royce, and stuff like that. It is very much
a market responsibility to do that, and any help we can get from
government, of course, is welcome.
Q367 Mr Cawsey: Lee.
Ms Hopley: Yes, it will take the
market a long time to solve the problem, and then it kind of assumes
that there is not a market failure, if you like, because all the
actors in this do not have access to good information, young people,
careers advance and guidance. Do they really understand what giving
up science at 16 actually means for their future career? Once
you have done with it, it is difficult to return to. You are assuming
that everyone in the market has access to good information, and
I do not think they do.
Q368 Mr Cawsey: Both BAE and Network
Rail have graduate schemes, so we understand. I wonder whether
you might like to tell us something about the quality of the graduates
that are coming out of the universities. Are their skills matching
the requirements that you have for your business? What about (back
to Phil's point) ensuring that graduates will have the skills
that you will need not just now but in ten years' time? What is
your experience of all of that?
Mr Coucher: I can tell you where
we started, when the Network Rail acquired Railtrack five or six
years ago, and when we looked at the intake for graduates then
it was 25: 15 management graduates, ten engineers. This year we
will take on 120 engineers and a similar number of management
graduates. I would like to double that again. That would be about
the level that I think we can cope with going forwards. The quality
is good and improves year on year as graduates feedback, people
talk to their counterparts back at university and they sell it
so we are getting really good quality graduates, and this year
we have started a trial—it is more than a trial because
it is the first two universities of five that we want to do—where
we enter into a specific arrangement with the university—UCL
and Warwick first—where we will take people out of the MBSC
courses or BEng courses. We will then sponsor a year's project
management skills course. They finish that with an MSc and then
they come straight to the work place. So we actually sponsor their
first year of an MSc course. It gives them an MSc in our skills
and our techniques. We will do that and, we believe, when we get
the whole system running for five universities aligned to our
work for jobs around the country, we will generate around 200
new project managers coming into the industry. We generally believe
that we need to keep our pool of engineers and project managers
replenished and growing, because nobody else is going to do it
for us. The quality is good. It is our responsibility to make
Network Rail more attractive than other companies out there.
Mr Allam: We have got a very well-established
graduate development framework. Our take on this, our job, is
to attract people into our business by offering them the opportunity
to develop, to continue to both train and offer a stable and lucrative
career in the business. What we try and do, therefore, is structure
a training programme and ensure that there is a level stability
in that. What we try to do is keep a constant level of graduates
coming in. We recruit about 200 graduates every year, and we are
consistently doing that. Literally, just at the moment, is probably
the first time we have started to struggle in terms of getting
in the right level of both quality and quantity. We have to be
careful about who we select in that, but, generally, we do get
good graduates coming in with good relevant degrees. What we try
to do is to work closely with the universities to ensure that
is the case, but over the last five years we have tailored some
specific courses that really focus on achieving the needs of BAE
Systems, and we do see it as our responsibility to work with the
universities to do that. We set about that programme and we intend
to keep going on it. What we do see, though, is that as our demands
get higher and higher the level that we need gets harder and harder
to achieve. We do see that supply chain is starting to collapse
on us at the moment.
Q369 Chairman: Lee, very briefly,
before I bring Dr Gibson in, when I came to see the Engineering
Employers Federation recently one of the issues that we did not
discuss was how, in fact, you represent the economic significance
of engineering, because that is crucially important. I wonder
if the Federation has actually thought around that problem.
Mr Allam: Representing?
Q370 Chairman: Representing the significance
of engineering and its economic impact. I think that in order
to actually portray engineering both here and within Parliament
and for the purposes of our report and also to actually give it
greater prominence, how do we put values on it? How do we put
economic values on it? Is anybody doing that work—can you
point us in a direction—to get that work? You will think
about it?
Mr Allam: Yes, I would rather
do that.
Chairman: All right.
Q371 Dr Gibson: Are apprenticeship
schemes really worth all the effort you have to put in, or are
you just doing it because the Government gives you money to promote
the idea? What do you feel about them really?
Mr Coucher: I am extremely positive
about it. We started our scheme three years ago. We take 250 people
a year, so we have got 750 young apprentices coming through. They
are engaged with the right attitude and the right skills and we
genuinely believe that they will become the leaders of our industry
in the future. It is a way to a cultural change programme that
addresses some of our age-old institutions out there. We would
have done this if the Government made no contribution because
it is absolutely the right thing. It costs us roughly £56,000
to get an apprentice to be fully qualified. They tend to stay
in industry. We do get a large amount of retention because of
the workplace system that we have got, so they provide a long-term
pay-bank. Just by way of example, this year we were over-subscribed
for places tenfold; so we had 3,000 applications for 250 places.
Q372 Dr Gibson: How about BAE's experience?
Mr Allam: Exactly the same. It
is absolutely fundamental, the apprentice scheme. We have been
running it for an awfully long time. Again, it is a three-year
scheme. We take in 300 places a year, so we have got roughly 1,000
people on the apprentice scheme at any one time. It is very important
in terms of getting that skilled level of resource into the business,
getting it trained effectively to work within the business and
comfortable with, if you like, the non-academic side of operating
within big business. The key to us and the thing we measure coming
out is what is our completion rate? Does everybody just disappear
because they are not interested? We have got around an 85 per
cent completion rate on our apprentice scheme, and that is a big
test for us that says, yes, this is working. We have also been
asked recently to do some best practice work, so last month we
did a best practice workshop. It is just coming in, but this is
how we go about it.
Q373 Dr Gibson: You say you would
have done it without the Government funding too?
Mr Allam: The Government funding
helps, absolutely.
Q374 Dr Gibson: I am going to take
it away from you: governments do that. Then what do you do?
Mr Allam: I think we would do
it anyway. You need to supply resource into any business and,
therefore, an apprentice scheme and training is the right way
of doing it, and we are not going to get that level of skill.
We could not work in our business in any other way, apart from
to help support the training ourselves.
Q375 Dr Gibson: So it would not matter
if the Government changed its public funding arrangements: you
would still go ahead with it and you would run with it whatever
it was?
Mr Allam: It would matter, because,
obviously, the funding is an important part of it and we believe
it is important that the Government supports engineering, so we
get an economic benefit out at the end. What we would question
is: what is your driver for doing that? What are you trying to
tell us about engineering? But it is important too that we supply
resource into our system and to keep doing it; so almost irrespective
of where the company has been and the business has been, we are
consistently taking on apprentices.
Q376 Dr Gibson: How would you like
the funding of these skills to be arranged? You have said some
aggressive things about the Learning and Skills Council.
Mr Coucher: We did say some stuff
about the Learning and Skills Council. Our principal concern actually
is some of the funding of apprenticeship schemes, because it is
primarily aimed at 16 and 17 year olds, and we are starting to
see apprentices coming through who, for whatever reason, whether
they have stayed on at school or done further study, want to go
back and do apprentice schemes, but, of course, the funding drops
off quite dramatically once you are over 18[1],
so we would like to be able to use the same funding.
Q377 Dr Gibson: When you think about
the Learning and Skills Council, do you still feel the same? You
are semi-smiling.
Mr Coucher: No, there are parts
of it, because of the way in which we are funded—we are
not a professional learning organisation, we do not commercially
train people, and yet we are treated just as any other organisation—there
is quite a lot of bureaucracy that goes around with that. It is
quite labour intensive to collect all the information necessary
to award some of our qualification certifications and, of course,
we are now subject to a full Ofsted type assessment as well, even
though we are not necessarily doing this to give vocational qualifications.
So there is an imposition of bureaucracy; I wonder whether it
is all absolutely necessary in what we do.
Q378 Dr Gibson: Which parts of it
are too bureaucratic?
Mr Coucher: The basis that we
are assessed like any other learning institution. I appreciate
that we have got to make sure that we have got appropriate qualified
people who are training and stuff, but there is quite a lot of
administrative overload caused by the fact that we have to maintain
standards imposed by Ofsted and the Learning and Skills Council.
Q379 Dr Gibson: Two per cent of engineering
apprentices are female, four per cent from ethnic minority backgrounds.
What are you going to do about that? What are you doing about
it?
Mr Allam: One of the things we
are trying to do is to attract people into that generally. We
have just set up, effectively, a schools road show. Effectively
what we do is take a road show, which is very informative, quite
light-hearted and entertaining, about what it is like to be engineer
and we have taken that into all schools. We are ensuring that
we do cover all schools: girls' schools, areas where there are
ethnic minorities, and ensure that they get the right level of
coverage.
1 Note from the witness: "This figure
be 19" Back
|
