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Memorandum submitted by the
Sustainable The Sustainable Development Commission 1.
The Sustainable Development Commission is the Government's independent adviser
on sustainable development, reporting to the Prime Minister, the First
Ministers of Scotland and Summary 2.
The Government has stated that the move to a sustainable and low carbon economy
requires 'industrial activism,' including interventions to deliver the skills
required. Without these interventions the Background 3. The Government believes we need to move to a sustainable and low carbon economy and the social returns of such a move are well established: reduced reliance on potentially insecure imported energy resources, reduced carbon emissions, savings from lower fuel bills and the protection and creation of a significant number of relatively high value added jobs in both the long and short term. The Government is also clear that market forces alone will not bring this about: significant 'industrial activism' - and 'skills activism' - is required. 4. We agree that this 'industrial activism' is needed. In our pre-Budget submission 'A Sustainable New Deal' we convened a number of estimates about the job creation potential of a 'green fiscal stimulus' and estimated that an investment of £30bn would create c. 800,000 jobs (mainly in renewables, retrofit, new buildings, other energy efficiency measures and infrastructure improvements)[1]. As Deutsche Bank has argued, 'one of the reasons that the "green sweet spot" is an attractive focus for an economic stimulus is the labour intensity of many of its sectors'[2]. In reality this level of stimulus is now unlikely given the outlook for public spending, however that makes government's role in facilitating and enabling private sector investment all the more important. An important part of that role is the intervention needed to deliver the skills required ('green skills'), whether these are sector specific (eg those needed for 'the Great British Refurb') or useful in all sectors (eg resource management skills). 5. While we believe the Government's overall objectives in this regard are sound, words are not being matched by deeds. As business attendees at a recent Windsor 'summit' made clear, it is time to stop talking and start taking action. Analysis and strategy 6. The following analysis of the 'green skills' problem and its solution is now widely but not universally accepted (NB 'green skills' is used as a shorthand for not only sector specific skills such as those needed for 'the Great British Refurb' but also those skills and capacities that are needed in all sectors, such as resource management and carbon accounting, understanding risk and the precautionary principle, critical thinking and change management. We restate the analysis here as context. 7. Government interventions around the world are creating a market for low carbon goods and services, from the urgent and immediate such as retrofit, or increasing carbon and resource efficiency in industry and the public sector, to those which will become important in the longer term, such as electric cars. To the extent that these interventions send clear and unambiguous signals about the nature of future demand, investment in the relevant goods and services will be strong; to the extent that the signals are ambiguous or weak, investment will be relatively weak. 8. As things stand in the UK, these signals are not reaching industry - and indeed the public sector - as clearly as they could: the Government has set ambitious emissions targets for 2050 and 2020, but there is widespread scepticism, expressed at several seminars and fora for business that we have attended, as to its intentions in the short to medium term that frames most business decisions: will it create either the regulatory and fiscal regime or the government investment programme that will drive the necessary commercial investment in green skills (whether sector specific or useful in all sectors)? So for example potential investors in renewable energy have doubts about the future planning regime and investors in retrofit have doubts about financing plans. Investors in all sectors are uncertain about the future price of carbon or even the Government's commitment to ensuring a carbon price that will really drive change. 9.
In internationally traded sectors the resulting danger for the 10. Our impression is that these dangers are recognised by the government, at least in theory, and that accordingly a three pronged strategy to deal with it is emerging:- 1. The government will ensure signals about future demand are clearer - not just in green industries but across the economy; this is partly a matter of making sure that the range of government interventions - including regulations, incentives, investments, taxes and enabling measures - do indeed add up to a plan that will drive change, and then communicating this. 2. It will take steps to overcome the lack of knowledge, shortage of finance and other barriers which prevent businesses understanding and then acting on these signals, ie prevent them from investing in 'green skills' whether sector specific or useful in all sectors. Many SMEs for example may not appreciate the savings they can make from best practice resource management, and even if they do may not know how to implement this. 3. It will ensure that the skills sector - those who specify and deliver qualifications and training - understands the likely future demand for skills and responds accordingly. For example all National Occupational Standards could and should include a module on sustainability.[3] 11. This strategy, were it implemented, would be entirely coherent. It does not add up to central planning, with BIS attempting to control how many courses in what are conducted where, but active indicative planning combined with a whole series of enabling interventions. The problem is it is not turning into action with the urgency we would expect, given the recession and the imperatives of climate change itself.
The nature of the problem 12. There has been much discussion and consultation, a new machinery (the UKCES, SFA, LSIS)[4] is coming into being, the Low Carbon Industrial Strategy will be published in July, and a green fiscal stimulus was announced in the budget. At the same time the DECC 'Summer Strategy' for meeting the greenhouse gas targets set by the Climate Change Committee, combined with individual departments' sectoral emissions reduction strategies, will start to strengthen the signals sent to industry. Good work is also in hand to identify and showcase best practice. This is all positive. However, any change strategy requires a degree of momentum to turn words into real and significant change - without this, entirely valiant implementation efforts of the kind just referred to make no headway against existing, well established patterns. The requirement for momentum is all the more pressing given the potential scale and speed of the change to a low carbon economy and the complexity of the array of measures being introduced. 13. This momentum can be achieved through a combination of real progress on the long and medium term planning required, clear communication and those quick wins that reassure business the Government really means what it says. Our strong impression, however, is that as yet the well co-ordinated and prioritised programme across government that would achieve these things, and so the necessary momentum, is not in place. 14.
So for example we have been taking part in the Windsor Consultation on low
carbon skills, most recently attending the skills summit with leading employers
held at 15. At the same time, in the discussions we have had and are continuing to have with officials, it has become apparent that the kind of ambitious, momentum building programme we would like to see and which would convince business that government really is acting is unlikely to be implemented, essentially for administrative reasons rather than because of any disagreement as to its value. It just hasn't reached the top of the in-tray. 16. This matters. To take just one example, there is evidence that for retrofitting housing stock, the current levels of investment in skills is insufficient to meet even the existing level of demand, let alone that which will be required to meet the Government's targets, and this shortage will, of course, push up the costs of the programme and make it less comprehensive. [7] Recommendations 17. To put this right three things are needed and needed now: co-ordination, prioritisation and a timetable. 18. Effective co-ordination is important for the whole programme, but particularly to achieve quick wins. The merger of BERR and DIUS into BIS will make co-ordination easier to achieve. We are confident that if the other two ingredients can be secured, effective co-ordination can follow. 19.
Most important, if Ministers want real progress then they need to make crystal
clear to officials that this is a priority. There have been a number of other
pressing issues in the skills area (notably the FE capital budget): it would be
appalling - but entirely typical - if shortage of official time was holding
back the 20. Third and finally, a timetable needs to be set out in a way which will translate ministerial priorities into effective action, and which will allow Ministers to hold officials and the various NDPBs involved to account. This may be partly a matter of creating priorities within the programme, given unavoidable shortages of time and money in the immediate short term, but it is also a matter of setting target dates for the key milestones that will contribute to momentum and working back from those. We accept that the problems are difficult and complex and new, but that is precisely why these rather basic programme management principles need to be applied if we are to avoid drift. 21. Our view is that visible progress can and should be made by three key dates. Autumn 2009, ie the start of a new 'season' and the run up to Copenhagen, January 2010, ie the start of a new decade and the natural follow up to Copenhagen, and Spring 2010, ie the first point at which evidence of real progress could be produced. The following sets out the kind of milestones that should be set now for these dates. The timetable 22. Autumn 2009: BIS and the UKCES should have published a quantified jobs and skills action plan for the next two years, linked to but going beyond the financial support measures announced in the Budget and building on work that has been done inside and beyond government over the last two years. It will address (a) how many people need to be trained in what skills for what jobs in the short term (including both technical skills and more generic skills such as carbon accounting, sustainable procurement and change management which need to be integrated into programmes for the existing workforce), and (b) the actions BIS will take to ensure the signals government is sending about the future are being acted on. It will be communicated actively to the skills sector. 23.
January 2010: BIS and the UKCES should have published estimates of the
size and nature of the markets that government interventions will create. This
will require BIS to have worked with other relevant departments to ensure both
that their measures are sufficiently robust to work as the basis of a signal to
industry and that they are as ambitious as leading edge practice and thinking
in 24. Spring 2010: BIS should have published a report of progress against the Autumn 2009 plan. The skills industry should have developed appropriate revised qualifications, occupational standards, course content and inspection guidance (an on-going process but significant progress should have been made). 25. Our very strong view is that if BIS is to set and maintain a timetable along these lines it will need to work with an external partner able to apply the necessary pressure for momentum building dates. May 2009 [1] Sustainable Development Commission, April 2009 [2] DB 2009 quoted in Sustainable Development Commission op cit. [3] As recommended by the first 'Outcomes Note' arising from the Windsor Consultation, "Skills for Sustainable Future: facing the challenge.' June 2008 [4] [5] Commission on Environmental Markets and Economic Performance [6] [7]ProEnviro, Skills for a Low Carbon and Resource Efficient Economy, 2008 |