Examination of Witnesses (Quesitons 204-247)
MR FRANK
CORRIGAN
15 JULY 2009
Q204 Chairman: Good morning Mr Corrigan.
Welcome to our evidence session this morning on skills in a green
economy. Your area of expertise relates to the skills and the
development of the infrastructure of training and skills in an
emerging green economy. We are very grateful to you for providing
evidence to us this morning. Would you identify yourself for the
record please?
Mr Corrigan: I am Frank Corrigan.
I am the Director of Strategy for Energy and Utility Skills. Energy
and Utility Skills is a sector skills council with a responsibility
for gas, power, water and waste management.
Q205 Chairman: Thank you. Do you
think we have in the UK a sufficient skills base to actually implement
any green stimulus that is forthcoming?
Mr Corrigan: No. If you talk to
employers and if you look at the research, the challenges in front
of us are actually immense. If you look at the ageing workforce
that already exists in the power industry and if you look at the
needs that they are going to have increasingly over the next three
sets of five year periods, the needs for skills grows in each
of those periods. That is against the backdrop of a poor sector
attractiveness; it is against the backdrop of demographic change.
That is going to have a significant impact on our ability to deliver
the low carbon economy opportunity. If we do not look at those
in a combined way we will not be able to deliver the skills that
are needed for both sectors. At this point in time there is not
the coordination in the country to pull these things together
in a planned fashion to make them work effectively. This is a
concern to employers, which is why they are putting so much time,
effort and their own money into trying to find solutions for this
mounting problem.
Q206 Chairman: Do you think that
the lack of skills that you have identified is something that
cannot be made up by people transferring existing skills fairly
seamlessly from present technologies and applying them to new
emerging green technologies and therefore, as it were, making
up the skills gap as they go? Or do you think there are specific
areas where that is not possible to envisage and if you think
that is the case, what are the specific areas?
Mr Corrigan: I think your analysis
is exactly right. The skills that are going to be needed here
are going to be in large measure a re-mixing of existing capabilities
into a different structure to be able to deliver what we need.
My concern is that the places that are going to provide the easily
transferable skills are already facing major challenges in replacing
their own skills infrastructure and therefore if we do not work
in a coordinated fashion then the places that the low carbon economy
might pinch them from are already suffering and therefore the
existing power structure and its networks and the newer areas
will hurt if we do not work in a coordinated fashion to deliver
those skills.
Q207 Chairman: Is it your view that
if we do not undertake further developments in specific green
skills that particular areas of green technology and green energy
development will simply not happen, or will they perhaps be undertaken
by other means by, for example, importing skills from abroad or
exporting the processes?
Mr Corrigan: Where there is a
will there is a way and we will always find a way through it.
We have undertaken some research as part of our preparation of
a business plan for a national skills academy for power. The evidence
that comes from that indicates that a lot of the training in this
area is done overseas because the facilities do not exist in this
country or they are arranged locally rather than put together
in a sensible fashion. The risk is that that will continue so
you will find a way through to make this happen but you will not
make the most of it for either the industry itself or for the
country as a whole. There is an opportunity here that could easily
go begging.
Q208 Chairman: Would it be your view
that in terms of what has been termed the green stimulus greater
emphasis perhaps needs to be placed on skills training as part
of that stimulus package itself as opposed to the stimulus on
technology itself or its implementation?
Mr Corrigan: I believe that what
you say is exactly what needs to happen. Let me give you an example.
You know probably as much as I do about smart metering and you
know that the government has announced that smart metering is
a programme that we are going to implement in this country. What
it means is that every day we are going to have to install 20,000
meters for a 10 year period. If you go and talk to other parts
of government their targets and their priorities are focussed
in different ways. The ways of getting those skills in large measure
is by upskilling people who already have a number of those skills
to give the complete set of skills. If you go and say to the Learning
and Skills Council, for example, that we think that would be something
very suitable for Train to Gain to deliver they will say, "Does
it deliver my objectives, which is a level two or a level three?"
It does not because what you are doing is adding a little bit
of skills to make that possible. Therefore as a sector we get
caught with the priorities of other organisations that do not
fit this agenda. In an ideal world we would upskill those people
and then create new jobs behind them by bringing the replacement
people in in an organised fashion, but those things have got to
be looked at from the priorities of this sector and not always
from the priorities that other departments have set.
Q209 Colin Challen: We have just
completed a report on the oil and gas industry and I think it
is a common assumption that the engineering skills and so on in
those sectors that we have already might be applicable to renewable
technologies. Who is actually going to make the decision to retrain
those people? The oil and gas sector may not feel any responsibility
at all to start training people in renewable technologies so how
will that transition, if it does take place, actually happen?
Mr Corrigan: It is definitely
an opportunity. The research that I referred to earlier indicated
that in fact the returns to individuals working in the oil and
gas industry were more lucrative than were likely to appear in
the renewables industry in the first instance and therefore the
attractiveness was going to be difficult. To my mind if you are
willing to make these things happen then you will pull together
the training provision in a coordinated fashion so that people
can find the right level of skills that are available across the
country for them to make those personal choices. At the moment
things tend to be done in too fragmented a fashion so that if
you are part of a north of Scotland initiative it will look different
from a north-east of England initiative rather than meeting something
that the employers need. If that can be done in a coordinated
fashion—national skills academies are one of the ways of
doing it, there are many others—then we could begin to put
the mechanisms in place that allow people to make those choices.
I believe that is a more economically efficient way of doing it.
Q210 Chairman: You have particularly
highlighted in your written evidence to the Committee the low
priority that you claim that government departments have given
to developing a collaborative approach to skills. What do you
think is needed to overcome this?
Mr Corrigan: In an ideal world
a little bit of help. I work for a lowly skills council; I get
direct funding of £1.7 million a year so I do not have any
money, I do not have any economic influence, I do not have any
political power to make things happen. If you look at our submission
you will see that we have worked very hard to pull together a
collaboration amongst sector skills councils to move this forward.
With the National Skills Academy for Power we have pulled together
a collaboration of 14 large and medium sized companies in the
power sector who have invested their own money to make these things
happen. A little bit of support and a little bit of help to make
those collaborations deliver would go a long way. For example,
part of my submission was to suggest that if you look at the Energy
Network Strategy Group they are looking ahead at the technology
needs of our industries. If you want the skills issues to be addressed
you want to make sure that the skills issues are discussed at
that point in time and that pre-planning is done so that the skills
issues get resolved as the technology and the economic issues
are resolved so that there are solutions on the ground for early
adopters to move forward quickly rather than leave the skills
groups to follow up.
Chairman: Let us look at skills strategy
in a little more depth. Charles Hendry?
Q211 Charles Hendry: Can you tell
us how you think the National Skills Academy for Power would work
because it does look an incredibly fragmented, complicated picture
at the moment? We have a whole range of organisations; we have
the Power Sector Skills Strategy Group, the Renewable Energy Skills
Group, AssetSkills, Cogent, ConstructionSkills, EU Skills (I suggest
you change your name because a lot of people might not want to
follow you just because you have "EU" in there), SEMTA,
SummitSkills and a whole range of others. How do you feel that
those can be brought together into a cohesive organisation? How
then would you work alongside the National Skills Academy for
Nuclear which is clearly in that same low carbon space?
Mr Corrigan: It seems to me that
you have a number of sector skills councils who have an interest
in this. We have a significant part of that but we do not own
the total responsibility for it. We have pulled together a collaboration
amongst all those groups to pool our research information first
and we have funding from DECC to allow us to do that. However,
research is not where we want to be; what we actually want to
do is move the process forward. For those groups the renewable
activity is a small part on the side of their business and that
needs some financial support to take it from the research phase
into the doing phase. That is really quite important. The national
skills academies are a network for taking the kind of planning
and the qualifications work and the employer engagement work and
delivering it on the ground through colleges, through universities
and through employers' training facilities. The National Skills
Academy for Power will focus on the power side of it and the renewables
part of that power side and will work—and does work already—closely
with NSAN (which is the National Skills Academy for Nuclear) and
with other national skills academies and other bodies who have
facilities. For example, the ECITB is in that consortium; they
have a large influence on delivering skills and they will be part
of that collaboration. What we want to do, instead of having the
visibility of a lot of individual players falling over each other
in this area, is focus it so that we have a single point of contact
to make these things happen. If you go back to the involvement
with the research side there is no way that the ENSG would want
to have eight SSCs in their meeting, but if you had a group you
could send one person and make that link work.
Q212 Charles Hendry: You talked about
having a little bit of support and you said some financial support;
can you quantify that for us? My sense at the moment is that government
is looking at how it gives less support into different organisations
rather than how it gives more financial support. What would be
the consequence on the work that you are trying to do if there
were to be reductions in budgets and would that make it much more
difficult for the UK to achieve its potential in these areas?
Mr Corrigan: We are already seeing
that. In putting together a business plan for the National Skills
Academy for Power our employers have been exhorted to be ambitious
and look at the issues. They have developed a business plan over
a year that is ambitious in meeting the big skills needs that
it has. Indeed, it is currently facing a push back from the Learning
and Skills Council who say that whatever was in your expression
of interest a year ago is as much as you can get. We therefore
end up with this really great dilemma between whether this is
an important issue for the country that needs developing and will
it add real value, or how do you live with the cuts? My suggestion
to you is that a fragmented approach costs you more because you
are ending up doing less effectively in 25 different places what
could be done in one and therefore my proposition is that putting
a little bit of money behind a collaboration is a cost effective
investment for government.
Q213 Charles Hendry: Does it then
mean that you might be in a situation of having to try and pick
winners in the different technologies and the different skills
base which will be required, for example carbon capture and storage,
some renewables, some energy efficiencies and smart metering?
Would you have to say, "Right, smart metering we know has
to happen; it has to happen by 2020 and therefore that is a given"
and you put more emphasis on that? Then some of the other technologies
which are emerging and are perhaps slightly further away you do
not do so much in those areas. Would you be forced to make those
sorts of strategic decisions?
Mr Corrigan: I would be very reluctant
to say that because from my point of view, where I sit you should
be planning today for the skills needs that you are going to want
to implement in two or three years' time because otherwise you
will always be chasing your tail and never delivering effectively.
If you focus the funding that is available on encouraging the
early adopters to drive forward change then you will get a far
better success rate from that early implementation, drawing other
people through. In many ways it is really important that you look
to the future and not look to yesterday's problems.
Q214 Sir Robert Smith: I have two
questions on the funding. There are four nations involved in providing
a pot of funding, how do you rank the four nations at the moment
in terms of their awareness of the problem and interest in being
part of the solution?
Mr Corrigan: We try to work with
four nations and nine regions. The industry looks at itself as
a national one and if you are not careful you end up cutting it
down to such small bits that our employers scratch their heads
and say, "I don't know how to handle this; it does not make
any sense". We have worked very successfully with the Scottish
Government who have done a lot of work already in the research.
They are taking on secondment one of our senior people from Scotland
into their team to help drive this agenda forward. What they see
in Scotland is the power of that collaboration amongst people
and they want to help us drive that forward by doing that. Inevitably
you need to take everybody with you and that means that we spend
a lot of our time just trying to bring those collaborations together.
Collaboration is a hard thing to develop and it takes a lot of
patience, time and openness but you can see from our submission
that in a number of areas we are beginning to put together quite
powerful collaborations.
Q215 Sir Robert Smith: Earlier on
Collin Challen raised the point about the skills in the oil and
gas industry and obviously hope for some transfer there, but also
have you had any dealings with OPITO, the oil and gas university,
where of course the funding there has come from the industry itself?
Is there any cross-over where the industry collectively in the
power sector could actually see some benefit in mutual funding?
Mr Corrigan: If you look at the
list of people who are in that renewable collaboration it includes
Cogent and Cogent and OPITO are very close together. That collaboration
is specifically on renewables because it covers a broad range
of skills. What you will find is that there is behind that an
energy alliance between Cogent, ECITB and ourselves and that collaboration
is both to try to make sure that government hears one voice from
employers but also that employers hear one voice from government.
It is very easy, if you have multiple bodies, for them to use
slightly different language and it confuses employers immensely.
Those collaborations are there and are getting stronger month
by month. As we drive forward into doing real things it will get
stronger again.
Q216 Sir Robert Smith: I suppose
the advantage OPITO has is that it is a very focussed industry
and the players in there are tightly enough bound together already
that it was easier to get industry funding perhaps. For what you
are trying to achieve there is a need for a government role because
of the long term strategic benefits of the country.
Mr Corrigan: Let me not leave
you with the impression that our employers are mean with their
own contributions to this. I said earlier that as a sector skills
council we get £1.7 billion core funding. That is matched
by income that comes from our employers so employers are very
definitely up for the challenge and want to take it forward. The
increase in scope of work that I mentioned earlier insofar as
the National Skills Academy for Power is matched by an increased
investment from the employers because they see the challenge that
is there. I think the difference between the oil and gas side
and the power side—although Cogent would probably disagree—is
that it is easier to pull together a small number of very large
companies but when you get into the supply chain and when you
get into the sub-contractors who work for those, particularly
in this area where you get into the innovators, you end up dealing
with very small companies. We do have some experience of that.
Engaging with small companies is time consuming; it gives you
very real benefits but it is an expensive operation. Usually,
when government departments look at skills issues, they do not
wish to make the investment to make the SME side of the investment
work. I do not believe in this area that you can get away with
that.
Q217 Dr Turner: How are you getting
around the obvious problem of matching the timing of producing
people with the right skills—it does not happen overnight—with
the availability of jobs? Are you convinced that there is sufficient
pull out there to attract people to go into training knowing that
there are attractive jobs in the industry for them to go to? Are
all those things in place and, if not, how are you going to get
them in place?
Mr Corrigan: They are definitely
not all in place, that is for certain. The thrust of what you
are saying is absolutely critical to us. There is no point in
putting together programmes that do not deliver real jobs for
real people. What we have done in the power sector—which
is our part of the collaboration—is that we have worked
with our power companies to say to them that if they look at the
people they employ, they will know what their wastage factors
are on a year by year basis, and they know when those people are
going to retire. Therefore they have an idea over a 15 year period
of where their manpower needs are going to be. We have invested
quite heavily in quite sophisticate workforce planning models
which helps them do that thinking. If you think you are going
to lose Fred in two years' time and he has 10 years' experience
you are already too late to replace him, so you are going to need
to upskill internally and begin to do the planning over a long
period of time that tells companies where their issues are. The
strength of that is that if you then add them all up you get a
far better research base of knowledge about what the skills needs
actually are on a regional and national basis. Also you begin
to identify some of the issues that at a company level are not
quite understood. When you ask employers where they are going
to get these people from they will say that they will upskill
a certain number from within, they will take a number of apprentices
or graduates on and develop them and they will attract a certain
number from the open market. However, when you aggregate this
appointment of already skills nationally, the numbers are so large
that they create an additional challenge of a significant size.
By doing that work in a practical sense you begin to get the knowledge
about where the jobs are and where replacements are needed and
that allows you to talk intelligently to the economic regulator.
It also means that you begin to have the modelling information
to say that if we are going to go for this aspect of smart networking,
where are the skills and what needs to be upskilled and you begin
to have the modelling capability to actually identify where those
skills are. From that solid base you can begin to do what you
were challenging; you can begin to put together real knowledge
about real jobs and make sure they get delivered. If the demand
does not come through you know that the problem is just building
up for next year and the year after and you can begin to make
an influence and have an impact on that.
Q218 Dr Turner: How are you going
to deal with the SMEs in this picture? You referred to the fact,
quite correctly, that most of the innovative stuff is being done
by small to very small companies which might suddenly grow. How
are you going to fit them into the picture?
Mr Corrigan: They are the hardest
group because they are very time intensive and they require special
care. In many ways the easiest way is by using something like
a national skills academy because if you can put together industry
standard training packages and then tweak that national availability
of training capacity to the needs of SMEs and use both the supply
chain and Train to Gain and any other facility you have to get
out to those SMEs you will make life easier for them because what
you offer them are a series of solutions on a plate. When they
are not right—which they will not be the first time around—if
you listen and modify and tinker them and get them right then
gradually you will meet their needs directly. In all these things
success breed success.
Chairman: Can we move now to the specific
policies that may be required as far as plugging the skills gap
is concerned. Colin?
Q219 Colin Challen: You state to
us that "Skills shortages are already apparent" and
I wonder if it is possible to put into numerical terms what is
the current shortfall of these skilled workers is and what are
the reasons for those particular shortages.
Mr Corrigan: You have put me on
the spot and I would not be able to give you a decent answer.
However, I will give you what I have easily to hand. We have put
together a consortium; we have got some funding from DECC; we
are going to do that research and we will get you an answer. However,
if you look at just the traditional power side of the business,
if you look at the needs of distribution, generation and metering
in the power industry in the next five years the industry is going
to need to bring on board 13,000 new people. In the five year
regulatory period after that they are going to have to bring on
16,000 new people. In the regulatory period following that we
are going to need to bring on 18,000 new people. What that means
is that over the 15 year period we are likely to have to replace
90% of the existing workforce because it is an ageing workforce.
The problem that we have now is only going to get more and more
difficult as the time goes on. It is not answering your question
which is a bit unfortunate, but it sets the scene because if that
industry is not able to deliver those skills then the drift into
the renewable sector will be a good deal harder to achieve.
Q220 Colin Challen: Today we have
the Renewable Energy Strategy launched; are you hopeful
that there will be any significant announcements related to that
which addresses the skills problem?
Mr Corrigan: I would love to see
that naturally.
Q221 Colin Challen: Have you been
consulted in the preparation or did you make a submission during
the consultation period?
Mr Corrigan: We are talking regularly
to the department yes, but we shall have to see what comes out
of it.
Q222 Colin Challen: Do they recognise
the problems that you have told them about?
Mr Corrigan: I do believe they
do, yes. However, it is interesting that what I am saying to you
is not unusual. The Council for Science and Technology reported
last month on "A National Infrastructure for the 21st Century"
and it said in its Summary, "The national infrastructure
needs a skilled workforce and the responsibility for championing
and developing a skilled workforce must be shared by business
and Government." In its Recommendation seven the chapter
on skills says, "The Sector Skills Councils, working with
business, BIS and professional bodies urgently need to address
the short-term gaps in the skills market and provide clear forecasts
of the skills needed in the longer-term, and how these can be
met." I think that what I am saying to you is beginning to
be a commonly held view. The question is really how we can make
it happen.
Q223 Colin Challen: I have to say
that I am not really an expert in these matters, but with the
mess surrounding colleges, Capital Programme, the LSC being disbanded
or some of its functions being given back to local authorities
and so on, I just cannot see how this national infrastructure
is going to emerge. We just seem to be in this quagmire of changing
priorities all the time.
Mr Corrigan: That is a subject
that the employers in the industries I serve have difficulty in
understanding. What they see is a national issue and they wish
to address it on a national scale but as often as not, when it
comes to implementing it, they get pushed away from national solutions
down to more regional solutions and that national imperative gets
weakened.
Q224 Colin Challen: Is it something
that the industry looks to government to lead or does the industry
itself believe it should lead in the creation of this national
infrastructure? As you know, the government has tended in the
past to allow the market to decide where the skills are required
and it seems to me that that is always going to be a bit of a
catch up process.
Mr Corrigan: I believe that where
the employers are now they understand the gravity of what faces
them over the next 10 to 15 years and expect to be able to collaborate
with government on making it happen. That is why what I just quoted
fits exactly with what I hear from employers. They are willing
to put their time, they are willing to put their enthusiasm, they
are willing to put their money into this, they are willing to
put their facilities into this, but to make it work it needs collaboration
from government at a national and devolved nations level.
Q225 Colin Challen: Are there some
international lessons that can be learned from our competitors
abroad? Germany has a declared industrial strategy, for example,
developing photovoltaic electricity and has created something
like 300,000 jobs in the renewables sector. What lessons could
we learn from people like that or others in the European Union?
Mr Corrigan: What you are talking
about is the way that technologies have been supported in their
implementation. They have a head start on us therefore have more
training facilities in place and the evidence says that that is
where our British employers are going to train their people.
Q226 Colin Challen: When you say
training facilities, are these paid for by companies or jointly
between companies and government or largely by the government?
Mr Corrigan: Within other countries
I cannot comment, I do not know the details. However, the evidence
from our research says that renewable companies, when they want
to train people specifically in the renewable area, tend to send
their people overseas because the training facilities have a head
start on us, are focussed and deliver what the employers want.
We have to catch up with that.
Q227 Mike Weir: Just to come back
to a point Des was making about the SMEs, when we had evidence
from the Energy Saving Trust we heard that there was a difficulty
at a local level, particularly in micro-renewables, in getting
qualified local electricians and other people to fit these. Given
that the government's Renewables Strategy is almost certain to
look to more micro-renewables, feed-in tariffs and things of that
nature, how do we get skills down to a very local level to enable
people to have these? A national skills academy may not be of
great benefit to the one or two man operations all tied into the
north of Scotland?
Mr Corrigan: I understand the
problem because within our footprint we have the gas utilisation
sector so therefore one of the groups we work with are the people
who are on what is now called the Gas Safe register (which used
to be called Corgi). We have worked and delivered welfare to work
programmes, for example, with micro-businesses from that sector.
We believe that in fact there is a huge opportunity there because
you have on those sort of registers knowledge about who the employers
are, who they employ, what skills they have already and therefore
it provides you with a solid base for encouraging those small
companies, if you put the right sort of funding behind it, to
upskill to be able to meet those requirements. If you do it in
a planned fashion you will find out from those 120,000 people
who the early adopters are from the skills development side and
you can encourage and work with them to strengthen their capability
and make them the stronger part of that network of micro-businesses.
I believe it is eminently do-able and in fact I believe it is
really important that we do do it, but it does take more time,
more energy and more effort to deliver than to persuade a larger
company to take an equivalent number of people on.
Q228 Mike Weir: You talked about
the difficulties in the college sector. At least in Scotland many
apprentices do part of their time at a local college. I just wonder
how you see the interface, if you like, between the local colleges
providing that apprenticeship training and national skills academies
and the possibility of using local colleges to provide that training
to apprenticeships and established small businesses.
Mr Corrigan: The National Skills
Academy for Power will be a virtual operation. There are three
main thrusts in the first part of its plan that will help. One
is that we have captured the knowledge about what employers need
and can make that available both by region and by level of skill
(level two all the way up to PhD) so that we are beginning to
put the knowledge and information available to help create a genuine
market so that training providers at whatever level can begin
to understand what the market needs and begin to create a genuine
market to deliver that. That is the first thing. The second thing
that we need to work on is the whole area of sector attractiveness
because to the majority of the public the power sector is something
that delivers when you switch the light on but they do not understand
what goes on behind it, what the career opportunities are, what
the job satisfactions are. They have a view of a dirty industry
so we need to do something about changing that so the colleges
can attract the right kinds of people. Finally, if we are in a
position to pull together the best brains in partnership from
both the training providers and the employers to work out what
the training programme should look like in bringing in both existing
core capabilities and developing the new areas that are going
to come along, then what we can begin to do is provide template
training materials for colleges to deliver against. That saves
the training provider the job that is often a relatively thankless
job, it delivers a uniformity of quality or a greater chance of
uniformity of quality and innovation across the whole of the country
and at the same time allows you to be innovative in the way you
mix the time that is spent in employers' premises learning skills
and the time you spend in colleges. For me the whole idea behind
the National Skills Academy for Power is to create a genuine partnership
between training providers and the industry to drive this whole
agenda forward. To be fair to Scotland, Scotland are strong supporters
of the National Skills Academy for Power.
Q229 Chairman: Turning to the question
of investment in the skilled workforce we have been talking about
and investing in the changes in available skills, do you think
it is a valid criticism of perhaps the renewable and new green
technologies industry that there are calls for government to invest
in all this skills training and development? Should we not just
say that you are going to benefit greatly, apparently, from the
developments in green technologies and renewable energy technologies,
stump up the investment yourselves.
Mr Corrigan: Let me step back
and give you a bit of personal information. I lived overseas for
three years working on a power project in another part of the
world. I lived in a society where the water supply was not available
24 hours a day and where the electricity supply was not secure.
The challenge that faces us as a country is to make sure that
the lights stay on, clean water is there and the dirty water is
taken away. If we do not invest in that infrastructure it will
have a major debilitating impact on the way our society develops
in the future. That is the downside. The upside is that there
is a huge opportunity here for us as a country to take a lead
in this area and to develop the skills of what is going to be
a very large industry around the world. Instead of following,
if we are in a position to lead there is a huge opportunity for
this country. Looking at my own family, that is an opportunity
I would like to see us take up. The real answer to your question
is that there are times when, in bringing in change, government
can pump prime and help things happen and there are times when
large employers will quite happily pay for what they need. When
you talk about the SMEs their job is considerably harder and they
do not have the resources, ability, training departments or knowledge
to make these things happen. A little bit of support goes a long
way.
Q230 Chairman: Do you think there
are particular effects and impacts currently even on a wider basis
for the larger companies of the downturn in demand and therefore
a knock-on effect so far as considerations of longer term investment
are concerned? How might that affect your view, as you have said,
of priming the pump of investment for the future?
Mr Corrigan: I think there are
whole parts of the industry that are feeling that pinch and are
taking a deep breath before making decisions and they are finding
some of those investment decisions not easy to make and I understand
that. However, what I have seen of the power industry over the
last three or four years says that there is an industry here that
knows just how steep the challenge ahead is and knows that they
cannot delay because the issues are too big.
Q231 Chairman: Are there particular
areas within that overall picture that you have identified or
can identify which should particularly be prioritised in terms
of that kind of pump priming investment? If you had to say here
are three or four areas that particularly need that investment
right now in order to move us forward and seize those opportunities
you have mentioned, which sort of areas would they be?
Mr Corrigan: It depends which
purpose you are after. If what you want to do is to make sure
that skills are developing the long term need then for me where
you would focus your investment is in making the collaboration
among sector skills councils work, giving them a little bit of
resource to develop a mixture of qualifications, working out the
problem of how you use two or three different awarding bodies
to deliver a different mix of qualifications and consulting with
the various training providers around the country to build solutions
and processes that will deliver in the medium term. What I would
do is open up to some representative from the sector skills side
into the longer term thinking because I would put the infrastructure
in place and I would make the network of national skills academies
deliver for you. If, however, what you are actually talking about
are how you improve the employment capability in this area, then
I would say to you that my understanding of the industry at the
moment is that if you ask employers to take new people on at this
point in time it is more difficult, but if you wish to plan for
an improvement in the economy and the recovery you would plan
now for the training programmes that will meet their needs as
the economy begins to improve. I have to tell you that when we
ran Ambition Energy we ran a 26 week training programme because
we wanted people that had a reasonable level of skills. This industry
needs higher level skills than people in JobcentrePlus. If you
wish to move volumes of people you train people to go into shops
and into low level jobs. In this sector you have to train and
invest more heavily in higher level skills for people who are
going to take on careers.
Q232 Sir Robert Smith: Do you think
the market has maybe been slow to respond in a way because they
have not had clear enough signals from the government that there
will be a low carbon demand in this country? Until they can be
confident of the roll out of low carbon technologies they are
not going to invest in the UK supplier.
Mr Corrigan: There is bound to
be some of that, but in reality what is needed is something that
takes the aspirations into something which will be delivered and
seen on the ground. It is creating that sort of infrastructure
that will allow us to move forward more quickly. At this point
in time, for many employers, it just looks too difficult a job
to do and I do not believe that is the case.
Q233 Sir Robert Smith: In your answers
you have mentioned that quite a few of the organisations you work
with are working in an area of regulated business.
Mr Corrigan: Yes.
Q234 Sir Robert Smith: How alive or effective
are the regulators in ensuring that that regulated environment
is not holding back or, even more so, is driving forward the reality
that those industries need to invest in their skills?
Mr Corrigan: If you think about
where I am coming from, I need to persuade people; the regulator
just needs to look in an area and people jump. The power of the
regulator is quite significant. Having said that, the workforce
planning modelling work that I was telling you about before was
largely done so that the industry was in a position to say to
the regulator, "We have a problem and investment in skills
is something that you should allow". As they worked through
the numbers they were quite shocked at both the magnitude of the
problem but also how it grows over not the next five year regulatory
period but beyond. Individually as companies they have gone to
the regulator and the regulator has listened to them. I believe
that the regulator is doing some useful work in this area without
a shadow of a doubt because it is on the agenda; it is what the
distribution companies are talking to the economic regulator about.
As I say, I need to cajole people; the regulator can just look
and things can happen, so I recognise the power that the regulator
has.
Q235 Sir Robert Smith: As long as
the regulator is looking.
Mr Corrigan: Yes.
Chairman: Can we now move to the question
of attracting and retaining a diverse workforce in the low carbon
technologies sector? Mike?
Q236 Mike Weir: In your memorandum
you say that no renewables specific apprenticeships currently
exist. Can you tell us what actions are required to encourage
a larger intake of young people in the low carbon technologies
industry? Is there sufficient work for specific low carbon apprenticeships
at the moment?
Mr Corrigan: It often sounds to
me a bit like the chicken and egg. If there are apprenticeships
available that have been designed by employers for employers then
if that is available employers will take people from there. The
people looking at careers in the industry will say that that has
industry backing and therefore if they go and do that apprenticeship
they can get a job locally but also anywhere else in the country
because it is recognised. To a certain extent making those things
happen actually encourages employers meeting up with aspirant
employees and developing and pushing forward this whole training
issue.
Q237 Mike Weir: How do you see your
focus? Do you see yourself as upskilling the existing workforce
to work in the new technologies or do you yourself providing skills
for new entrants into these technologies?
Mr Corrigan: Without a shadow
of a doubt we need to do both. The nature of the problem is so
extensive that one solution will not fit all and the demographics
say that there will be fewer people coming out of school in the
future so therefore you are going to have to be much cleverer
in the way you attract people into the industry and you will take
them from a variety of sources. It is creating those pathways
and making sure that you look after the interests of the individuals
because they are not just a locally agreed arrangement between
an employer and a college but have a national standing. To do
that effectively I have to pull together eight bodies. It is by
no means impossible; in fact it is absolutely essential. The power
industry is traditionally a white male bastion of employment and
the tremendous thing about the renewables sector is that it is
very attractive to women in particular and that allows us to change
the demographics not only over the renewable sector but over the
broader power sector because, as a bunch of employers, they need
to attract from the whole of the population of the country and
not just the traditional areas that they have in the past. There
is a huge opportunity there.
Q238 Mike Weir: That is very interesting
because speaking to one power country they were talking about
graduates and the number of graduates coming forward and the bulk
of them wanted to go to the renewables sector rather than the
traditional sector because it was seen as sexy. Is that something
you find fairly widespread?
Mr Corrigan: Our research says
that that is a common perception and therefore something to be
used because there is a benefit to be had by it.
Q239 Mike Weir: Is there a mirror
image to that of an emerging workforce within the power industry
that may lead to problems down the line in existing power generation
rather than renewables? Do you not have to get the balance right?
Mr Corrigan: Absolutely. What
the employers have done is to come together and researched how
the public, how the career advisors, how the parents perceive
the power industry. From that they have decided that that is an
issue that they need to address. Therefore one of the increases
in scope that they have put into the National Skills Academy for
Power in the last year is to do some significant work on making
the sector more attractive, not as individual companies but as
a whole industry. When employers begin to come together to think
like that, that is a hugely powerful driver that you really want
to encourage. You asked questions about the willingness of employers
to invest, when they are willing to invest not only in the needs
of their particular company but can see there is a value from
collaborating on an industry basis, you see just how strategic
the skills issue is to our employers.
Q240 Mike Weir: The industry is very
diverse. There is a big difference perhaps between wind generation
for power, coal or whatever. There is clearly a difference in
the way people perceive the various types of energy generation.
Is the industry being successful in promoting energy generation
as opposed to specific parts of it?
Mr Corrigan: At this point in
time it is clear that the industry is not successful at all in
promoting the whole sector. You can do that in part by developing
the renewables side or if you can do it simply by explaining to
people what opportunities there are because the industry that
the research says people see and the industry that I see are two
totally different career opportunities.
Q241 Mike Weir: You have talked about
diversity of workforce and I was very encouraged to hear what
you said about that. Do you think there is anything government
can do to promote increasing diversity, perhaps through public
procurement or from industries that demonstrate a greater diversity
in working practice?
Mr Corrigan: The answer is always
yes. Let me give you an anecdote. Four or five years ago we ran
the welfare to work programme called Ambition Energy and one of
the things we tested was the idea of training lone parents to
go and work as gas installers. You may say that is common sense
because the majority of people who open the door that they knock
on is the lady of the house but the person who is on the other
side is usually a man. We developed a programme and we needed
to be sure that they would be employed. We chose an area of London
and we went to the local housing department. The local housing
department said they could help. They did not use the contracts
with their contractors who worked in the area, they simply brought
them in and said, "We would like you to listen to this presentation
and please be aware that when contracts are renewed we will take
into account how well you have performed in supporting this programme".
There was not a formal contract; there was not a formal directive,
it was just an individual saying, "Please note, I am watching"
but it was very, very powerful. If I have to do those sorts of
things I have to deploy people to talk to 400 local authorities
but they are the type of thing that government can say, out of
the 400 local authorities I need 40 who will do this for us to
begin to have those sorts of changes. Therefore government has
a great influence because it is a buyer and it can do it in subtle
or unsubtle ways. This is real social change. What I loved about
that was that after the lone parents had been out working not
only did they enjoy it but the customers liked them and then the
customers rang up and asked for the lady engineer, and then the
employers came back and said, "We need more of them"
and you kind of think, "Oh good, that was not quite as difficult
as you might have imagined". A little bit of creativity and
sense of fun works.
Chairman: You have mentioned one very
interesting training delivery mechanism, shall we say. Perhaps
we can turn to the wider aspect of delivery mechanisms and particularly
thinking about the small and medium enterprises that we have been
talking about a little earlier. Robert?
Q242 Sir Robert Smith: You have mentioned
the difficulties for the SMEs and in your submission you talked
about learning from the successful Scottish construction skills
model and the problems of the Train to Gain initiative.
Mr Corrigan: I very carefully
did not say the "problems"; I said the more "problematic".
If I can explain the difference in approach which is where devolved
nations and working with them can be tremendous, what the Scottish
Government said was that they wanted to encourage the development
of construction skills within their area and they were willing
to set some funds aside. We will give you some ground rules as
to how to apply them but you go out to your employers, identify
what the skills needs are, prioritise them and if we are comfortable
with them you then go and make them happen. What we were in a
position to do was to go to employers, understand their skills
needs and work with them and local training providers to meet
those needs to their priorities. They were not targeted on the
fact that it has to be so many level twos and so many level three
(NVQs/SNVQs); it was what employers wanted. My example is smart
metering. Installing 20,000[1]
meters a day for the next 10 years requires a whole range of upskilling
of people. If Train to Gain could take that as a remit you could
go out to the 120,000 individuals who are on the Gas Safe register
and say, "There is this big job opportunity coming up; there
is some funding to help you upskill it and these are the programmes
you can go and take" and that would give that whole process
a main momentum. If, in the process, you were able to actually
work behind the scenes to deliver the back filling opportunity
you have created not only the skills to do the new bit but you
have supported the skills that are needed, providing employment,
et cetera, et cetera. Interestingly enough you have
also identified who the early adopters are so next time there
is a major technology change you go to them first. There is a
structure that can be built. Train to Gain is delivered through
intermediaries therefore we cannot be in that position; because
it is focussed on delivering level twos or level threes we were
told that smart metering would not be a priority. I understand
where the government department is coming from because it has
a set of targets, but I have the difficulty of then going back
to the employers and saying, "Can't do it" and they
say, "Why?" The intermediary tries to make that dialogue
work.
Q243 Sir Robert Smith: In the rules of
Train to Gain they tick boxes to make sure that public money is
being carefully used. Would there be a way of getting a level
two or level three on the incremental training or should they
try and alter the bureaucracy?
Mr Corrigan: At the end of the
day for me, if you give the employer the skills they want to do
the job they will come back and they will do more of it therefore
I am less worried about whether it hits a qualification and more
whether it does the job. Employers are not interested in qualifications;
they are interested in skills. It is not how many GCSEs or how
many PhDs have you got, it is can you do the job that I have in
front of me. I am more inclined to that end then necessarily ticking
the boxes.
Q244 Sir Robert Smith: If you do
not have a bit of paper with a specific qualification, do you
have some kind of authentication that you have the skills?
Mr Corrigan: I do not wish to
throw money at training for the sake of training either. I want
somebody who comes out with a set of skills that are recognised
across the industry. I do not want to send somebody on a three
week course because that does not help man nor beast. That individual
I also need to look after so that when they have been through
that training, if that employer does not suit them they are in
a position to go and work for another employer but still deploy
those skills. You have to look after both needs. It is a matter
of policy priorities. If you really wanted to drive forward in
this agenda one of the things I would suggest you might consider
is having a small group—a small task force—that met
periodically just to understand the difficulties of different
priorities of different departments and help overcome them. Those
sorts of things have been really quite successful in the past
in driving change so that would be another of my suggestions.
Q245 Colin Challen: A lot of the
new technologies, renewables and low carbon technologies will
be developed by small companies and perhaps coming out of a cottage
industry. SMEs sometimes puts a bit of a corporate gloss on the
idea, but a lot of these companies are cottage industries. How
can we deliver the best training for them that meets their needs?
Some of the larger companies can meet their own training needs
probably from within their own resource, but do our mechanisms
at the moment in delivering training actually deliver for the
cottage industry end of the scale?
Mr Corrigan: No, not in a coordinated
fashion. The evidence says that the smaller company will develop
people on the job so they will learn by doing rather than learn
in any systemic fashion. For most of us that is how we learn many
of our life skills. However, it does not get you there in the
quickest fashion. The problem with SMEs is that you have to have
people who can listen to them attentively, put things in place
and revise them as they work or they do not work. You have to
do it with a bunch of people who do not have the time to deliver
training; they do not have the time to talk to their local FE
college; they do not have the time to really spend the amount
of effort that a training department for a larger company can
operate. One of the successes that we had with the Ambition Energy
welfare to work plan was because we set ourselves out as the project
manager to provide the glue for employers that would not look
after the things that the larger company has a training department
for. We had a project manager who ran those projects and did those
things for the SMEs, but that makes it an expensive programme.
We would argue that the evidence from that programme says it delivered
tremendous value and delivered a good return for the financial
purse, but dealing with SMEs effectively is a more labour intensive
and more expensive option. However, I do not believe it is something
you can ignore because, as you say, for a whole number of industries
they are some of the growth companies of the future.
Q246 Colin Challen: Is Train to Gain
of value to the smallest companies, do you think, or is it not
bespoke enough to deliver value?
Mr Corrigan: Our experience within
our sector is that the penetration of Train to Gain is very poor.
That is true of the large companies; it is especially true of
the smaller companies. There are ways of making these things work,
it just needs the will. It does need the time and effort to listen
to what employers want and develop the capabilities to meet those
needs. The importance of listening is that you have to listen
to a large number of SMEs before you understand properly the patterns
that are evolving because one company's need will sound very different
from another company's needs. You have to spend the time talking
to these people to understand what their real needs are and how
best to support them. I believe that that is part of our future
in this area.
Q247 Chairman: Mr Corrigan, you have
given us an hour of your time and a wide ranging and useful series
of contributions and answers to questions on what is clearly going
to be a very important element of consideration in the future
low carbon technology economy. We are very grateful for your time
this morning. Thank you.
Mr Corrigan: Thank you for the
opportunity; it has been more enjoyable than I feared!
1 Note from the witness: "Should read
25,000" Back
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