Supplementary memorandum from Department
for Business, Innovation and Skills and the Department of Energy
and Climate Change
Further to the appearance of Kevin Brennan (BIS)
and David Kidney (DECC) before the Environmental Audit Committee
on 3 November 2009, this memorandum provides supplementary information
in response to follow-up questions from the Committee together
with additional information as agreed by the ministers.
RESPONSE TO
THE FOLLOW-UP
QUESTIONS FOR
MINISTERS
1. Reducing emissions is not seen as a strategic
priority for many organisations, and many businesses and public
sector organisations do not yet understand how they need to change.
What skills are needed at a board level to help ensure a smooth
transition to a low carbon economy? What can Government do to
develop these skills and greener thinking at board level?
Embedding low carbon and resource efficiency
as a strategic priority for businesses and other organisations
is one of the key challenges in delivering a low carbon economy.
Most organisations acknowledge that climate
change will have some impact on their activities. However, the
extent and scope of this is often not fully understood or quantified.
The actions that organisations need to take
to reduce their emissions include:
— First, reducing resource/energy costs
and environmental impacts of the organisation and working with
supply chains to reduce overall emissions through improved resource
efficiency—for example by auditing waste, energy use and
other sources of emissions to establish a baseline, and implementing
an action plan to improve efficiency and reduce costs.
— Second, embedding low carbon as a strategic
priority across the organisation—for example by working
with supply chains to reduce overall emissions, and reviewing
business activity and long-term strategy to embed the development
of low carbon products and services in long-term business models.
The government is taking a number of steps to
stimulate development of appropriate skills, and prioritisation
of low carbon as a strategic issue for organisations. The UK Low
Carbon Transition Plan sets out the UK's long-term policy framework
to enable the transition to a low carbon economy. This provides
the clarity organisations need to embed carbon reduction in their
business strategy. The Transition Plan was supported by the Low
Carbon Industrial Strategy, which sets out in detail how the UK
will make the transition to a low carbon future, and how the barriers
to UK businesses taking action on climate change will be addressed.
The Transition Plan sets out a number of policies
specifically designed to help businesses embed low carbon as a
strategic issue, and to incentivise energy and resource efficiency.
In particular, the CRC Energy Efficiency scheme, which enters
into force in 2010, will stimulate improved energy efficiency
in large business and public sector organisations which are responsible
for around 10% of UK emissions. Improved energy efficiency will
contribute to our carbon objectives, and ensure our security of
supply and also help our economy.
The Government funds the Carbon Trust to provide
a range of support to help businesses understand the opportunities
and risks of climate change, and to embed low carbon as a strategic
priority.
The Carbon Trust's activities are a key element
of the range of existing resources to help businesses address
their resource efficiency, including:
— support available through the government's
Solutions for Business portfolio of publicly-funded business support,
including that provided by the Carbon Trust and WRAP; and
— support and tools provided by external
organisations such as the Prince's Mayday Network, convened by
Business in the Community and the Carbon Disclosure Project (CDP)
Supply Chain which works with 45 global corporations to help them
engage with their suppliers on climate change issues.
Furthermore, as part of implementing the Low
Carbon Industrial Strategy, the Government, working alongside
Tomorrow's Company and other businesses, has set out action that
company boards need to take. "Can You Afford Not To?"
(Tomorrow's Company, in partnership with HMG, 4 November 2009)
is the business case for action on low carbon and wider resource
efficiency. It reflects on evidence from consultations with leading
edge employers that resource efficiency language can be more resonant
at Board level, and can be an important step on a longer and more
difficult low carbon journey.
To reinforce this message, Lord Mandelson, Hilary
Benn and Ed Miliband have also written to the CEOs of several
leading companies asking them to work with their supply chains
to reduce emissions.
Recent OECD work on sustainable manufacturing
and eco-innovation emphasises the importance of generic skills
in the promotion of sustainable development at senior business
levels, as well as the technical skills required for "end
of pipe" technological solutions. We are currently reviewing
the initial sustainable manufacturing toolkit with technical experts
and will be looking to use the toolkit to support businesses in
measuring their environmental impact and identifying areas where
they can reduce this in the most efficient and cost-effective
way.
2. Finding money to pay for new training
is difficult. When investing in training and apprentices employers
are taking on a certain level of risk. What are you doing to reduce
this risk?
The Government recognises that some businesses
are facing difficult times. Through Train to Gain, in England
employers can get advice about how to best use training to increase
the productivity of their business. In many cases the Government
carries the full financial cost of training for Skills for Life
and Level 2 training, and contributes towards other training such
as courses at level 3 or on leadership and management. Government
meets the full cost of training for apprentices aged 16-18 and
we make a significant contribution to the cost of adult Apprenticeships.
We expect Apprenticeships funding in England to reach £1
billion this year up by almost a quarter since 2007-08.
Investment in training is particularly a risk
for SMEs which is why on 21 October we announced funds of £7
million to support new Group Training models of Apprenticeship
delivery which will focus- investment that has the potential to
deliver up to 15,000 new places within the next three years. SMEs
will benefit from these new models of employing and training apprentices
by pooling the cost and providing employers with more flexible
ways of using apprentices within their workforce.
Part of the mitigation of this risk is to ensure
that training offered is high quality, up-to-date and is designed
to meet a specific employer's needs. This is the rationale for
employer-led National Skills Academies (NSAs), which work with
networks of specialist training providers to meet the skills needs
in their sector. NSAs assure the best training providers in their
sectors, using quality criteria such as the Training Quality Standard.
To achieve the standard, a training provider must demonstrate
the responsiveness of their skills solutions, as well as their
impact on the business bottom line.
3. What funding has been provided or allocated
by Government to develop skills in the nuclear energy industry
over the past year and in forthcoming years?
In 2009-10 LSC has provided NSA for Nuclear
with £504,431 revenue funding, with a balance funding of
£834,442 to be paid over 2009-10 and 2010-11.
In 2009-10, LSC has also provided NSA for Nuclear
with £855,137 for capital funding for the Energus Centre
in Cumbria, with a balance of £285,930 to be paid over 2009-10
and 2010-11.
In addition, the NSA has submitted further applications
to LSC for capital funding for the South West Energy Skills Centre
(£2.25 million) and Springfields Training, in Preston, (£110,000),
which were approved on 2 November. These are now at contracting
stage.
The Department for Business, Innovation and
Skills and the Department for Energy and Climate Change both contributed
£5,000 in 2009-10 to Cogent, the Sector Skills Council for
the nuclear sector, as a contribution towards the "Renaissance
Nuclear Skills" research project on skills for the nuclear
new build, due for publication shortly.
Detailed LSC expenditure on Train to Gain for
the Nuclear Sector is not available, although LSC funding for
Train to Gain provision within the "footprint" of Cogent,
the Sector Skills Council for Chemicals, Nuclear and Oil and Gas
industries was £4.14 million in 2007-08, the latest full
year for which data is available. This is a significant increase
on the year before.
Sector compacts have been agreed between BIS,
the LSC and the Sector Skills Councils, drawing down Train to
Gain funding. The compact with Cogent, which includes the Nuclear
sector, was agreed in October 2008 for a total value of £50m
over three years. However, we will be reviewing the content and
delivery of existing compacts to ensure synergy with the National
Skills Strategy, Skills for Growth.
The Nuclear Decommissioning Authority also has
a budget of 43.5 million between 2006-2011 to fund its skills
and capability plan.
In addition, some of the Regional Development
Agencies are providing funding to support programmes to develop
skills in the nuclear energy industry in their respective region.
3. What funding has been provided by
the Government to develop skills in the renewable energy industry
over the same period?
Exact levels of funding for renewable energy
skills are difficult to quantify. While there are courses in further
and higher education aimed at renewable energy, there is a lack
of robust information to tell us how many trainees subsequently
go into renewable energy jobs, nor how many who study more general
subjects, such as mechanical engineering, also enter the renewables
sector. Moreover, most energy companies do not differentiate their
training, using common programmes for renewable and conventional
energy. Training funded directly by the Devolved Administrations
is difficult to quantify for similar reasons.
We are taking action to address this issue.
Over the next 12 months, DECC will provide £150k in funding
to enable the Sector Skills Council, Energy and Utility Skills
to lead a groups of SSCs in a UK-wide review of skills and training
provision for renewable energy, including occupational standards,
qualifications and accredited training. This will form the foundation
on which a skills strategy can be developed and implemented much
more quickly than if left to market forces. It will also provide
a baseline on which we can develop metrics for funding, trainee
numbers and destinations.
The British Wind Energy Association has an employer-led
skills strategy group, which has already made important steps
in developing apprentice frameworks. The first trainees are expected
to start in September 2010.
We expect to launch the National Skills Academy
for Power in the new year. Subject to approval of its business
plan, this will receive in the region of £4.8 to £5.8
million of public funding over its first three years (match funded
by employers). Many of the people trained under the Academy will
be working to support the deployment of renewable energy.
In England, Train to Gain funding can be used
to support apprentice training and conversion training for those
with transferrable skills up to Level 3. However, we believe that
expenditure to date on renewable energy has been relatively modest,
reflecting a low demand from employers.
4. What discussions has the Cabinet Sub-Committee
on Environment and Energy (ED EE) had on the "green jobs"
issue?
Information relating to the proceedings of Cabinet
Committees, including when and how often they meet, is generally
not disclosed as to do so could harm the frankness and candour
of internal discussion.
5. Which organisations have been consulted
with in developing the "green skills" aspects of the
new UK Skills Strategy?
Over the last 18 months BIS has consulted widely
with stakeholders in this sector in order to develop the Department's
work on low carbon. The outcomes from these events have contributed
to the Low Carbon Industrial Strategy and to Skills for Growth.
CONSULTATION EVENTS
ON SKILLS:
— LSC Stakeholder Reference Group consultations
2008 and 2009;
— Windsor consultations 2008 and 2009;
— SoS Summit—Strategic Advisory Group
2009; and
— SoS Low Carbon Economy launch 2009.
ATTENDING ORGANISATIONS
(CONSULTATION EVENTS)
— 12 Universities, FE Colleges and other
educational bodies;
— 10 Sector Skills Councils (SSCs) and
Industrial training Boards (ITBs);
— five Government Departments; and
— nine Voluntary, Trade, Expert and other
bodies.
A full list of organisations and attendees is
available if required.
6. How have the Renewable Energy Skills group
contributed to the new skills strategy?
Officials have been keeping in touch with the
work of this group with interest, attending meetings and providing
strategic advice about linking its work to wider low carbon skills
developments, including the Low Carbon Economic Areas and Energy
Efficiency work being taken forward by other stakeholders. BIS
is strongly supportive of this work which brings eight sector
bodies together on a voluntary basis, under the leadership of
Energy and Utility Skills, to coordinate a number of related work
strands. DECC is funding a review of occupational standards, qualifications
and accredited training to identify the gaps in provision and
set the foundation for developing training pathways for individuals
and employers. The National Skills Strategy: Skills for Growth;
refers to the work of the Renewable Energy Skills Group as a case
study example of good practice. Going forward it is hoped that
this sector body `cluster' will become the focal point for monitoring
all related renewable energy skills projects, including those
being taken forward at a regional level.
ADDITIONAL INFORMATION
AS AGREED
AT THE
EVIDENCE SESSION
ON 3 NOVEMBER:
A. Does the Green Ministers network still
exist?
Key departments across Whitehall have a Minister
with responsibility for Sustainable Development and/or Climate
Change.
B. What is the closing date for applications
to CESP?
CESP is a three year programme from 1 September
2009 to December 2012. There is no formal application process
and projects can be developed and delivered across the whole period.
Energy companies and local authorities (LAs) will deliver CESP
by developing partnerships to benefit local communities in designated
areas across GB. Early signs are that some LAs are approaching
energy companies with proposals for CESP projects in their respective
areas, while some energy companies are drawing on existing relationships
they already have with LA partners.
24 November 2009
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