Green Jobs and Skills - Environmental Audit Committee Contents

4  Skills for the Transition

52)  The Commission on Environmental Markets and Economic Performance (CEMEP) was established by the UK Government in the light of the Stern Review to make detailed proposals to ensure the UK is in the best possible position to seize the new opportunities of the low-carbon economy. The final report from the Commission was published on 19 November 2007. In it CEMEP noted that one in three firms in the environmental sector was being hampered by a shortage of skilled staff, from those needed to install new technology to scientists and engineers.

53)  In response to the CEMEP report on 1 May 2008 the Government published Building a low carbon economy: unlocking innovation and skills.[43] This set out how the Government plans to reduce the skills gap. The Sustainable Development Commission noted that at the Windsor Consultation on low-carbon skills (an event held with leading employers at Windsor Castle on 18-19 May 2009) there was little sense of government progress or action on the CEMEP recommendations and there was no sign of clear accountability or ownership. They note that business participants at the event felt frustrated.[44]

54)  The Aldersgate Group expressed concerns about skills restricting low-carbon growth. CEMEP Commissioner Frances O'Grady, Deputy General Secretary at TUC, (when interviewed by the Aldersgate Group) stated:

There have been genuine steps forward in terms of developing a vision and identifying skill requirements both now and in five to ten years down the line. But there needs to be more certainty. Renewable companies will not scale up unless they can be sure the workforce will have the expertise to deliver.[45]

55)  Since then Government has published the Low Carbon Industrial Strategy in which it committed itself to work proactively with industry to ensure that skills gaps are filled before they become a barrier to job creation or business growth. We recognise that some progress is now being made. Low Carbon Economic Areas (LCEAs) have been established as part of the Government's Low Carbon Industrial Strategy. Skills Demonstration Projects are being developed in these to support the demonstration and commercialisation of new technologies.

56)  On 11 November the Government published Skills for Growth, a national strategy for skills delivery.[46] This aims to give businesses more power to shape skills training through programmes like Train to Gain. In addition it will actively target those sectors and markets on which future growth and jobs depend. Sectors chosen for this increased support include advanced manufacturing, engineering construction and low-carbon energy. In April 2010 the Skills Funding Agency will be set up to assess demand and divert skills funding into these sectors. The Strategy states £100 million of funding will be provided to fund 160,000 training places in priority sectors. For the Government's new strategy to be effective it must deal with four problems with the current skills system:

(1)  encouraging employer participation by simplifying the skills framework;

(2)  establishing a leader to take the green skills agenda forward;

(3)  targeting the skills shortages in sectors needed to drive the transition to a low-carbon economy; and

(4)  forecasting those skills that will be required in new and emerging sectors.

A Simpler Skills System

57)  Skills provision for the UK economy is currently divided between 25 industry-led Sector Skills Councils (SSCs), working within a skills policy framework that is the preserve of the Learning and Skills Council (LSC) in England (and other bodies in Scotland, Wales and Northern Ireland). The SSCs are directed by employers' needs and changes in the national skills curriculum are triggered when employers perceive a need—it is a demand-led system. National Occupational Standards are written by SSCs and define the individual qualifications (S/NVQs) awarded by bodies such as City & Guilds and Edexcel. These S/NVQ courses are taught at further education colleges and, for apprentices, through work based training.

58)  The provision of green skills under this is difficult for a number of reasons. From outside, the training landscape and funding structure is too complex for effective engagement with all the stakeholders. Sector Skills Councils tell us that employers are confused in terms of funding available, how to obtain the funding and routes to training.[47] There is a need to remove bureaucracy and simplify funding mechanisms so that employers better understand the options available. This situation is more difficult, for UK-wide employers, where the funding structure differs across the devolved nations. Employers and Sector Skills Organisations are faced with multiple stakeholders and the frequent need, especially in the regions, to pursue the same initiative many times over, often with different results.[48]

59)  In the Skills for Growth strategy the Government recognised that complexities in the skills delivery framework deterred employer's engagement. It set out a wide range of measures to simplify the system including a pledge to remove over 30 publicly funded skills bodies over the next three years, plans to reduce the number of Sector Skills Councils and the abolishment of Regional Skills Partnerships and a transfer of their powers to RDAs.

60)  We welcome the Government's attempts to simplify the skills delivery system, although this must be done in a way that does not lose the focus on existing environmental skills. This simplification will only be meaningful if it encourages business engagement. EU Skills argued that it was essential that skills delivery continues to be led through discourse with industry. For this to happen employers must be provided with a clear understanding of what is required of them during the low-carbon transition. The Government must put employer participation at the heart of its changes to the skills system.

A Green Skills Leader

61)  We were told of examples of conflicting targets within the skills system and misalignment with external policies. Energy and Utility Skills (the Sector Skills Council for energy, waste and water industries) raised the example of smart metering: the Government has announced it intends to mandate smart meters for all households, with a timetable for completion by the end of 2020, and this will involve changing 23,000 meters per week for the next eight years. The workforce does not presently have the skills to do this, but delivering training to provide these skills does not fit with the current targets or the qualifications that the LSC and RDAs are directed to achieve.[49]

62)  There is little evidence of ownership of the low-carbon skills agenda within the skills system. CEMEP envisaged a leadership role for the UK Commission on Employment and Skills (UKCES), the body set up to see that employment and skills systems contribute to the highest levels of productivity. The Government has since decided that other priorities, such as the simplification of the entire skills system, should take precedence and it would not be desirable to divert effort from the core mission of UKCES.[50]

63)  The SDC noted that at the Windsor Consultation the feeling was UKCES would be the appropriate body to lead this agenda leadership role, but since then the Commission has said it has not got the capacity to be involved in this and in fact does not participate in the meetings on that subject.

64)  Across the skills framework there are good examples of co-ordination. A number of Sector Skills Councils have convened to form the Renewable Energy Skills Group, which comprises AssetSkills, Cogent, ConstructionSkills, ECITB, Energy and Utility Skills, Lantra, SEMTA and SummitSkills. The group has been set up to provide a forum for co-ordinating a Renewable Energy Skills Strategy. Their proposed Renewable Energy Skills Strategy aims to take account of the requirements across the supply chain from initial research, to installation and maintenance and disposal at the end of life. Such an approach needs to be broadened to include all industries.[51]

65)  The delivery of green skills needs to be reviewed across the skills system so that processes and skills bodies are able to deliver green skills as a priority. Leadership is required to take an overview of green skills delivery and remove existing barriers. This is particularly important to respond to a part of the economy that is very fast moving and requires a flexible here and now response. The Government must establish a leader for the green skills agenda to deliver the skills needed for the low-carbon transition, to coordinate on removing barriers in the current system and to maintain a focus on the current environmental skills.

A Targeted Approach

66)  The demand-led skills framework has failed for two reasons; the employer's inability to articulate their skills needs to the skills delivery bodies and the inability of skills bodies to accurately forecast where demand for new skills will emerge. A targeted skills approach will need to solve both these problems. Research commissioned by Defra has found demand for environmental skills "is not being articulated by many employers and as a result the current 'demand-led' skills delivery framework is ill equipped to anticipate and respond".[52]

67)  The TUC argues for the urgent development of an active skills strategy.[53] They believe the current level of skills training capacity is inadequate to meet the needs of a low-carbon, resource-efficient economy. Furthermore they say that relying on the market to identify skills gaps is causing delays in moving towards a green economy. The SDC told us that there is a lack of appropriate demand for some of the skills that are required for the low-carbon transition:

[…]whether they are technical skills, the stem skills, whether they are carbon accounting, procurement, construction, the "Great British Refurb"—it is widely recognised we do not have the skills provision we should have and that something should be done about it.[54]

68)  A more strategic approach to skills supply is needed, which specifically targets the delivery of skills in those sectors highlighted by the Committee on Climate Change and the Low Carbon Industrial Strategy as being important in the low-carbon transition. In its role to assess demand and prioritise sectors for extra funding, the new Skills Funding Agency must take account of the need to develop skills in sectors recognised as vital in the low-carbon transition.

Skills Forecasting

69)  In the Low Carbon Industrial Strategy the Government announced that it will do more to forecast and identify skills needed in low-carbon industries. It would do this by developing a capacity to collect skills intelligence in key sectors with employers, Sector Skills councils and the UK Commission for Employment and Skills (UKCES). This is now being taken forward in the new Skills Strategy, as part of which UKCES will produce an annual National Strategic Skills Audit. The first of these is to be published in 2010 and will involve the Sector Skills Councils and Regional Development Agencies. The Skills Strategy makes clear that skills to adapt to climate change are of strategic importance.

70)  ConstructionSkills has already set up a specialist Future Skills Unit to make sure the industry has the training and qualifications it needs. Skills audits should build on the best practice and lessons learned from current forecasting programmes.[55]

71)  The skills needed for the transition to a low-carbon economy must be part of the first skills audit. It should take as its starting point recommendations of the Committee on Climate Change report to Parliament and identify what skills are required to meet their recommendations and to what extent the workforce already has these skills. The results of this audit should form the basis of the strategic investment for targeted skills delivery under the Skills Funding Agency.

72)  The skills audit should also consider the long-term affects of job displacement and determine those sectors where reskilling will be required to ease industrial change or to ensure continuous employment for those workers in sectors at risk. A skills audit would also provide the basis for a strategy for the new green skills leader and could be used by RDAs to develop a collaborative approach to skills sharing. Government must use the first National Skills Audit to provide a comprehensive assessment of current and future gaps in low-carbon skills. The results of this could provide the basis for any future development of the green skills strategy.

A Low-Carbon Skill Set

73)  Along with targeting specific skills gaps the IEMA believes that mainstreaming environmental knowledge and skills across all sectors will be essential to achieving a low-carbon economy. In 2008 Lantra, the Sector Skills Council (SSC) for the environmental and land based sector, commissioned IEMA to undertake research into existing National Occupational Standards (NOS), Training and Qualifications in relation to environment and sustainability.[56] A key finding of the research was the lack of a clear structure and framework for environmental and sustainability skills. The EIC call for a similar mainstreaming of green skills and that all existing Sectors Skills Councils should develop programmes relevant for green jobs.[57]

74)  Reducing emissions or adapting to climate change are not seen as a strategic priority for many organisations, and many small businesses and public sector organisations do not yet understand how they need to change. Until technologies are familiar and proven, people and businesses are often reluctant to use them, or are unaware how well developed, robust and cost-effective 'new' technologies have become. As the price of carbon rises businesses will have to become more environmentally aware. They need to develop the skills to deal with these changes now.

75)  We recognise that the Government is working to encourage business to become more resource and energy efficient. The Carbon Reduction Commitment 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.[58] The Government also 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. Despite this further effort is required to mainstream green skills across industry and develop the confidence at board level and below to manage carbon reduction in business. By establishing a leader for the green skills agenda the Government could provide an opportunity to deliver green skills across all sectors. This will be important as green skills must eventually be mainstreamed throughout the whole economy.

43   Defra, Building a Low Carbon Economy: unlocking innovation and skills, May 2008 Back

44   Ev 27 Back

45   Ev 13 Back

46   DBIS, Skills for Growth, November 2009 Back

47   Ev 83 and Ev 170 Back

48   Ev 83  Back

49   Q284 Back

50   Ev 13 Back

51   Ev 84-85 Back

52   HM Government New Industry, New Jobs: Building Britain's future, April 2009,p15 Back

53   Ev 34 Back

54   Ev 25 Back

55   Ev 157 Back

56   Ev 51 Back

57   Q221 Back

58   Ev 123 Back

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Prepared 16 December 2009