Science and TechnologyWritten evidence submitted by EEF

1. EEF, the manufacturers’ organisation, is the voice of manufacturing in the UK, representing all aspects of the manufacturing sector including engineering, aviation, defence, oil and gas, food and chemicals. With 6,000 members employing almost 1 million workers, EEF members operate in the UK, Europe and throughout the world in a dynamic and highly competitive environment.

2. Investment in engineering skills provides real economic returns. Depending on the sector, manufacturing employees produce between £49,000 and £76,000 Gross Value Added compared to the UK national average of £35,500.1 Those entering the engineering industry must be equipped with economically valuable skills and qualifications that employers within the industry require in order to remain globally competitive. We also need to be producing young people with a vast array of skills as more and more companies are achieving flexibility in their workplace by employing multi-skilled staff who are able to switch between tasks quickly. Yet businesses continue to raise their concerns about the availability of high quality engineering skills and the negative impacts this has on their business. In addition, employers are becoming increasingly concerned about the provision of careers advice and the status of technical subjects.

Q1. Does the current engineering skills base meet the needs of employers? Do employers in the engineering sector prefer an academic or vocational profile?

Engineering skills base

3. It is vitally important that when new employees join a business they do so with the necessary skills to support the business and excel in their role. However, more and more young people are entering the labour market without the knowledge of a working environment or the relevant skills they need to occupy a job in the manufacturing industry. Although one may expect the long-term unemployed not to have all the necessary skills required by engineering employers to enter the workplace and hit the ground running, employers do expect STEM graduates to have an adequate grounding of the workplace and the necessary skills required for the role.

4. Anecdotal evidence suggests that many school leavers, FE leavers and even graduates do not have the necessary skills to undertake a role in the engineering profession. Companies expect that some additional training may be required to ensure that new entrants to the workplace are able to carry out the necessary tasks required in their job role. Employers are also increasingly aware of the benefits of investing in their staff through training and as such will offer various forms in order to capitalise on this. However, there are an increasing number of employers who are finding themselves offering educative training in core subjects. Young people should be leaving the education system with sufficient numeracy, literacy and IT skills to succeed in the workplace, yet this is not the case. SMEs in particular, do not have the time and resources to offer further training to school leavers, FE leavers or graduates who should have achieved a level of attainment in core subjects that enables them to undertake an entry-level role in the engineering industry.

5. A raft of previous EEF research highlights the concerns that UK manufacturers have about the availability of skills and the negative impact this has on their competitiveness. Companies strived to hold onto skills during the recession, and as demand has picked up again, more and more businesses are reporting difficulties in recruiting skilled workers they need to occupy jobs. Furthermore, manufacturers expect the problem to escalate with two-thirds of manufacturers predicting difficulties recruiting production staff in the next five years. This concern is shared by all companies, regardless of size or sector. There are also specific concerns about recruitment within two other manufacturing-specific categories of skills: technical for R&D, and design.2

6. A 2009 report from the previously named Department of Innovation, Universities and Skills revealed that employers were concerned about the quality of candidates in some STEM subject areas, referring both to technical skills and relevant work experience. A recent CBI Skills Survey also supported this with employers saying that candidates lacked employability skills, and 37% lacked workplace experience. Furthermore, STEM applicants often held qualifications not relevant to the needs of the business, with one third of employers (33%) citing this as a barrier to recruitment.

7. Other reports have revealed real skills gaps, with employers struggling to find the right workers for the job. The CIPD Labour Market Outlook (Summer 2011) showed that the proportion of UK employers that have vacancies that are hard to fill increased from 43% in 2010 to 46% in 2011. Moreover, manufacturing and production employers were those most likely to say they had hard to fill vacancies, with over half (55%) reporting that this was the case.3 This is also supported by findings from the CBI, which revealed that STEM skills shortages are widespread, with 43% of employers having difficult recruiting staff, rising to 52% of those expecting difficulty in the next three years.

8. Other research has shown that around a quarter of manufacturers have skills gaps, the most likely occupations being trades/crafts and management occupations. SEMTA estimates that 170,000 people working in manufacturing have skills gaps. Furthermore, the sector will need 136,000 people with intermediate and higher level qualifications—NVQ Level 3 and above—over the period 2010 to 2016. The sector will also need 44,500 people at Level 2; 34,200 at Level 1 and 17,000 without any qualifications.4

9. That is not to say that the number of people with STEM qualifications is decreasing. In fact, in 2009–10 there were 233,731 STEM higher education qualifiers at all degree levels. This compares to 172,018 in 2002–03 representing an increase of 36%. Moreover, there are over 2.4 million STEM degree holders in employment in the UK, an increase of 42% since 2002–04 when the figure stood at 1.7million.5

10. Nonetheless this figure is somewhat distorted as it includes non-EEA students. Previously non-EEA students were able to apply for a Tier 1 post-work study visa, which allowed students two years to seek employment after their course ended. However this route was closed in April 2012, leaving non-EEA students with no option but to return to their residing country, or try and switch from Tier 4 to Tier 2 (General). In the majority of cases only graduates who have a highly skilled job offer from a sponsoring employer under Tier 2 will be able to stay and work in the UK. Moreover, the new rules mean that the graduate will have to have a job offer of at least £20,000, or more in specific occupations, and the sponsoring employer would have to be already accredited by the UKBA. Finally, the employer will have to carry out a Resident Labour Market Test (RLMT) prior to recruiting the non-EEA graduate.6 Both the format and complexity of the system is likely to result in the UK losing some of its best international talent to competing countries.

11. We are also concerned about the direction of Government policy on immigration more generally. Caps to migration and continuous changes to the UK’s migration system are likely to deter international students from coming to the UK to study. We believe that students should not be included in net migration figures and a full review of international student’s contribution to the economy should be conducted to support this.

12. An additional problem is that STEM graduates do not always occupy jobs in STEM occupations. Research undertaken for the UKCES found that only three-quarters of the graduate intake for STEM occupations studied a STEM subject at HE level. In England, 40% of STEM graduates went into non-STEM graduate occupations in 2008–09. Moreover, three and a half years after graduation, 28% of STEM graduates were in non-STEM graduate occupations. This is slightly offset by the fact that a quarter of recent graduates working in STEM occupations do not hold STEM degrees.7

13. Nonetheless, this does not sufficiently address the problem that many STEM graduates are deciding against a career in their chosen discipline. There are positive programmes that support skills retention once engineering professionals enter the industry, such as the Talent Retention Solution, which provides recruitment services to companies who have current vacancies or are keen to attract new talent; however there is a distinct lack of well-known, successful programmes that encourage graduates and FE leavers into the industry in the first instance. What we would like to see is a programme that encourages STEM graduates to go into STEM roles. There is an increasing appetite amongst employers to engage with HEIs to ensure that businesses can access skilled engineering graduates. Initiatives such as STEMNET and its ambassador scheme have been developed but one may still question its awareness amongst businesses, especially SMEs. We believe there is scope to review the STEMNET programme to ensure that more is being done to engage with undergraduates studying STEM disciplines and encourage them to occupy a STEM role upon graduating.

Employers welcome vocational and academic profiles

14. There are various routes into a career in engineering; university-based education, FE college-based vocational education and work-related training (eg apprenticeships). EEF members welcome new recruits from both academic and vocational backgrounds, and do not tend to prioritise one over the other, instead seeing them as complimentary.

15. A survey of employers by City & Guilds revealed that many employers would prefer to take on an apprentice than hire a graduate. This is likely to be due to seeing a faster return on investment with an apprentice. The poll also showed that over half (52%) of companies which already recruited apprentices believe they offer greater value than hiring graduates. Despite this, the report also found that one in five companies thought it was too risky to take on an apprentice in the current economic climate.8

16. The number of new starts apprenticeships in all subjects has increased from 65,000 in 1996–97 to 279,000 in 2009–10, an increase of 330%. In this same time period, the number of engineering apprenticeship starts rose from 11,500 to 15,000, an increase of 35%. There was also a slight increase in Level 3 Apprenticeships, which rose from 48.6% to 52.2%.9 Although a “slight” increase is welcomed, the Government must do more to promote high end apprenticeships and ensure that the maximum number of people undertake these. A survey of EEF members revealed that nearly half of respondents planned to recruit apprentices between the ages of 16 and 18 in the next year, and almost a third plan to hire apprentices aged 19 to 23, demonstrating the continuing desire amongst manufacturing companies, including those within the engineering sector, to take on apprentices.10

17. The introduction of Higher Apprenticeships demonstrates employers’ enthusiasm for a mix of academic and vocational skills. Higher Apprenticeships not only meet employers’ need for high level skills, but also provide a way of developing a company’s workforce, therefore increasing productivity and maximising efficiency. There are currently 11 Higher Apprenticeships Frameworks, one of which is Engineering Level 4, again showing engineering employers’ desire for high end skills. Within this framework, more and more apprentices work towards a knowledge-based qualification such as a Foundation Degree.

18. Furthermore, Engineering Apprenticeships are highly rigorous. As well as undertaking an array of practical skills tests, apprentices are subject to intense examinations. Therefore Higher Apprentices are becoming a hybrid of both vocational and academic qualifications, and as such provide a viable solution to engineering employers’ increasing desire for practical and academic skills.

Q2. What impact will recent changes relating to engineering qualifications in England have on the uptake of technical subjects and the skills based needed by the engineering sector?

19. The Secretary of State for Education’s announcement that the Engineering Diploma is to be downgraded from five GCSEs to one initially caused concern amongst EEF members. The Diploma is widely recognised by the industry as a route to providing young people, the next generation of engineers, with the skills they need for the future. The downgrading of Diplomas has not sent out the right signal to both employers and young people that Government is serious about the status and value of vocational education. Moreover, identifying the Engineering Diploma as an example of what will be downgraded relayed the message that Government was not committed to rebalancing the economy towards manufacturing.

20. The impact of these changes will undoubtedly be a reduction in the number of schools offering the Diploma as the additional support needed to offer such a course would not be reflected in league tables. Consequently, we will see a fall in the number of students enrolling on it.

21. We are also aware of the National Curriculum Review and the impact this may have on the number of young people studying subjects that encourage young people to pursue a career in engineering. An example of this is the removal of Design and Technology (D&T) as a compulsory subject. Introducing elements of engineering through subjects such as D&T can often ignite a spark in a young person to explore the option of engineering as a career choice.

22. We must stress however that the main priorities for EEF members are qualifications in STEM subjects, and this should be Government’s primary focus. We welcome efforts to ensure that young people study these core subjects through all Key Stage levels. Attached to this is impartial careers advice, which will be discussed later on in this submission.

23. We would like to see the Government explore the role of University Technical Colleges (UTCs) further. UTCs are one of the most radical changes we have seen to our education system in some time providing tailored and specialised engineering and technical schools to 14 to 19 year olds. Importantly, employers play an active role in shaping what is being taught so that students obtain the skills and qualifications that are beneficial to them and the workplace. Local and national employers engage with the students by offering work experience so they have real life experience of the working environment.

24. As of May this year the number of UTCs stood at 34, and it is hoped this figure will increase to 100 in the next five years, growth that EEF supports. If UTCs are to be seen as a key source of skills to the engineering industry, then this number must continue to rise at a relatively fast pace. The concern is that UTCs require a substantial amount of investment at a time when government spending is being reduced

25. We are aware of the possible impact of the rise of tuition fees from autumn 2012. Although its real impacts remain slightly uncertain, we may see a fall in the number of students going to university to study STEM subjects including engineering. Recent estimates show fall in applications by 10%, although when looking at engineering disciplines alone, this figure is far lower.

Q3. How do the approaches taken by Devolved Administrations to produce technically skilled workforce differ to the current approach in England? What are the strengths/weaknesses of the different approaches?

Learning lessons from Scotland

26. One of the major challenges in England is the lack of coordination when it comes to delivering skills. In Scotland, information is more readily available in a single portal, notably Skills Development Scotland. Its employer services range from funding for employee training and training plan development to redundancy support. Skills Development Scotland has decided on three goals (enable people to fulfil their potential, make skills work for employers and be a catalyst for positive change), each with key strategies which articulate its contribution to the Scottish Government’s Economic Strategy (GES). The Scottish Advisory Committee on Lifelong Learning has also been a contact point for the Scottish Government on all items skills-related. Comprising of employers, training providers, colleges, HEIs and Unite, the Committee acts as a sounding board to the Scottish Government and has been extremely effective in doing so.

27. There are clear benefits of such a Committee in Scotland, as it ensures that Government skills policies are formulated, even in the early stages, against a backdrop of views from relevant stakeholders. Although we would not wish the Government to introduce an additional Committee or Advisory Board, we do believe we can ascribe some of the benefits to existing organisations, such as UKCES.

28. EEF’s sister organisation Scottish Engineering works closely with PrimaryEngineer, and the message is clear that when it comes to instilling interest in manufacturing, you cannot start early enough to promote and encourage a future career within engineering. There is also a strong focus on integrating engineering into the curriculum. What was previously termed Technological Studies has been renamed Engineering Science. The aims are to apply knowledge and understanding of key engineering facts and ideas, apply skills in analysis, design, construction, communicate engineering concepts and develop an understanding of the role and impact of engineering, to name a few. It is easy to see the benefits of introducing subjects that focus on engineering at an early age, as well as the core subjects of English, Maths and Science. We would be keen for the National Curriculum Review to explore the possibility of introducing a subject similar to Engineering Science.

Profile-raising in Wales

29. A positive example of a STEM awareness raising programme in Wales is the Engineering Education Scheme Wales (EESW), which is designed to encourage sixth form students to study engineering in FE or HE. Local firms set R&D briefs related to real industrial problems for teams of Year 12 students. Over a period of six months, the students develop solutions to the problems, working with engineers from the local businesses. The benefits of EESW are enhanced knowledge and capabilities in STEM, interview, teamwork and project management experience and exposure to engineering projects, demonstrating that engineering is an exciting and intellectually challenging career. Through the Extended Projects (120 Guided Learning Hours) students can obtain up to 70 UCAS points, giving them a head-start in applications to HEIs.11

Q4. Could the Government and others do more to raise the status of technical subjects?

Profile-raising initiatives

30. EEF welcomes the launch of See Inside Manufacturing initiative as a way of raising awareness of the industry. We also strongly back the Make it in Great Britain Campaign as a way to champion the industry. Such campaigns and initiatives give engineering a much needed promotional boost. We hope to see a firm commitment from the Government to continue these projects and increase awareness of their work.

31. EEF supports organisations such as EDT, PrimaryEngineer and EngineeringUK in promoting careers in manufacturing and many EEF members already engage directly with schools and FE colleges. However, this work is uncoordinated and some employers are unaware of the avenues that enable employers to connect with schools. Business understands it has a role to play, with 31% of employers offering STEM related work experience and 28% engaging with schools in order to promote STEM subjects.12 If we want to see these percentages increase, then barriers that prevent employers from offering work experience and engaging with schools in other forms need to be addressed.

Impartial careers advice is key

32. The key factor to increase participation and raise status of technical subjects is solid, impartial careers advice for young people, their parents and teachers. It is imperative that the recently launched All Age Careers Service promotes engineering apprenticeships, and the rewards of pursuing a career in engineering are relayed to encourage take up.

33. A survey conducted on behalf of City & Guilds in September 2011 found that a quarter of teenagers had never received any careers advice. Of those studying A Levels and university courses, 22% had not received careers advice, increasing to 28% for those undertaking apprenticeships, BTecs and GNVQs. This is extremely worryingly given that the new National Careers Service will not provide face-to face guidance for those under 19.

34. From September 2012, the responsibility of delivering careers advice will fall to schools themselves although this will not be in any prescribed form. It is crucial that those issuing the advice are aware of the various pathways available to young people and identify those careers the young person can excel in. Many companies still struggle to attract new talent straight from compulsory education into industry.

35. Our biggest concern in this regard is the lack of direction as to how schools will offer guidance and the lack of any requirement to engage with business. In our submission to Government ahead of the Budget earlier this year we recommended improving STEM careers advice, by making it part of CPD for science teachers and the subject curricular. It is also important to build real-world relevance into teaching so that young people understand how engineering is integrated into their everyday lives and the opportunities that result from an engineering career.

36. A study by the previously named Department for Trade and Industry (2006) revealed that “employment levels in SET occupation groups are expected to grow faster between 2004 and 2014 than the growth rate across all occupations.” There is therefore a wealth of opportunity for young people to pursue a career in such subjects and these are the messages we should be relaying to our young people.

37. One way of achieving this is by publishing average earnings of STEM occupations in a place accessible to young people, as well as teachers, careers advisors and parents. Milkround is a successful programme that provides graduates with key information on what they can do with their degrees, applying for jobs and much more. Notgoingtouni.co.uk mirrors the work of Milkround, offering young people advice on apprenticeships, jobs and possible gap years. What is still missing however is an accessible portal for young people to view the potential opportunities and benefits, including earnings of pursuing a career in STEM occupations. With the new All Age Careers Advice Service now launched and schools taking on responsibility for careers advice from September this year, this is something we would like to see implemented as soon as possible.

38. Our Budget Submission also called on the Government to implement a minimum standard of careers advice on the whole range of employment and learning options available. To this end, local authorities must have a role in ensuring vocational education and progression routes are given equal in careers guidance.

Q5. What more could be done to attract and retain a more diverse technically skilled workforce.

39. EEF’s report Flexibility in the modern manufacturing workplace revealed that on average respondents said that almost 80% of their workforce was male. This split between male and female employees was roughly in line with the findings of EEF’s 2009 survey as well as official statistics which put female employment in manufacturing at 24%.13

40. Moreover, there is a huge disparity in the percentage of female engineering professions in the UK compared to other European countries. The percentage of women working as engineering professionals in Italy, Spain and Sweden as well as the vast majority of other European countries, was twice that in the UK. UKRC research, commissioned by Engineering UK showed that only nine% of engineering professionals are women compared to 18% in Spain, 20% in Italy and 26% in Sweden.14

41. Furthermore, nearly two-thirds of men who graduated in engineering and technology disciplines entered employment within engineering and technology, whilst for women this figure was under half (45.8%). There is therefore an immediate need to address the lack of female participation in STEM professions, which will subsequently expand the engineering talent pool.15

42. Organisations such as the UKRC and Campaign for Science and Engineering (CaSE) are a step in the right direction. UKRC provides expert advice and guidance to build gender equality and diversity into science, engineering and technology (SET), working with a range of stakeholders to promote general equality and diversity in SET and assisting thousands of women in STEM careers. Similarly CaSE raises the political profile of science and engineering, with a strong focus on overcoming challenges in getting women into STEM. We would like to see a firm commitment from the Government to address this issue and build on the successes of organisations such as CaSE to both promote technical subjects and ensure that they are accessible to all.

EEF’s Future Work on Skills Gap in the Manufacturing Industry

43. We are currently conducting a skills survey to provide a baseline of manufacturing skills, illustrating the current investment in skills and training by manufacturers and to identify where skills gaps lie within the industry.

The main objectives of our survey are:

to determine what the current (and future) needs of manufacturers and in terms of the skills need to support and grow their business;

to identify how manufacturers currently meet their skills and training related needs;

to seek employers’ views on qualifications available and their value;

to evaluate the quality of training providers;

to look at the importance of apprenticeships to business; and

to explore the need for impartial careers advice.

We look forward to sharing our findings of this report with the Science and Technology Committee in Autumn 2012.

June 2012