Green Jobs Contents

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2Jobs and skills for a green covid-19 recovery

Labour market interventions

37.While recent labour market statistics show falling unemployment and vacancies at a record high, the impact from the end of the Coronavirus Job Retention Scheme on 30 September 2021 is yet to be determined.99 The House of Commons Library has found that ‘workers who are from an ethnic minority group, women, young workers, low paid workers and disabled workers have been most negatively economically impacted by the coronavirus outbreak’.100 The Government says it is ‘committed to a green recovery from the [covid-19] pandemic’101 and ‘determined not only to build back better but to build back greener’.102 BEIS told us:

There is evidence from the global financial crisis in 2008 that suggests that in the short-term, green investments, such as renewables and energy efficiency, are effective means of delivering jobs and growth in response to instances of economic crisis. They offer higher employment and growth pay-offs compared to traditional stimulus measures, thanks to higher jobs multipliers (as in the case of renewables), which boost spending and increase short-run GDP.103

38.Contributors told us green jobs could play a valuable role in the covid-19 economic recovery. Mike Hemsley, of the CCC, said the labour-intensive nature of many green jobs provided a good opportunity in times of unemployment to bring people into the workforce, e.g. through investment in public transport, walking and cycling infrastructure, nature restoration, tree planting, peatland restoration and flood resilience.104 Libby Peake, of Green Alliance, listed examples of ‘shovel ready’ green jobs in energy installation, electric vehicle charging and infrastructure and nature restoration.105 Our report Growing back better: putting nature and net zero at the heart of the economic recovery found that action to counter the effects of climate change and biodiversity loss could create jobs, spur innovation and build economic resilience to future crises.106 The Green Jobs Taskforce has similarly called for the Government to ‘extend its green recovery programmes, directing spending towards low carbon activities with rapid job creation potential, in areas at risk of unemployment.’107

39.Conversely, if economic recovery action is not aligned with climate and nature ambitions, recovery action risks having a negligible or even negative impact on the growth of the green economy and the number of jobs it can support. CCC has warned that ‘short-term choices aimed at tackling unemployment and inequality, if poorly targeted, could lock in higher emissions in the long-term.’108 RSPB told us ‘a long term zero net greenhouse gas emissions test for government employment schemes would help to ensure that high emissions are not locked-in when tackling unemployment.’109

40.The Government’s initiatives to get people back into employment include:

• the Kickstart scheme, announced in the July 2020 Plan for Jobs, providing 6-month work placements aimed at 16–24-year-olds on Universal Credit. Under the scheme, the Government covers the National Minimum Wage for 25hrs per week for 6 months, plus £1,500 for setup costs and employability skills development. £2bn of initial funding was provided, intended to fund over 250,000 jobs;110 and
• the Restart programme, announced in the November 2020 Spending Review, which will provide up to 12 months’ tailored support to Universal Credit claimants out of work for at least 12 months. The programme commenced in summer 2021, with £2.9bn funding over 3 years.111

41.The Green Jobs Taskforce says that ‘Kickstart provides an important model for reaching both long-term unemployed young people and older workers at risk of unemployment due to decarbonisation, while also bridging the growing green skills shortages that risk slowing the climate transition’.112 However, Groundwork noted that neither Kickstart nor Restart is particularly aligned with the Government’s environmental or green jobs goals:

The government should ensure that any interventions in the labour market are designed to aid the UK’s transition to a green economy. For example, there are no conditions in the current Kickstart scheme to ensure that the skills and experience young people develop are compatible with our climate and environment ambitions. There is a risk that high carbon industries use the scheme and young people end up with skills which will be redundant in a few years’ time. The same is true of the Restart scheme currently being commissioned by the Department for Work and Pensions.113

Indeed, policy documents available for Kickstart and Restart make no reference to a ‘green’ recovery or the role of the initiatives towards the Government’s climate or nature ambitions.114

42.We asked Mims Davies MP, Parliamentary Under Secretary of State (Minister for Employment) at DWP, to what extent Kickstart and Restart had been designed with the Government’s net zero and environmental goals in mind. The Minister responded:

DWP is uniquely placed to be able to provide support for people into work and into new sectors. In those programmes […] and throughout the work that we are doing around economic recovery, net zero and the approach that we need as a Government has been front and centre. The work that we have been doing with Government Departments to monitor the evolving economic and labour market situation has been key in terms of finding effective ways to help people back into work in the here and now. I am delighted that 2,000 of over 200,000 new jobs that have come from nowhere, in terms of the Kickstart scheme, are in the green sector.115

The Minister said she had spoken to people unemployed because of the pandemic who told her that ‘they want to work in that [green] sector and they want to be part of that transition to a low-carbon economy.’116 However, the 2,000 Kickstart placements in green sectors represents only 1 per cent of those the Minister said had been created. It appears a valuable opportunity to boost green skills, experience and employment as part of a green recovery has been missed.

43.Just 1 per cent of Kickstart scheme jobs were in green sectors. While we understand the need to support current industries, we consider that an opportunity has been missed for a greener employment recovery scheme, to contribute towards the Government’s ‘building back greener’ aims.

44.We recommend that the Government’s net zero and environmental goals are considered at the design stage of future labour market interventions, to ensure that such interventions are fully aligned with the green recovery.

National Nature Service

45.The Environment Secretary has said that ‘restoring nature is going to be crucial as we build back greener from the pandemic’, noting that the UK is ‘sadly one of the most nature depleted countries in the world’.117 In September 2020, the Government launched the Green Recovery Challenge Fund, to ‘kick-start projects to halt the loss of wildlife and tackle climate change, as we build back greener from the coronavirus pandemic.’118 This brought forward £40m of nature funding for environmental charities and partnerships to fund nature projects across England, ‘create up to 3,000 jobs and safeguard up to 2,000 others’.119 In March 2021, this funding was extended by a further £40m.120

46.Aldersgate Group say creating jobs in nature restoration helps towards the Government’s wider environmental goals as well as increasing ‘physical resilience to flooding or landslides, delivering savings in other sectors’.121 The Green Jobs Taskforce includes nature restoration in its list of areas which have ‘high employment multipliers and can be mobilised very quickly’, and says there are ‘opportunities in nature-based job creation which could aid the recovery of those communities across the UK already experiencing high unemployment before the pandemic’, including the potential for over 16,000 jobs in woodland, peatland and urban park improvement in areas ‘severely impacted by employment challenges.’122

47.However, we have heard that capacity is a ‘major issue’ for the UK’s nature sector due to its reliance on charitable sources of income, with fund-raising efforts made more difficult by covid-19.123 Groundwork told us:

When it comes to the creation of new jobs in the nature sector, the need and appetite outstrip the funding available. The Green Recovery Challenge Fund, for example, was oversubscribed with applications to create nature-based jobs. These roles are, often literally, ‘shovel ready’ and even after the available funding was doubled to £80m it was not sufficient to meet the demand for entry level job creation in the sector. A strategic intervention is needed to meet the scale of the challenge.124

The Green Jobs Taskforce has said that the ‘restoration of habitats such as peatland, grasslands, saltmarsh and seagrass meadows to provide natural carbon sinks’ will require ‘significant expansion across environmental and conservation professionals, such as countryside rangers, forestry workers and horticultural tradespeople’, adding:

There are currently few existing training opportunities or qualifications in peatland or other restoration. There is a need to increase training schemes to meet the labour demand.125

48.To meet this need, Wildlife and Countryside Link (‘Link’) and other nature sector employers have called for a National Nature Service: ‘an employment and training scheme in which tens of thousands of jobseekers, particularly young people and those from underrepresented and disadvantaged groups, would be employed and trained in environmental projects designed to level up access to nature, address social and health inequalities and bend the curve on nature’s decline.’126 The National Nature Service would arrange 12-month placements with nature sector organisations to carry out ‘shovel-ready’ nature projects such as tree planting, nature-based flood protection and invasive species control.127 Employees would receive the National Living Wage128 and develop transferable and wider employability skills, such as project management and CV writing, alongside environmental skills, with the opportunity to gain technical qualifications.129 The proposal focusses on England, noting it could extend across the UK should the devolved administrations also introduce such a scheme.130

49.A letter to the Chancellor of the Exchequer in June 2020 supporting a National Nature Service was signed by more than 60 organisations,131 and a YouGov poll commissioned by Link in September 2020 found that 83% of the public were supportive of the Government offering jobs paid at the National Living Wage to the unemployed to work on projects improving UK nature and the environment.132 The Cambridge Zero Policy Forum has also recommended the creation of a National Nature Service.133

50.In our February 2021 report Growing back better: putting nature and net zero at the heart of the economic recovery, we recommended that the Government work with conservation charities to pilot the National Nature Service over summer 2021.134 Disappointingly, the Government’s response focussed on the Green Recovery Challenge Fund rather than engaging directly with the idea for a National Nature Service.135 When we asked Minister Pow whether the Government had considered introducing a National Nature Service, she told us:

We believe we already have many measures in place that are driving things in that direction anyway. For example, we set up the Green Recovery Challenge Fund, which is an £80 million fund, to help with the green recovery. The whole focus of it was to create jobs or protect jobs, all of which would work on projects on the green environmental agenda. […] We are in the second tranche of the Challenge Fund right now. We hope by the end of it we will have generated about 2,500 jobs, all of which are in projects right across the environment.136

51.We welcome the investment in nature provided by the Green Recovery Challenge Fund and that the winning projects include those with opportunities for training and skills provision.137 However, we think the Government’s response rather misses the opportunities an established national scheme such as a National Nature Service would provide to build capacity in the sector, contribute towards the Government’s levelling up ambitions, and spur employment for a green economic recovery through helping people back into work while providing them with transferable skills and training. Link says that ‘the furlough scheme and the Green Recovery Challenge Fund has kept environmental NGOs going, but they are in no position to act unilaterally to provide the training required for 16,000 new jobs’.138 Link adds that ‘no current Government scheme fits the nature training need’:

The Kickstart scheme139 is work rather than training focussed, with placements lasting only six months. Experience has shown it takes a year to embed fully the transferable skills, employability skills and environmental skills a person needs to access nature work. There is a need for tailored intervention to provide a nature training pipeline, to bring together the expertise of the environmental NGO sector and the financial capacity of Government to unlock a wave of nature recovery jobs in high unemployment areas. The National Nature Service would be that intervention, acting as a catalyst to realising the levelling up agenda through new nature jobs.140

52.Following our recommendation for a pilot scheme, Link produced a proposal for how a one-year pilot could work in practice. Under the proposal, an initial cohort of 100 would be recruited under the co-ordination of a unit in DWP, using the expertise and structures in place for Kickstart, with input from Defra, DfE and BEIS.141 The pilot would require Government funding of just under £4.5m, after which private finance and charitable funding would support the extension of the programme beyond one year, in recognition of the benefits of the training pipeline provided by the scheme:

In doing so it would follow the precedent of the Teach First scheme, which started with a pilot programme of just 186 young people in 2003. Government funding allowed the scheme to set up and seize the opportunity its proposers glimpsed; of training up a new cohort of young people to provide a shot in the arm for education, particularly in areas of high unemployment and low opportunity. Over the ensuing two decades Teach First has grown ten times in size. Government funding as a proportion of its financing has shrunk over the same time period, as educational organisations and private companies have recognised the value of the training the scheme provides and been prepared to pay to sustain the training pipeline.142

53.We observe that as the proposal for a National Nature Service includes a focus on areas of high unemployment and an aim to increase diversity in the sector, such a scheme would also help to accomplish the Government’s levelling up ambitions143 and ambitions to increase diversity and inclusion in green jobs.144

54.We first recommended that the Government pilot a National Nature Service in our report ‘Growing back better: putting nature and net zero at the heart of the economic recovery’. The Government’s response did not engage directly with this proposal. A National Nature Service would build valuable capacity in the nature sector while providing people with wider employment skills, helping to deliver a green recovery. An established national scheme, rather than one-off funding, would help capacity in the longer term and could have wider reach.

55.We reiterate the recommendation from our earlier report that the Government should work with conservation organisations to pilot a National Nature Service during 2022.

Green Homes Grant voucher scheme

56.The Green Homes Grant (GHG) scheme was announced in July 2020 as a way to boost green jobs and skills for a sector which had been hit hard by the pandemic, whilst delivering on the Government’s ambitions to improve the energy efficiency of the UK’s housing stock.145 The GHG provided vouchers worth up to £5,000 for energy-saving improvements and was split into 2 parts: a £1.5 billion voucher scheme and a £500 million Local Authority Delivery scheme.146 The scheme aimed to support ‘over 100,000 jobs in green construction’ across the UK.147 In September 2020, the Government launched the GHG skills training competition, which awarded 18 successful applicants £6.4 million to deliver training to support the GHG scheme.148

57.Our report Energy Efficiency in Existing Homes found that the voucher scheme element was beset with difficulties,149 and ultimately scrapped, contrary to our recommendation that it should be improved and extended.150 Our report identified a lack of consultation with industry for delivery of the scheme, compounded by complexity and delays in issuing the vouchers.151 While the voucher scheme was intended to support the creation of 100,000 green jobs, our report found that it might have actually reduced the sector’s capacity in the short term.152 In the Government’s response, the Government acknowledged that ‘the Voucher scheme was impacted by several delivery challenges’ and ‘some vouchers have taken longer to process than we would have liked.’153 The NAO’s report on the GHG voucher scheme, published in September 2021, found that BEIS ‘did not sufficiently understand the challenges facing installers before the Scheme was announced, failing to learn from previous schemes’.154

58.Issues with the scheme were also raised in the evidence we received in this inquiry. Contributors highlighted skills and workforce shortages to deliver the scheme,155 with the Mineral Wool Insulation Manufacturers Association (MIMA) noting that home retrofits ‘are of course labour-intensive and mostly done by SMEs [small and medium-sized enterprises]’.156 Contributors also expressed concern at the short time frame funding was available to deliver the work.157 E.ON and MIMA called for an end to ‘boom and bust’ cycles in retrofit policy,158 E.ON adding:

The past decade has seen the introduction and eventual scrappage of schemes such as Zero Carbon Homes, Green Deal and Solar subsidies amongst others, and as a result both the public and private sector will be sceptical of any short-term programmes introduced.159

This scepticism is unlikely to have been alleviated by the subsequent scrapping of the GHG voucher scheme.

59.The Energy Efficiency Association told us that ‘the industry needs to be involved in the design of these schemes’ and that Government agencies ‘need to communicate much more willingly with the businesses delivering the results for them.’160 They highlighted the financial difficulty businesses experienced as a result of delays in the scheme, drawing our attention to

the negative effects an ill-timed announcement of good news can have on job creation. By announcing a scheme to stimulate demand and create Green Jobs without the financial support to help companies build the infrastructure to meet that demand quickly enough, the scheme itself can put jobs at risk.161

60.The GHG voucher scheme was a promising, recent green jobs initiative which did not achieve its objectives due to poor implementation. It is important that the Government addresses the shortcomings in design and implementation of the scheme in a way which informs future green jobs initiatives across this and other sectors. In our Energy Efficiency in Existing Homes report, we recommended that the Government review the preparation, launch, funding and delivery of the GHG programme, and that the recommendations of that review be applied to all cross-Government working on programmes to deliver net zero objectives.162 In its response, the Government noted that two reviews were underway by external bodies; the NAO report into the GHG voucher scheme, and an evaluation by Ipsos MORI, but did not say whether the Government was also reviewing the scheme.163

61.We asked Minister Trevelyan whether the Government was engaged with contractors so that the redesign or future initiatives do not make the same mistakes. She replied:

I know that Lord Callanan, who has direct oversight of this area, works very closely with the sector. As the construction Minister I talk to them on a macro level, if that is the right way to describe it, on a very regular basis. I had a meeting with the Construction Leadership Council last week. It is very busy and is wanting to drive forward, particularly with the CO2nstructZero challenge it has set itself, to help all parts of the sector to work in a greener way and to help its customers to build greener homes and, indeed, to help retrofit, which is, as you say, a huge challenge. I am sure the NAO review, working with the Treasury, will help to identify those and give us the right footing on which to keep working on retrofit strategies as we move forward.164

While the NAO’s report identifies lessons for future schemes,165 the Comptroller and Auditor General reports to the House of Commons,166 and his reports are not intended to substitute for the Government’s own evaluation processes. The NAO reported in September 2021 that BEIS was ‘currently undertaking an exercise to understand what lessons can be learned from the design and implementation’ of the GHG voucher scheme.167

62.To address the skills shortage, our Energy Efficiency in Existing Homes report recommended a national retrofit strategy to provide the necessary training or retraining, to be developed with education providers, which should address the shortage of certified heat pump installers.168 Development of a national retrofit strategy was also recommended by the Royal Institute of British Architects in their submission to our Green Jobs inquiry.169 The Government responded that:

[BEIS] is continuing its work with the Green Jobs Taskforce to produce an Action Plan for Net Zero skills across a range of sectors with the goal of 2 million net zero jobs by 2030. As part of this, for heating, Government is aware that we will need to significantly increase the number of trained installers to deliver our 2028 target of installing 600,000 heat pumps per year. We are working closely with both industry and education providers to ensure that appropriate training is available, both for new entrants to the sector and existing heating installers who do not have heat pump experience. By the end of 2021, we expect industry to have capacity to upskill over 7,000 heating installers per year to install heat pumps.170

However, this response does not address the issue that a holistic strategy is needed, given the multiplicity of skills required in a home retrofit. The Energy Efficiency Association listed 30 different job roles ‘just to deliver the Green Homes Grant’, including heating engineers, loft insulation installers and electricians.171 Energy Systems Catapult told us: ‘the few existing training schemes on low carbon are fragmented and insufficient to meet the scale of change required.’172

63.The Government response points to its work with the Green Jobs Taskforce and its Action Plan; while the Green Jobs Taskforce report sets out the scale of the challenge, it does not include a retrofit skills strategy.173 The Government’s Heat and Buildings Strategy contains analysis of skills gaps and current shortfalls in training provision and capacity for retrofit and heat pumps.174 The Government says that to meet demand, it will ‘incentivise certification’ to British Standards Institution retrofit standards and ‘work with industry to support training and new routes of entry in key skills shortage areas’, and that it is already ‘working closely with industry to ensure appropriate high-quality training is available’ for heat pump installers, and ‘working with the further education sector to increase and improve the availability of training and apprenticeships’.175 This is a start, but falls short of the level of detail and planning needed to meet the scale of the challenge. A national retrofit strategy, which encompasses skills provision for heat pump installation, could help deliver this holistic action and address these skills and capacity shortages.

64.The voucher element of the Green Homes Grant scheme, the Government’s recent flagship scheme to address covid-19 impact while stimulating jobs in the green sector of home retrofit for energy efficiency, was not a success, and may even have put people out of work; there is a need to rebuild trust with the retrofit sector. Lack of engagement with the industry over the design of the scheme led to it being sub-optimal, resulting in a fragmented and actively disruptive approach to developing skills in a vital sector. The Government has acknowledged that the voucher scheme has not operated as intended in this respect.

65.We recommend that the Government’s own analysis into the Green Homes Grant voucher scheme be completed during 2021 to ensure lessons learned inform future schemes’ designs, and include a plan for industry engagement, to rebuild trust.

66.The scale of the challenge to retrofit homes is significant, as recognised by the Government when launching the Green Homes Grant scheme, claiming it would create 100,000 green jobs. With millions of homes requiring retrofitting to achieve decarbonisation through improved insulation alongside electrification by heat pump installation, or, in due course, potentially hydrogen insertion into the gas grid, the industry requires substantial upskilling and an increase in the trained workforce across the UK.

67.In line with our recommendation for a national retrofit strategy in our Energy Efficiency in Existing Homes report, by the end of 2021 the Government needs to set out a programme to encourage the development of relevant skills across the construction trade, including small and medium-sized enterprises, to stimulate development of skilled trades to increase the capacity markedly.

Case study: The circular economy in the green recovery

Our report on Electronic Waste and the Circular Economy highlighted how circular economy activities, such as repair and recycling, could be a net contributor to jobs and retain value in the UK economy.176 Waste and Resources Action Programme and Green Alliance have calculated that 517,000 jobs could be created through a ‘transformational’ move to a circular economy, through ‘substantial progress in recycling and remanufacturing, but also major development of the reuse, servitisation [provision of goods as a service rather than through ownership] and biorefining sectors’.177 Libby Peake, of Green Alliance, told us investment in the circular economy could boost supply chain resilience, reduce reliance on raw materials, increase profits in the manufacturing sector, help meet carbon budgets, and reduce biodiversity loss caused by resource extraction and processing.178 The Chartered Institution of Wastes Management (CIWM) described the resources and waste sector as ‘a key enabler’ of a green recovery, given its role in ‘improving resource availability and security across the UK economy through the supply of the quality secondary raw materials and feedstocks.’179 The Environmental Services Association (ESA) told us new recycling and waste facilities could provide employment opportunities across the UK.180 CIWM said that growth in reuse and repair required skills in customer service and retail, and so would absorb people from sectors particularly affected by the pandemic, such as retail and hospitality.181 ESA told us that science, technology, engineering and mathematics (STEM) skills were important as new technology in the sector developed.182 CIWM told us there was a need to promote the attractiveness of circular economy careers.183 Dr Adam Read, of SUEZ Recycling and Recovery, told us: We have to go much bigger and much faster in making our sector interesting, appropriate and flexible for people that would have historically looked at us and gone, “You’re binmen.” Well, we are not. We are resource custodians, we are climate change advocates and we are passionate, and it is the passion that we need to instil in my son’s generation quickly.184