Challenge and Opportunity – Sector Connector Enginuity Helps Build Back Better

There was much for engineering and manufacturing businesses to cheer in today’s Budget – and it provides a strong foundation on which the sector can start to build for a green, high-tech post-pandemic future. The Chancellor has clearly signalled the direction of travel he wants our economy to take – and our sector will be crucial if he’s to get there.

The new UK Infrastructure Bank will have a twin focus on tackling climate change and promoting economic growth across the United Kingdom. There will be extra money for new green, high-tech projects such as a hydrogen hub in Holyhead and an Energy Transition Zone in Aberdeen. There will be a new ‘superdeduction’ which means businesses will effectively be paid to invest in their futures.

However, a project is only as good as those working on it. New equipment is only useful to people who know how to use it. And that’s why there must be a twin-track approach to investment in that green, high-tech future for the UK. All of that very welcome capital investment must be matched by a robust commitment to skills and training – and on this, the Budget is potentially far less transformative.

The word ‘infrastructure’ pops up 41 times in the Budget document – but ‘skills’ has just 25 mentions, and much of the investment in skills that the Chancellor referred to today had already been announced. The Lifelong Skills Guarantee, sector-based work academies, free Level 2 and 3 learning for young people who can’t find work, skills bootcamps, expansion of Traineeships – all policies which have been announced during the pandemic and all policies which got another airing today.

What new announcements there were on skills will be welcomed for what they are by employers in engineering and manufacturing – although they are unlikely on their own to deliver the major sustained boost needed to the sector’s skills base. For example, employers are hardly likely to turn their noses up at grants of £3,000 per apprentice taken on (plus £1,000 more for the youngest). However, research we’ve undertaken during the pandemic (and set to be published next month in a full report – so watch this space!) suggests that where employers have been making use of such policy initiatives they’ve largely done so to support activities that were already going ahead, not to generate new activity. Initiatives such as Kickstart, by contrast, haven’t cut through in nearly the same way.

Extra help to bring in the best talent from outside of the UK, through a simplified, fast-tracked visa process, will help employers to bridge gaps at the highest skills levels – but this is not in itself a sustainable long-term solution to the UK’s skills challenges. It also does nothing to alleviate pressures at lower levels. There remains a major skills shortage in engineering and manufacturing at technician level, and there is going to be a significant need to up- and reskill existing workers in the sector. This isn’t news to the government – that need will be generated, in part, by the government’s own strong focus on green and cutting-edge technology, and government reviews have clearly mapped out how the labour market is going to change.

Despite the warm words from government, we still need greater action on skills if we’re going to mitigate the impact of those changes on the engineering and manufacturing workforce. We know from our research (as mentioned the full report will be out next month) that training providers are up for the challenge of developing the talent our sector needs. Employers in engineering and manufacturing are, as ever, committed to growing their own talent. The new National Manufacturing Skills Taskforce has been set up to provide the necessary strategic leadership, ensuring that the sector as a whole can move forward towards a high-skill, green, high-tech future.

As we chart the UK’s course out of the pandemic, and as we begin to think about the future of engineering and manufacturing, that strategic leadership is going to be needed more than ever. In the absence of the robust government action on skills that we need, Enginuity will continue to work with industry, apprentices, engineers and everybody else who has an interest in engineering a green, prosperous and highly-skilled United Kingdom. Our door is always open!