Pipe Up: Skills funding slashed

With government funding being slashed, the skills crisis is about to get even more acute for utilities.

Up to now, the Energy and Efficiency Industrial Partnership (EEIP) has received £1 of government funding for every £2 invested by industry. This commitment was part of the government’s employer ownership of skills policy, an agenda that was years in the making.

The funding poured into the EEIP, alongside investment from 70 industry members including utilities, energy companies and suppliers, has achieved great things. With an ageing workforce and rapidly changing skills sets – both technical and “soft” – utilities face perhaps the most challenging skills pipeline problems of all engineering-based sectors. This skills challenge was being helped by the EEIP by its developing apprenticeships to arm young recruits with the right skills for the future, establishing talent banks to match individuals to employers, and creating workforce planning tools to help employers forecast their needs.

In September, however, the Department for Business, Innovation & Skills (BIS) announced that funding for all industrial partnerships would be slashed a year sooner than expected. In part the move creates headroom for budget cuts in the strategic spending review, and in part it reflects a shift in the direction of travel for skills policy which will see BIS reallocate its support for talent development to different, as yet unspecified, streams.

What is known is that by March next year the vast majority of government support for the industrial partnerships will stop, leaving industry leaders to decide whether they can make up the shortfall.

Nick Ellins, recently appointed chief executive of Energy & Utility Skills, which runs the EEIP, says he is “heartened” by the sentiment he has seen expressed so far by chief executives. He’s also pragmatic about playing “the cards we’ve been dealt” and “making it work” – in spite of uncertainties such as the detail of the new apprenticeships levy and a change of leadership for the EEIP itself after  the resignation of its chair Steve Holliday, the outgoing chief executive of National Grid.

Ellins’ optimism and the goodwill of industry leaders who value the work of the EEIP are reassuring. We must hope they are enough to sustain a critical part of this sector’s skills infrastructure.