Two weeks on from the announcement in the Budget of an apprenticeship levy, there are many questions which need to be answered by the government. Employers in the advanced manufacturing and engineering sector need to be able to plan ahead if they are to meet their own skills needs, and if they do not adequately understand the ramifications of this policy ahead of its introduction they will find it difficult to do that planning.
We still don’t know whether the levy will apply in England only, in England and Wales, or in all four of the UK nations. If it is to apply across all four nations, we don’t know how it will be collected and distributed; if the UK government takes it upon itself to distribute the cash, there will be obvious knock-on effects to the apprenticeship policies already laid out by the devolved administrations in Scotland, Wales and Northern Ireland. If it only applies in England, meanwhile, we don’t know whether employers will be able to claim from the fund for their apprentices in other UK nations.
Before the Budget, Semta cautioned a further cut to the further education budget on the advanced manufacturing and engineering sector. In the end no such cut announced in the speech itself or in the Treasury's Red Book. However, there was one surprise announcement that could have a real impact for our sector and which, at first glance, seems to be more applicable to other sectors than to our own: the apprenticeship levy on large employers.
Large employers in advanced manufacturing and engineering already understand the value of apprentices and invest huge amounts of time and money in their programmes. I know from experience that captains of industry see their apprentices as loyal, enthusiastic and capable. In fact many of them like our own Chairman started their careers as apprentices. They don't need to be incentivised to take on apprentices with a levy, because they already see apprentices as the way to grow their own talent. That's why BAE Systems, for example, has pledged to take on 710 apprentices this year (a new record for the company); it's why 30% of Rolls Royce's senior management team started out with the company as apprentices; it's why Airbus was the first company, back in 1998, to introduce a Higher Apprenticeship. It's thanks to companies like these that while just 10% of the whole UK workforce has completed an apprenticeship, 26% of those in advanced manufacturing and engineering have done so.
Next Wednesday's 'Emergency' Budget has been widely speculated and commented on; commentators and politicians all have their own views on what will and will not be included, and what the impact of the changes that are and aren't included will be.
We already know that, under the flag of deficit reduction, the government will be making a further £450m cut to the budget of the Department of Business, Innovation and Skills (BIS) and a similar cut to the Department for Education budget – cuts which, when combined with the target of three million new apprenticeships during this Parliament, could have severe repercussions for all non-apprenticeship and school-related skills funding.
Today is National Women in Engineering Day, and the response from across the world of engineering has been hugely encouraging and positive. So many companies - big and small - are holding events, publicising their support on social media and showcasing the talented women they have working for them.
We are starting from a low base, with just 7% of the engineering workforce being female, but even here there are grounds for optimism, with that representing a 10% rise since 2011 – and the more women we start to see entering and returning to the sector, the more inspired to consider a career in engineering other girls and women will be. Encouragingly, over half of pupils taking Physics at GCSE are female – but with only around a fifth of A Level Physics students being female, it's clear that more needs to be done to encourage girls with an aptitude for and interest in science and engineering to progress.
You may have missed it as it came on a Sunday, but yesterday (14 June) the government made a policy announcement on apprenticeships with potentially major ramifications for employers across all sectors of the economy, and especially for those in the advanced manufacturing and engineering (AME) sector which Semta represents.
The term 'apprenticeship' is to be protected in law and apprenticeships are to be given 'equal' treatment to degrees. What that equal treatment will look like in practice, we will have to wait and see as the government rolls out the Enterprise Bill in which this provision will be written.
The government's commitment to 3 million new Apprenticeship starts by 2020 must be applauded. Despite very few MPs having started out as apprentices, there appears to be a groundswell of parliamentary support and a clear recognition that Apprenticeships provide employers with a route to meeting their skills' needs and offer young people a route to career success, progression and reward.
While this commitment is to be welcomed, focusing solely on hitting a numerical target could have unintended consequences – i.e. a reduction in quality. We know from the figures over the last two academic years that the number of Apprenticeship starts dropped significantly following the introduction of a minimum 12 month duration. It could be argued that a simple way to reverse the decline in the number of starts would be to reduce the minimum duration.
Short Apprenticeships and/or those without a recognised qualification or formal assessment points could help ensure the target is met, but where does this really get us? These 'sub-standard' Apprenticeships are unlikely to meet the needs of employers or young people, and serve to devalue the Apprenticeship programmes that are genuinely robust.
With May 7th now looming large on the horizon, the election campaign has really sprung into life. Politicians have been pounding the pavements and taking to the airwaves to deliver their messages, and the parties have launched manifestos setting out their vision for what our country will look like if they are in the new government.
At Semta, we also have a vision for the next five years. Our new Skills Vision document sets out the agenda that we, and employers in the advanced manufacturing and engineering sector, would like to see the next government pursuing on skills.
We will be launching our Skills Vision as soon as the next government is formed, because the next government will need to hit the ground running if it is to meet the skills challenges in our sector. From day one we will be ready and willing to work with the next government, whichever parties it might be comprised of and whichever politicians are given ministerial boxes, to ensure that our sector has a workforce with the mix of skills it needs to thrive.
The coming general election is one of the most open in recent times, and nobody can quite be sure what the make-up of the Commons is going to look like come 8 May. That’s why it’s heartening that all three of the major parties – Conservatives, Labour and Liberal Democrats – are making positive noises about engineering and manufacturing. All three are also signed up to a further expansion of apprenticeships, which will help to give employers the confidence to invest in them.
I’m delighted to say that our second Semta Skills Awards, held on Tuesday evening at the Park Plaza Riverbank in London, was another resounding success. I was thrilled by the number of attendees who referred to the night as a party which truly reflects the celebratory atmosphere.
It’s so important to stop and take stock of the fantastic achievements of our sector and the amazing people that work in it. As Matthew Hancock, Minister of State for Business, Enterprise and Energy, said on the night, the nation’s historical engineers were “the rock stars of their day” and we need to regain this buzz around engineering and advanced manufacturing. I hope you agree that the Semta Skills Awards play an important role in celebrating the ‘stars’ of our sector.
I hope after reading this blog you will agree to being part of the solution to a problem we all share:
We all recognise this is the challenge that we have and are actively working to solve it.
Whilst we are all focused on achieving this we are missing the hidden skills gap in STEM – who is going to teach, train and mentor our future recruits?
Far from a glamorous getaway for the business and political elite, the World Economic Forum (WEF) at Davos is the culmination of intensive year-round work to improve lives on a truly global scale.
Arriving late on the Tuesday afternoon, I steeled myself for three days of speeches, workshops, panels and impromptu meetings ahead. You never know quite who you’re going to meet, but you CAN rely on the – perhaps unique – opportunity that Davos affords to interact, debate and work with fellow international business and political leaders.
The WEF’s official motto – committed to improving the state of the world – feels both grand and ambitious, but in truth, there is a real sense of coming together for the greater good of a challenging and changing world that is both inspiring and heartening.
Welcome to the New Year and I’m delighted to begin my tenure as the new CEO of Semta.
Firstly, I’d like to take this opportunity to thank Sarah Sillars for her great leadership over the last two years, it has been a pleasure to work with Sarah and I’m delighted to be taking up the baton at this exciting juncture.
I bring with me 22 years experience of working in the engineering sector, 16 of which have been with Semta. My passion for engineering was ignited at an early age, stemming from my family history – two generations of engineers go before me – and my upbringing in Teesside’s industrial heartland. I fully appreciate the skills challenges facing the engineering and advanced manufacturing sector and am committed to ensuring that Semta plays its part in helping our employers overcome these.