Why we have to meet the skills gap

Jun 10 2008 by Sue Scott, Evening Gazette

TEESSIDE fought long and hard to bring the £10m National Skills Academy for the Process Industries to the region. But that was just half the battle. Now it must be clear about what it wants new chief executive Philip Jones to deliver. SUE SCOTT reports.

WITHIN days of getting his feet under the desk, Philip Jones had an inbox full of emails with personal messages of support from some of the most powerful people in the process industry.

If you’d put a match to the cocktail of chemical companies listed in his address book, you’d have blown up half of Teesside.

Response to his appointment as the first chief to lead the new National Skills Academy for the Process Industries surprised even the man himself.

“Mood in the industry is incredibly high,” he said. “There’s a fantastic desire to help support and drive the thing forward.”

That doesn’t mean the role comes without challenges. The raison d’etre for the academy, after all, was a recognition that without it the industry faced a slow starvation of the skills it needed to survive. And, nationally, it has a formidable appetite. To sustain growth at current rates, it’s predicted to need 48,000 recruits by 2015.

And, given the current economic climate, maintaining that growth has become crucial. Processing has been the jewel in the UK industry’s crown for the past 10 years, demonstrating the fastest growth of any sector, attaining an average rate of 2.6% per annum.

Around quarter of that growth is centred on the North-east where the sector represents 30% of the region’s industrial base. And on Teesside the figures distill down even further, so that the three main pillars of the sector - pharma, chemicals and polymers - contribute 60% of the local economy’s GDP, while biofuels, a newcomer to the stable, is forecast to be worth £1bn to the North-east over the next 20 years.

As far as Teesside was concerned it was always the natural home for the skills academy, although it was by no means an odds-on certainty that the region would win it - the North-west very nearly pipped it to the post.

Business development manager Ian Mains said: “The North-east lobbied for it and won it. They know the reasons for having it: upskilling and the demographic problems that the industry has been suffering from.”

Now, along with the rest of the process industry nationwide, they must help fund it and, given the disproportionate demographics, most of that money will come from the North-east.

“We are financed by three funding streams but we have got to move towards primary industry support,” explained Mr Mains. And quickly.

The business plan, which is still in development, has a pencilled-in target of 2011, by which time the academy needs to generate £1.5m annually from private enterprise to support its activities. With nearly 90% of the processing industry made up of SMEs, the academy must avoid the bear trap of becoming enthral to the biggest players with the fattest wallets.

“It needs to be geographically composed and industry composed,” said Mr Jones. “We have to make sure all the industries are covered.”

In order to achieve that, the academy has enlisted the assistance of two of the most influential and respected campaigners in the fight to bring the hub to Teesside - George Rafferty of NOF Energy, who will lead the North-east board, and Stan Higgins of the cluster group NEPIC, which will have partner status. “The first thing firms on the ground will notice is that they have a focus,” said Mr Jones.

Already, the regional spokes are beginning to turn in the four outposts that will be in place by the end of the academy’s first year. The North-east, Yorkshire and Humber, the North-west and the Midlands, will have their own industry-led boards, reporting to the Teesside hub, which has a physical presence in |Mr Jones’ sparsely decorated office on the second floor of Teesside University’s Innovation Centre. In year two, it aims to set up spokes in the South-east and East, the South-west and Wales, and Scotland and Northern Ireland.

“Spokes are the voices in the regions,” said Mr Jones. “Over the next couple of months we will be setting up industry-led regional advisory groups who will decide the specific needs of those regions. The footprints in each are different, but we, in the North-east, are the strongest in terms of finance.”

Whatever their make-up, the boards share the same aim: to avoid a 25% skills gap opening up between the UK and the US, the sector’s leading producer - against whom all yardsticks in the industry are measured - by 2016.

“If we do not meet the skills gap, companies will move out. Most of them are internationally owned - they will simply take their business elsewhere,” said Mr Jones.

Nationally, the industry spends £650m on training, but not all of it is accredited and one of the first tasks of the academy is to quantify the level and quality of the training on offer.

The “quick wins” will be accrediting the large amount of in-house training already taking place.

“It’s not just taking general qualifications, but making them specific to the industries.”

The recruitment of young people is core to its strategy.

“The academy is focusing on the 14-19 agenda which links to what the clusters are doing,” said Mr Mains. “The recruitment of young people into the industry is key.”

It also ties in neatly with the Government’s agenda for moving mainstream education towards work-based diplomas.

Within five years it aims to have 170 accredited training centres in the UK across the three subsectors, although Mr Jones admits that he’s a man in search of answers. “What is the capacity of the industry and the training providers? That’s known by each, but not on an aggregate basis.”

Concentrating the mind of the process industry on Teesside has other advantages for the sector.

“We are a national voice for the industry so we can leverage funding that has not been leveraged before, whether that’s from the Learning and Skills Council or regional development agencies, we will hopefully be able to increase what is available,” said Mr Jones. The North-east process sector, he says, was punching above its weight even before the academy arrived. NEPIC has already leveraged £3m worth of funding - 10 times what most clusters achieve.

“We have a huge amount of support already. Keeping companies engaged and delivering to them is our biggest challenge,” he said.