Written evidence from the Engineering and Building Services Skills Authority (EBSSA) (SFF0117)

Introduction:

  1. This written evidence is submitted on behalf of the organisations which, taken together, form the Engineering and Building Services Skills Authority (EBSSA). EBSSA is an alliance of trade and professional bodies with an interest in skills development and competence improvement across the whole of engineering services (i.e. including mechanical, electrical, plumbing, thermal insulation and related specialisms).
  2. Key objectives of this skills coalition are to provide analysis based on transparent data on the sector skills demand and supply, and utilise this evidence to highlight needs, educate, influence policy makers and providers to close the skills shortage gaps with measurable interventions.  EBSSA members are not covered by neither CITB (Construction Industry Training Board) nor ECITB (Engineering Construction Industry Training Board). It is therefore of paramount importance that the skill needs of our sectors are reliably represented and communicated.
  3. Underpinning this work is a shared commitment to support the transformation towards a safer and healthier built environment and achieving UK’s net zero targets within both domestic and non-domestic buildings. This involves commitment and collaboration from right across engineering and building services, including employers, trade union representatives, other specialist trade bodies, certification organisations, professional institutions, education and government (across the UK).
  4. Currently, EBSSA members are contributing significantly to the development of installer competence frameworks, creation of new qualifications & apprenticeship frameworks and the coordination of training and skills provision. This work is in support of wider government and industry efforts – led by the Building Safety Regulator and Industry Competence Committee – to improve competence, training and assessment standards in the built environment. We are driving progress through the Engineering Services Super Sector, working with around two dozen different sector-specific groups, and reporting up to Working Group 2: Installers (WG2) and the Industry Competence Steering Group.
  5. All EBSSA members are listed in the Appendix, together with links to further online information about the EBSSA coalition and our work.

 

  1. Summary of our key points:

 

Answers to inquiry questions:

1. What kinds of skills do you think will be needed for the future of the UK economy?

Is the UK’s skills and training system capable of equipping increasing numbers of people with these skills?

  1. Within the built environment, skilled trades will remain essential, their work assisted and enhanced by digital technologies, but not replaced by them. The current skills and training system in England is poorly equipped to maintain existing levels of skilled tradespeople, let alone fulfil demands to grow this element of the workforce in order to meet net zero, infrastructure, housing and other strategic objectives.
  2. This failure is long-standing and systemic, with pre-July 2024 education policies in England showing only limited signs of helping to improve the situation.
  3. The main funded route is apprenticeships and the Further Education (FE) colleges; the latter being underfunded to provide the training and skills with the latest technology for facilities and teachers / assessors. Focus is not on employers needs but more on financial viability - understandable given the lack of investment in the Further Education (FE) sector.
  4.                     In addition to the increased demand for these occupations expected, these sectors also have to deal with an ageing workforce.
  5.                     However, where there is industry-led approach, there are more opportunities to address these challenges. For example, Thermal Insulation as with wider Construction industry has an ageing workforce with approximately 30% of the workforce set to retire in the next 10-15 years. Not only does this workforce need replacing but all Thermal Insulation contractors have more work than they have labour to fulfil it. TICA (the Thermal Insulation Contractors Association) have doubled the number of Apprentices joining the industry over the last 3 years and have calculated (via data on the skills card scheme they own) that this will replace the ageing workforce. However, there is still work to do to grow the skilled workforce to meet industry demand. TICA recently reviewed the Apprenticeships Standards for Thermal Insulation (via IfATE), and there are now clear routes to competency mapped out via Working Group 2 (WG2, see CLC Competences project[2]). These developments mean that for this particular sector there will be a skills system in place which can meet demand for skilling people as needed. However, the issues remain as to whether the employers will have the financial capacity to invest in training and skills.

 

2. What is the appropriate level of government intervention in the development of skills policies?

What should the Government’s proposed post-16 education strategy include in relation to apprenticeships and training?

  1.                     Employers and industry need to be at the heart of the system. In England, messaging about the role of employers, in particular, has been confused and contradictory. On the one hand, it is asserted that the system aims to be ‘employer-led’, with frequent appeals for employers to ‘support’ and ‘engage with’ education. On the other hand – with the exception of apprenticeships – education policies and delivery in England are for the most part determined by the Department for Education, in consort with the education sector, with employer involvement (at least as far as SMEs are concerned) little more than an afterthought. As a consequence, centrally-determined policies such as Bootcamps and T levels often land badly with employers in the sectors which these policies are intended to serve, conflicting with – and potentially undermining – employers’ own preferred occupational standards and training routes. For example, T-levels are highly reliant on employers (mainly small and micro) offering placements that they do not have the bandwidth to manage - this needs to be redesigned.
  2.                     The full time post-16 landscape in FE Colleges, in particular, needs to be reviewed, in some instances full time Level 1 and Level 2 courses have very poor progression routes for learners joining that vocation and/or progressing to a relevant Apprenticeship. Currently, only 11% of those 16 - 18 year-olds undertaking full time building services courses actually end up in industry. In the electrical sector, for example, enrolments onto publicly funded classroom-only electrical courses outnumber electrical apprentice starts each year by 300%. Typically, fewer than 10% of these college-based learners subsequently progress into an apprenticeship to complete their education as electricians. In some places – certain London boroughs, for example – progression rates fall below 5%. Moreover, the recent decline in take up of plumbing apprenticeships has started having implications for the wider sector.
  3.                     In addition, we see some Awarding Organisations still using out-of-date qualifications that go against competency and apprenticeships but still recruit learners, with colleges and private training providers marketing them for financial gain. These older qualifications should be withdrawn to remove confusion that learners face when selecting a program of competency.
  4.                     In skilled trade sectors characterised by occupational labour markets and high proportions of SMEs, it should be for the sectors, in particular specialist sector representative organisations, ie. trade association and bodies, themselves to define competence requirements for each occupation. Awarding organisations and training providers should then work with each sector to develop and maintain training routes which lead to occupational competence – preferably via an apprenticeship or similar substantially work-based programme. We need to ensure industry experts are in place for the delivery of the training and assessments and that Awarding Organisation’s (AOs) criteria of a trainer/assessor is agreed and upheld by industry and not the AOs or training providers. 
  5.                     We are still to see how the new Government will connect in practice the industrial strategy with the education and skills sector in order to deliver the outcomes needed. In our opinion, Government should ensure that sectors and education collaborate in the manner outlined above, and support sector-recognised training routes through provision of funding – including the withholding of funding from any training routes not endorsed by the sector. Government should also focus their efforts on raising the profile of Apprenticeships with young people and employers and consider more incentives and support for employers to take Apprentices. 
  6.                     The Department(s) and/or agencies responsible for skills should ensure that other Departments with responsibilities which impact on skills are also supportive and coordinated. Current procurement, employment, tax/ national insurance, building safety and net zero policies, for example, all have the potential either to reinforce sector-recognised competence standards and effective skills development. Devolved governments (in Wales, for example) are generally more comprehending and supportive.

 

 

3. Are existing Government policies on skills, particularly apprenticeships and training, sufficiently clear?

Have policies, funding, and the institutional set-up been sufficiently consistent over time?

If not, what changes or reforms would you recommend?

  1.                     Apprenticeships in England, overseen by IfATE, can broadly be described as working well. Within our sector, for example, electrical apprentice numbers (those starting an apprenticeship) have grown substantially over the past three years, with the Installation and Maintenance Electrician Apprenticeship currently boasting the highest take up of any apprenticeship, and 80% of these starts recruited by firms too small to pay the Government’s apprenticeship levy. As mentioned in our answer to Q1, industry involvement in the thermal insulation sector has also seen increase in apprenticeship starts). IfATE’s occupational maps are also a welcome attempt to reintroduce structure and coherence where for many years previously there had been fragmentation and confusion.
  2.                     However, this employer-endorsed system sits alongside a parallel government-sponsored and provider-led system – of FE college-based, classroom-only courses and qualifications – which delivers very little of value either to employers or to learners hoping eventually to secure employment – see examples mentioned in our answer to Q2.
  3.                     Navigation of the education landscape for business is difficult; devolved approaches sometimes add complexity.  The majority of businesses that are able to take on apprentices or need workers trained to deliver as engineers are SMEs and micro, so this needs to be simplified.
  4.                     Private training providers, employers and learners need consistency and stability. While the policies on skills and training relating to Apprenticeship have been clear, they have also been subject to change (and will change again following new Government and policies). Funding rules can be similarly complex to follow. In England, the Education and Skills Funding Agency provided very little support with the navigation of the system and providers were usually just directed to weblinks. This is an area of improvement that Skills England could look into.
  5.                     T-levels were intended to replace a dysfunctional system from September 2024 but are themselves flawed in their design – at least for skilled trade sectors such as those within EBSSA. Despite warnings for many years from these sectors about the difficulties of supporting 45-day work placements when 99.3% of all firms are small or microbusinesses, the previous Government pressed ahead with implementation on a ‘one-size-fits-all’ basis. Predictably, take up in our sector-related T-level by providers has been low.
  6.                     We require a single, joined up skills system in England with apprenticeships and similar work-based training routes at its heart. As in those countries with the most successful skills systems – such as Scandinavia, Benelux and German-speaking nations – industry needs to play a central role in defining standards and working with providers to improve curriculum content and delivery, rather being cut out or marginalised by central government.
  7.                     The system can and should accommodate different entry points – including classroom-only knowledge courses (as in Wales) and/or shorter pre-apprenticeship courses (as in Scotland), in addition to direct entry into an apprenticeship; but in each case all should be aligned to the same industry-recognised standard and with the goal and presumption of progression to fully qualified, competent trade status. Success should be measured not by reference to the number of stand-alone qualifications delivered, but by the number and proportion of learners achieving this fully qualified status in the end. Such a system will be able to link and deliver as part of the industrial strategy.

 

4. Are the right institutions in place to ensure an effective skills system for the future? Should co-ordinating institutions be national, regional, or sectoral, or a mixture of each? What is your view of Government’s proposal to establish a new body, Skills England?

  1.                     As mentioned in answers to the Questions above, the education system needs to be reformed and an overarching body (such as Skills England), if it streamlines the initiatives and funding routes to ensure easier engagement with industry and training provision, would be very welcome. We believe that the system should be mixture of national, regional and sectorial depending on the nature of the industry and discipline. For example, for a small and niche industry, a national approach (for funding) may be more viable; for lager sectors, a more regional-based approach can be more beneficial.
  2.                     Clearly there is a role for the centre in setting national skills priorities and an overarching framework for technical qualifications, funding, quality assurance, etc. Given the importance of skills for national economic development, productivity improvement and other strategic objectives, this central function should not just sit within the Department for Education but, preferably, into a dedicated entity (or another Department?) focussed on human capital development (such as Singapore’s Ministry of Manpower) – or as part of the industrial strategy implementation (the Industrial Strategy Council?).
  3.                     The pace of skills devolution should continue, to give combined authorities the power and resources they need to achieve their regional priorities. However, the setting of competence standards and qualifications should remain a national function, to avoid setting up disruptive (and unnecessary) barriers for businesses and individuals wishing to operate in different areas.
  4.                     It is very important that the new system has input from the industries at its heart. As we mentioned in our answers to the Qs above, engagement with industry should be paramount. For our industries, via Trade Associations, the right institutions are in place to ensure an effective skills system. EBSSA members are proactive in driving the industry forward and working with the wider industry to align with latest agendas e.g. Building Safety Act and routes to professional and technical competency. Moreover, as mentioned before, our involvement in apprenticeships has also resulted in increased numbers.

 

5. What should be the role of businesses in encouraging the development of skills in the UK?

Should businesses be a consumer, funder, trainer, or co-designer of skills provision?

  1.                     Industry skills leadership is the model adopted throughout much of northern and north-western Europe - countries with successful skills systems, eg. Scandinavia, Benelux and German-speaking nations. Industry needs to play a central role in defining standards and working with providers to improve curriculum content and delivery. Industry helps to embed skills into the broader business system, rather than becoming separate, which in large part is where the present English system find itself. This in turn strengthens the links between education and industry, to the benefit of both, facilitating the establishment of a high skill, high productivity economy, in contrast to the low skill, low productivity dead-end.
  2.                     In order to achieve this level of effective industry engagement, business involvement should also be strengthened and structured – not as with the previous Government, where the Department for Education hand-picking some individuals to give an appearance of ‘employer’ and/or ‘SME’ buy-in (as occurred on some of the original T-level employer panels) – but through recognition of effective sectoral skills bodies where these already exist, and encouragement to sectors to build up such bodies where currently they do not exist or require strengthening. As we mentioned in our introduction, EBSSA was formed to strengthen such representation from our industries.
  3.                     Business could fulfil all these roles: consumer, funder, trainer and co-designer of skills. However, in our experience, businesses that rely on a subcontract labour (as in the construction industry) rather than employing people by their very nature do not invest/support these aspects or their supply chain. In sectors with large proportion of SMEs, businesses rely on Trade Associations to be their voice as the labour market does not provide the time for them to be engaged. Some small businesses can train but to achieve qualifications levels, third-party validation is essential.
  4.                     Where the will is there by industry to be a co-designer, then industry should be given the power and responsibility to play that role – through Government recognition and support for the sectoral institutions described above. Awarding Organisations should be accountable for their trade developments and offerings through industry and not develop competing, conflicting outcomes for financial gains or have conflicts of interest across aligned businesses. 
  5.                     Example of good practice within the EBSSA sectors are existing institutions such as the Electrotechnical Skills Partnership (TESP), which ensures that the sector already plays an active role (as the current system permits) and it is regarded as a valuable partner by the likes of IfATE. The recent 30%+ growth in Installation Electrician/ Maintenance Electrician starts – recipient of the Coronation Green Apprenticeships emblem and enjoying the highest take up of any standard in England – is in some considerable measure down to the role TESP has played in shaping that standard and then ensuring that other elements of the business system align with and support it. Where TESP and the broader electrical sector given the opportunity to expand industry involvement even further, even more can be achieved. We could possibly replicate the success of our equivalent body in Denmark, which over the past decade has managed to achieve sustained growth of 80% in their electrical apprentice starts. In Sweden, our equivalent organisation has recently been allowed to open its own trade college, with widespread employer backing.

 

 

6. What incentives do employers have to provide training for their employees?

Why do you think that employer investment in training has declined in recent decades?

  1.                     The precise factors driving a decline in training investment will almost certainly vary by sector, and so developing answers also needs to be a sector-based activity, albeit with feed back to the centre on possible supportive changes to national policy.
  2.                     In construction and the built environment, for example, employer investment has declined as an employed workforce has also declined. There are no incentives (fiscal or other) for investment in their people and training.
  3.                     We have seen in the wider business system that investment in training has become a largely voluntary activity, and ‘free-riders’ (i.e. businesses which opt not to train) are often at a competitive advantage over those which continue to train. In a market where labour is short, skilled resources are hugely valued. The standard approach of "buying in" has resulted in increased sub-contracted model with smaller businesses providing labour only. These skills are costly to provide and quick to lose as people leave for increased pay rates.
  4.                     In our industries overwhelming evidence points to ‘survivalist’ business models – driven by radical commercial and labour market deregulation and the excessive transfer of risk and uncertainty down to lower tier contractors and the workforce[3]. This, combined with the skills system becoming decoupled from industry (as outlined above), has led to our current paradoxical position, where businesses complain about persistent and worsening skills shortages, whilst learners in their tens of thousands struggle to progress from college courses into apprenticeships or other industry employment.

7. Should further incentives be put in place to reverse the decline in employer investment in training, and if so, what form should these incentives take?

Do smaller employers need greater support to access skills provision, and what form should this support take?

  1.                     Financial incentives and other practical support measures certainly have a role to play, especially for the SME employers who lack some of the human and material resources required to mentor and supervise an apprentice in line with current expectations, especially in the first one or two years. Given that the proportion and number of such businesses have expanded over the past twenty years, getting more of them to begin taking on apprentices is an important element in achieving the badly needed growth in overall starts. Until the labour market improves, smaller employers will continue to need support to upskill, especially in the new technologies needed for net zero within this industry.
  2.                     In a construction and built environment context wider ranging changes are also required. These include further commercial reforms, covering long-standing issues such as retentions and late payment, to bring the UK into line with Europe and Australasia, where subcontractors are not nearly so vulnerable to contractual abuses by higher tier contractors and clients. Artificially inflated levels of self-employment, the product of overly permissive employment status arrangements (both for social security and employment rights purposes), also need to be brought back to more natural and sustainable levels. Finally, public procurement social value provisions require further refinement to incentivise firms to invest in workforce training and competence as a matter of everyday business, and not merely in order to win and deliver a particular contract, whilst continuing to operate as a ‘free-rider’ everywhere else.

 

8. Concerns have been raised over the operation of the Apprenticeship Levy, particularly in relation to the decline in young people taking on apprenticeships.

Is there a case for reforming the levy, for example by ring-fencing more levy funding for training for younger apprentices?

If so, what portion of Levy funding should be ring-fenced, and for what ages and levels of qualification?

  1.                     The Apprenticeship Levy should be open to all age groups and any ring fencing by age would not be of benefit or increase the take up for younger apprentices. As we explained in our answers above, the reasons for decline in young people taking apprenticeships should be examined in the context of industry-structures (ie. sectors with high proportion of SMEs), training provision and advice available (from DfE/ FE), employers involvement and entry-level qualifications – see our answers to Q 2. 
  2.                     However, we do see some benefit in restricting the ability of large, levy-paying organisations to rebadge existing management development training as ‘apprenticeships’ and/or moving funding of degree apprenticeships into the HE budget and not from the levy. Larger businesses have used the levy as a mechanism to train their management staff, rather than new entrants.

 

9. Should the Apprenticeship Levy be made more flexible, allowing funds to be used for shorter courses?

What is your view of the Government’s proposals for a Growth and Skills Levy?

  1.                     There are serious concerns about these proposals from our sector.

 

  1.                     Frist of all, 50% on non-apprenticeship training is too much and - unless the amount of money raised through the levy is substantially increased - will inevitably bring about rationing and/or cuts in apprentice numbers at just the time when we need more people starting apprenticeships, not fewer. SMEs account for the vast majority of apprentice starts in the built environment (e.g. 80% of electrical apprentices are recruited by firms too small to pay the levy), and will therefore suffer if larger, levy-paying firms are permitted to use up more levy money on other types of training.
  2.                     In the absence of a substantial increase in levy receipts, any flexibilities therefore need to be tightly circumscribed and agreed with relevant industry stakeholders (e.g. Skills Partnerships in engineering services). One possibility could be to restrict levy funding to training equivalent to apprenticeships (i.e. leading to full occupational competence): for example, NVQ and/or Experienced Worker routes for adults. Another might be to allocate a proportion of levy receipts to pre-apprenticeships, which have proved very popular with learners and employers alike in the electrical contracting industry in Scotland.
  3.                     There are significant risks if allowing the levy to be spent on shorter courses, that it will just encourage commercialisation of training that does not meet the needs of individuals or businesses. Moreover, there should be clear that these ‘short courses’ are not shorter alternatives for formal qualification routes.
  4.                     Businesses that pay into the Levy are large enough to finance short courses outside of the levy pot. If the levy pot for Apprenticeships is reduced, then non levy-employers (smaller employers) will disproportionately suffer in our sector as they often train the most Apprentices.
  5.                     There is also the issue of trade courses being offered online by rogue training companies, most of them simply fraudulent. This is a wider concern for any funding flexibility offered; this is why we believe strongly that each industry should advise education provision on what is acceptable as training & qualifications and values them as such.

 

10. What is your view of the Government’s proposals for a youth guarantee of access to training, apprenticeships, and employment support?

If a guarantee was to be introduced, which institutions should be responsible for providing it and would they need additional resources or powers to do so?

  1.                     This type of support is needed, if it is to ensure a full time learner ends up in the industry as FE have failed at this in our sector. The government should definitely do more to support employers/young people and raise the profile/make it easier to take Apprentices. Trade Associations are uniquely placed to assist by being the "glue" between education and business and help with designing how the Guarantee can work for each sector.
  2.                     The main risk is that, without sector support, a youth guarantee would be difficult to implement and mandate with many employers who do not have the skills or resources to provide placements and therefore the guarantee ends as acting more of as a stick than an incentive.

 

11. Should further education be funded in a demand-led way, as is the case in higher education?

Is such a shift practical, and would it be necessary to provide a youth guarantee of access to training?

  1.                     Yes, FE should be funded in a demand-led way, but only if linked with industrial strategy and sectoral strategic input. Otherwise, this risks to become a license for educational institutions to fill classrooms with learners with no reasonable prospect of progressing into related employment, putting on courses designed without reference to industry competence standards or employer buy in.
  2.                     In the electrical sector, for example, already in England three times as many learners enrol each year on publicly funded classroom-based electrical courses as start for an electrical apprenticeship: an imbalance which balloons to five times as many in Manchester, six times in Birmingham and eight times in London. As mentioned before, barely 10% of these classroom-based learners subsequently progress into an apprenticeship, a proportion which almost certainly drops to around 5% or less in these and other metropolitan centres.
  3.                     If such a guarantee were to be introduced, funding to support it should be allocated to those providers best equipped to deliver progression into skilled employment, regardless of whether these are FE colleges or independent training providers. Success needs to be measured according to this metric, not mere delivery of stand-alone, potentially dead-end classroom-based qualifications.

 

12. How does the UK’s approach to skills and training compare to those of other countries?

Are there examples of good practice that the UK should be learning from?

  1.                     In the context of the construction, skills and training goes hand in hand with employment. Most construction trades are now heavily weighted in the UK with self-employed operatives hence driving a skills and training shortage. With the partial exception of the apprenticeship system overseen by IfATE, England’s general skills performance compares poorly with others, in our experience.
  2.                     The European model of consistent and well understood Apprenticeships in vocational trades means that a career in construction is attractive, valued, employees are retained and have long careers within the same industry.
  3.                     Good practice examples include:

 


APPENDIX

Engineering & Building Services Skills Authority (EBSSA) members:

Actuate UK: an engineering services industry alliance which comprises of:

BEAMA: the UK trade association for manufacturers and providers of energy infrastructure technologies and systems.

The Chartered Institute of Plumbing and Heating Engineering (CIPHE): the only professional body for the UK plumbing and heating industry.

MCS: a standards organisation that creates and maintains standards that allows for the certification of products, installers and their installations.

The Thermal Insulation Contractors Association (TICA): representing its members in the industrial and commercial insulation sector since 1957.

Website: https://www.actuateuk.org.uk/resources/ebssa/

30 September 2024

 

16

 


[1] These sectors have also been singled out and reviewed in the recent Skills England report Driving Growth and Widening Opportunities: https://www.gov.uk/government/publications/skills-england-report-driving-growth-and-widening-opportunities

[2] https://www.constructionleadershipcouncil.co.uk/workstream/people-and-skills/competence/

[3] Construction typically has highly cyclical and unpredictable profit margins and therefore struggles to invest in skills and innovation. High rates of sub-contracting and self-employment also disincentivise employer investment in training for on-site workers. The UK construction industry and supply chain is currently highly fragmented and lacks transparency.”, p.58, Skills England: Driving Growth and widening opportunities.