Written evidence submitted by the Chartered Management Institute (WFP0095)

1. Does the Government have an appropriate understanding of the skill needs to deliver the Clean Energy Mission by 2030 as well as decarbonise homes and businesses?

The Chartered Management Institute is the UK’s chartered professional body for managers. Backed by a Royal Charter, CMI is the only organisation able to award ‘Chartered Manager’ status. We have a membership community of over 220,000 aspiring and practising managers and more than 150,000 people are currently studying on one of our management and leadership programmes. We work across the public sector, and with businesses and educators to develop more skilled, confident and successful managers and leaders. Working with nearly 850 partners to deliver our qualifications, alongside 150 universities and 500 Further Education colleges, independent training providers and employers.

We are participating in this inquiry as we believe it helpful for the Committee to consider how a lack of green management skills impacted the Green Homes Grant voucher scheme’s ability to deliver on its promised home energy upgrades. Did suppliers of the scheme have the green management skills needed to adequately audit the skills deficits in their workforce, identify gaps and create a viable roadmap to addressing those needs? Did they have the skills to ensure adequate public awareness of the scheme, communication of the programme goals to customers, and ultimately its successful delivery? 

In order for the UK’s clean, secure energy mission to be successful the current and future workforce will need the right skills, at the right level, across all ages. This means that the workforce will require a range of different skills that go beyond what many would consider to be ‘green skills’. In addition to industry specialists and technical skills, successful delivery of the Clean Energy Mission requires people with broader skills, such as management and people skills.[1] Management and leadership skills are at the core of every job, particularly in this mission. CMI analysis of Lightcast job posting data shows that for the period December 2023 to December 2024, management was the second highest common skill required for jobs in electricity generation, with leadership being the sixth highest common skill needed.

According to the Climate Change Committee’s Net Zero Workforce Report, it is estimated that between 135,000 and 725,000 net new jobs could be created by 2030 in low-carbon sectors, such as buildings retrofit, renewable energy generation and the manufacture of electric vehicles[2]. Using CMI's modelling based on 1 in 4 jobs being management jobs, this could mean the creation of between 33,750 and 181,250 new management jobs in the same low carbon sectors. Research from CMI’s Better Management report found that 82% of managers who enter management positions have not had any formal management and leadership training – they are “accidental managers”. This reality will extend into the UK’s needs across the green energy sector and the wider national shift to net-zero if we don’t invest in filling this skills gap.

Furthermore, the UK skills and training system needs to be able to equip managers and leaders with green management skills to facilitate the delivery of this mission. CMI defines green management skills as competencies managers need to effectively deliver organisational and business outcomes in a way that meets legal requirements and wider economic, political and social stakeholder expectations. With confident green management skills, businesses will be better equipped to take advantage of the opportunities that will come from a greener economy, leading to increased individual, firm-level and national productivity and economic growth.

2. How might the Government ensure that the job market in clean energy roles is sustainable enough to incentivise private sector investment in training for 2030 and beyond?

Investment in the core skills employers need the most, particularly at higher levels, is vital if they are to ensure the skills supply is there to meet the growing demands of the clean energy mission. However, employers find themselves on the sharp end of skills shortages at a time of added costs. Sourcing the bandwidth and the funding to first identify and then fund their emerging skills shortages has largely fallen down the priority list.

Those entering the job market will also need a better understanding of what the pathways are to accessing a green job or career. For those just entering the market from school or university, a key barrier is the lack of access to additional information and support on green jobs and careers. According to World Skills UK, around 6 in 10 young people would find information on green career options (61%) or information on what green skills are (59%) to be most helpful.[3] Just 7% said they would like no information or support at all. For those already in the workforce, especially those in sunset jobs or industries, it will be important for employers to have an understanding of retraining and upskilling opportunities in order to ensure they have the workforce they need to deliver the energy mission.

Employer investment in training in the UK also remains far too low. The latest comparable data shows that, out of the 30 European countries, the UK ranked 9th in terms of the percentage of total labour cost enterprises spend on continued vocational training (CVT). In 2015, UK enterprises spent 1.8% of total labour costs on CVT compared to Denmark which spent 2.7% and France and Slovenia which spent 2.5%. In addition, Belgium (2.4%), the Netherlands (2.3%), Ireland (2.2%), Luxembourg (2.1%) and Malta (2.2%) all spend a higher proportion of total labour costs on CVT compared to the UK.[4] Recent data from the UK suggests spending has not proportionately increased since 2015.[5] This is despite the evidence that increasing human capital accounts for around one-third of productivity growth.[6]

There are a number of steps that should be taken to reverse the decline in employer investment in training, as set out below. It is worth noting that skilled managers are also linked to behavioural change. For example, in degree level apprenticeships, 97% of CMI management apprentices said they were more committed to upskilling the people who work for them, helping to ease the UK’s long-standing underinvestment in training and ensure investment in managers and leaders reaches people at earlier stages in their careers, giving them learning and development opportunities.

Recommendations for increased investment in training to deliver the Government’s clean energy mission:

CMI believes there needs to be room to explore the role of the professional business services sector in developing further green management skills across the economy – beyond green industries alone — as an important lever for shifting to greater sustainable consumption and production alongside new requirements for non-financial reporting. CMI research amongst its training provider partners has found that 42% report an increase in demand for green management skills training, from both employers and learners. Green management skills should be a key element in funded management and leadership and green skills programmes.

Firstly, double transparency – ESG (environmental, social and governance) reporting requirements are being reviewed to take account of sustainability and net zero targets, therefore employers should also be encouraged to report on the social and human capital investments that they are making. They could voluntarily publish how much they invest in training, learning and development, similar to the requirement for larger employers to measure and report gender pay gaps.

Secondly, the future of the apprenticeship levy should be considered in the context of ensuring that employers who are investing proactively are not penalised, and those who are not investing proactively should not be gaining unfairly. In practice, this means the creation of new routes into work for young people and those not in employment and also for upskilling and reskilling, offering new opportunities for those in work to progress.

Thirdly, the levy and tax system – including the potential for R&D relief style incentives for those who are investing in workforce training – should be seen in the context of trying to encourage good employer behaviour and practices. Government tax policy needs to encourage a virtuous cycle of training and development of staff whereby the pool of available, skilled talent grows and is incentivised.

The CMI believes the Government should provide clear and consistent policy for its Net Zero ambitions. This will provide certainty for businesses and give them the confidence to invest, something which was stated by Chris Norbury, Chief Executive of energy supplier Eon UK, who said that changing plans to phase out petrol and diesel powered cars would undermine the confidence companies needed to transition to greener products. He also said that from a business perspective, companies wanting to invest in the UK need long term certainty to create the jobs and economic prosperity the country needs.[7] This view was also supported by the Director General of the British Chambers of Commerce and Emma Pinchbeck, in her previous role as CEO of Energy UK.

January 2025

                                               4/4