Public Accounts Committee: inquiry into STEM skills

Written submission from EngineeringUK

Executive summary

1. There is a significant amount of working going on across government departments aimed at improving science, technology, engineering and mathematics (STEM) skills in the UK workforce to help improve productivity and economic growth. Government should ensure that all of these efforts, including communications campaigns such as the Year of Engineering, work to shared objectives, are meaningfully evaluated and have a legacy enhancing understanding of what works.

2. EngineeringUK welcomes government moves to secure greater co-ordination of STEM initiatives and urges government to work with the engineering sector to amplify the impact of programmes that already exist outside of government funding streams to ensure simplification of the complex landscape of interventions.

3. We support the NAO report’s assessment that the evidence base on the STEM skills shortage needs to be further developed, and have taken steps with partner organisations to strengthen the methodology and definitions used across the engineering community. We nevertheless recognise that there are some limitations to our analysis, many of them unavoidable due to the nature of data available. We would welcome steps by Government to make the necessary data available so that we may better understand the engineering skills supply.

4. There are a number of further challenges that government should work with the STEM communities to address, in order to ensure that we have the skilled STEM workforce required to meet the grand challenges identified in the industrial strategy. 

About EngineeringUK

5. EngineeringUK is a not-for-profit organisation that works to inspire tomorrow’s engineers and increase the talent pipeline (through education) into engineering. We were established in 2001 out of the regulatory body, the Engineering Council, as the Engineering and Technology Board with responsibility for promoting engineering. EngineeringUK is funded under the terms of a royal charter via the registration fees paid by professional engineers, together with income brought in from companies and trusts who share our aims.

STEM skills landscape

6. There is a significant amount of working going on across government departments aimed at improving science, technology, engineering and mathematics (STEM) skills in the UK to improve productivity and economic growth. Since the NAO report was published the government has launched a major communications campaign, the Year of Engineering. This campaign aims to work with partners across engineering to showcase engineering in such a way as to capture young people’s imaginations as to the potential of an engineering career,  in a major push to tackle the skills gap. Work is currently underway to plan for and secure the legacy of the Year of Engineering. We would welcome greater clarity from Government on how the value of this work will be captured and feed into the wider STEM skills strategy.

7. EngineeringUK welcomes recent moves by Government to ensure greater co-ordination of these different programmes, including the establishment of a team within the Department for Education with a remit to oversee STEM skills initiatives. We share NAO’s view that STEM engagement activities would benefit from greater coordination and evaluation to identify what works and ensure value for money.

8. Findings from our 2017 public perceptions survey, the Engineering Brand Monitor (EBM), indicate that just 28% of young people aged 11 to 14 surveyed had taken part in a STEM careers activity in the last year. Yet the Royal Academy of Engineering estimates that more than 600 UK organisations run STEM engagement initiatives directed at schools.

9. In order to strengthen the engineering community’s understanding of both the extent of the skills shortage and how it can be most effectively addressed, EngineeringUK is embarking on a new 5-year strategy, which includes the following activities. We are keen for government to be an active partner to maximise the effectiveness of these efforts to simplify the landscape and ensure the best value for money and the greatest impact:

10. An enhanced research programme, designed to examine in depth issues of particular concern on behalf of the engineering community. This includes, but is not limited to, research into young people’s understanding, awareness, and knowledge of the academic and vocational routes available into engineering; analysis of apprenticeship participation and the challenges and opportunities afforded by the apprenticeship levy; take-up and attainment in STEM by gender and social mobility over time; demand projections at detailed occupation and regional level; and trends in public perceptions of STEM over time.

11. Resources to streamline STEM outreach landscape. EngineeringUK is developing Tomorrow’s Engineers as a hub to enable schools to identify appropriate engineering focussed engagement activities available from employers and other providers. In addition, EngineeringUK is working with STEM Learning to provide a ‘menu’ of available activities to schools. A pilot of this approach, funded by the Careers and Enterprise Company, is currently in progress. 

12. The development of a theory of change and impact framework to better evaluate the effectiveness of STEM engagement activities. To make best use of our resources as a community and tackle the skills shortage more effectively, it is clear we must develop a better understanding of whether STEM engagement initiatives are having their intended effect. However, no single evaluation framework within the engineering community currently exists. EngineeringUK is developing a theory of change to establish the conceptual journey by which we believe young people choose STEM subjects. This will form the foundation for more robust evaluation measures of STEM engagement activities, and allow us to more easily identify how activities undertaken across the community work (or could work) together ie. hand-off moments.

Understanding the STEM skills shortage

13. The NAO report finds that the government’s understanding of the nature of the STEM skills shortage is limited and requires further development. EngineeringUK is committed to the need for a quality evidence base, and supports the NAO report’s assessment that this needs to be further developed. In March we published the 20th edition of our State of Engineering report, which looks in detail at the value of engineering skills to the economy and the supply and demand for those skills. The report is owned by the engineering sector and widely used and trusted. In preparation for our most recent State of Engineering 2018 report, we undertook a review of the methodologies used to calculate demand and supply of engineering skills in consultation with the engineering sector, including with the Royal Academy of Engineering and Engineering Council.

14. We also drew from a wide range of datasets to triangulate our results including, but not limited to: the Inter-Departmental Business Register (IDBR); Labour Force Survey; HESA student records; HESA Destination of Leavers from Higher Education Survey; and take-up and attainment data from JCQ, SQA, Skills Funding Agency, and Ofqual.

15. Where appropriate, we commissioned experts in the field to analyse data on our behalf. For example, we commissioned the Office of National Statistics to undertake analysis of the IDBR from 2009 through to 2016; the Institute of Employment Studies for analysis of the Labour Force Survey from 2006 to 2017, and the University of Warwick Institute of Employment Research to produce a bespoke extension of Working Futures.

Inconsistent definitions

16. A particular issue raised by the NAO Report was the lack of consistent definitions used to assess the scale of demand for, and supply of, engineering skills. Cognisant of the need to agree and use consistent definitions, EngineeringUK, the Royal Academy of Engineering and Engineering Council (RAEng) reviewed their respective footprints for engineering occupations (SOC) and industries (SIC) in 2017. Following the agreement of a set of criteria regarding the level of qualifications and skills deemed to be required for engineering roles, the three organisations undertook an extensive review of the SOC and SIC lists included in previous footprints. Where the group could not agree unanimously, input was sought from relevant professional engineering institutions. The result is a revised engineering footprint agreed by the engineering community that will provide a consistent basis for analysis going forwards.

Demand for engineering skills

17. Our evidence suggests that there is, and will continue to be, strong demand for both core and related engineering roles[1]. In 2017, we commissioned Warwick Institute for Employment Research to produce a bespoke extension of Working Futures 2014-2024, reflecting our new footprint. Their analysis indicated that between 2014 and 2024, 1,240,000 graduate and technician “core” engineering jobs will arise across all industries as a result of both replacement demand (i.e. the result of people leaving the labour force) and expansion demand (i.e. new jobs). Assuming uniform distribution across the ten years, this translates to a need to fill 124,000 Level 3+ core engineering roles every year.

18. An additional annual requirement for 79,000 “related” roles involving a mixed application of engineering knowledge and skill alongside other skill sets was estimated. Altogether, this means 203,000 people with Level 3+ engineering skills are required per year to meet expected demand. Of this total annual net requirement, 58% is expected to arise in engineering enterprises. A summary of these demand projections can be found in the Table 1 in the Appendix.

Shortfall of engineering skills from education and training

19. Against this demand, we considered the number of people achieving Level 3+ qualifications through the educational pipeline. Specifically, we examined the supply of engineering skills produced by higher education and apprenticeships, drawing from the HESA student records, Destination of Leavers from Higher Education (DLHE) survey, and apprenticeship data from the Skills Funding Agency, Skills Development Scotland, Welsh Government, Department for Education, and Learning Northern Ireland.

20. Based on this information, we determined there to be an annual shortfall of between 22,000 and 45,000 people to fill ‘core’ engineering roles at Level 4+ level. At Level 3+, we estimated the shortfall of engineering skills to be between 37,000 and 59,000 people a year. These ranges reflect the shortfall based on an ‘estimated’ number of HE graduates – from all disciplines – who are in engineering roles in the UK six months after graduating, and the shortfall were those with the ‘potential’ to fill these roles did so. A full description of the supply methodology can be found in Table 2 in the Appendix.

Underutilisation of skills

21. Our findings correspond with the NAO Report’s assessment that there is an underutilisation of skills. However, this underutilisation appears to vary widely by discipline. Altogether, we found comparatively high rates of UK-domiciled engineering graduates employed six months after graduating were working in related occupations (65% in 2015/16). This was, however, considerably higher among some disciplines than others. Of those working, 76% of civil engineering leavers were employed in engineering-related occupations six months after graduating in 2015/16, for example. This compares to just 27% in technology disciplines. More detail on the proportions of engineering and technology graduates who find employment in engineering occupations six months after graduating can be found in Table 3 of the Appendix.

22. That unemployment rates among engineering and technology graduates are often higher than for other subjects also points to some degree of underutilisation. In 2015/16, 8% of full time UK domiciled first degree engineering and technology graduates were unemployed six months after graduating, compared with 5% across all graduates. A lack of employability skills, as has been highlighted by the NAO, Wakeham and Shadbolt Reports and intelligence from our corporate members, could go some way towards explaining this paradox.

23. Nevertheless, our analysis indicates that even if all graduates with the skills to fill these roles did so (including EU and non-EU graduates who studied in the UK), a shortfall of 22,000 people with Level 4+ engineering skills would remain. Notably, in our supply analysis we include graduates from all disciplines, using the rates in which DLHE respondents enter engineering employment (in the UK in the case of the ‘estimated’ supply and more widely, in the case of the ‘potential’ supply) to arrive at our figures. In other words, we have taken a wide view of the supply available, recognising that many graduates from non-engineering disciplines can and do fill engineering roles.

24. Research undertaken on our behalf by the Institute of Employment Studies into labour flows into and out of the engineering sector suggests that inter-sector mobility has by and large been net neutral over the last decade. In other words, while there may be potential to reduce the shortfall by attracting more workers from other sectors and improving retention, so far annual net inflows into the engineering sector have been too small to make a tangible difference.

Limitations in evidence base

25. We recognise that there are some limitations to our demand and supply forecasts. For example, our demand projections utilise the macro inputs produced as part of Working Futures 2014-2024 prior to the UK’s decision to leave the EU. It is very possible that our demand projections, were they to factor in the UK’s impending exit from the EU, would paint a different picture. We urge Government to consider continued funding of the Working Futures analysis previously commissioned by UKCES, which has been a key input to the estimates of engineering skills requirements.

26. In relation to our supply analysis, we recognise that it is possible some people may gain Level 3+ engineering-related qualifications through further education (FE). Owing to the fact FE data is collected at enrollment, and not individual level, we are necessarily limited in our approach. Moreover, unlike the supply arising from higher education – no information on employment destinations of apprentices is available. Our calculations therefore assume that 100% of apprentices who complete an engineering-related apprenticeship go on to engineering occupations – an assumption that results in an underestimate, rather than an overestimate, of the shortfall. Once again, we would welcome steps by Government to make the necessary data available so that we may better understand the engineering skills supply.

Further challenges to addressing the engineering skills shortage

Raising understanding and knowledge of the profession

27. It is apparent from our Engineering Brand Monitor, a nationally representative public perceptions survey we have conducted since 2010, that while people tend to have positive views of engineering, their knowledge of what the profession entails falls short. Over half of young people aged 11 to 19 who took part in our survey stated they had quite or very positive views of engineering. But when asked how much they know about what people working in engineering do, 37% of those aged 11 to 16 and 43% of those aged 16 to 19 stated they knew “only a little” or “almost nothing”.

Raising awareness of the varied routes into engineering

28. We welcomed the educational reforms undertaken by Government to place greater emphasis on technical skills required by the economy. However, our research shows that knowledge and awareness of these routes among both young people and parents are low. The majority (58%) of 11 to 14-year olds surveyed as part of the Engineering Brand Monitor 2017 indicated they knew almost nothing or just a little about what apprentices do and the different types of apprenticeships available– and just over a third felt an apprenticeship was a desirable pathway. Understanding was similarly low among parents surveyed, with 46% indicating little knowledge of what apprentices do.

Gender underrepresentation

29. While women comprise 47% of the overall UK workforce, they make up only 12% of those working in engineering occupations. The causes of this gender underrepresentation appear to be systemic and formulated at a young age. Asked how much they would like to be an engineer when they are older, just 34% of 7-11 year old girls surveyed stated a little or very much, compared with 59% of boys of the same age. By the time girls reach age 16-19, only 25% would consider a career in engineering, less than half the proportion of boys.

30. Strong gender differences are apparent in educational choices. In the latest year for which data is available, only 27% of girls’ A level entries were in STEM subjects, compared with 46% of boys’ entries, and only 16% of first degree engineering students were women. Even after having studied engineering, there are further leakages in labour market transitions. Six months after graduating, male engineering and technology graduates are more likely to go on to work in an engineering-related role or find employment in the engineering sector than their female counterparts.

STEM teacher shortage

31. Teachers have a vital role in shaping the aspirations and career trajectories of young people, but many pupils do not have access to specialist STEM teachers. In the context of a growing pupil population, the number of STEM specialist teachers has remained largely stagnant since 2015. This is starting to become an acute problem: in 2017/18 there was an estimated shortfall of 2,200 STEM trainee teachers against the DfE teacher supply model target in England. There is also an issue of retention, with teachers increasingly leaving the profession for reasons other than retirement.

Reliance on international student supply

32. A considerable proportion of students studying engineering and technology at HE level in the UK are from EU or non-EU countries. This is most apparent at taught and research postgraduate levels, where international students make up two thirds of all engineering and technology students and as much as 80% in some engineering disciplines.

33. Any change to the free movement of people in the EU would, in principle, only directly affect potential students from the EU, who in 2015/16 comprised a quarter of international entrants to UK HE (25.6%). However, the UK’s decision to leave the EU may also have an impact on other potential students’ perceptions of the UK as an attractive place to study. The QS Intelligence Unit surveyed students from 10 countries who were looking to study abroad and uncovered a common concern they would now be unwelcome.

34. A number of universities, including the Russell Group, have highlighted the importance of international students to ensuring courses remain financially sustainable, particularly in higher-cost disciplines. Because international students form such a large proportion of those studying engineering courses, it is possible these courses may not be viable without them. This, in turn, will affect access to such programmes for UK students, impacting the engineering skills supply on two fronts.

35. Leaving the EU could also affect the quality of UK HE teaching and research, potentially reducing the outward mobility opportunities for academic staff, the ability to attract international talent and the UK’s access to research and innovation funding and collaboration. In a survey of academics conducted by YouGov on behalf of the University and College Union (UCU), 42% indicated they were more likely to consider leaving UK higher education as a result of the EU referendum result – a view expressed by three-quarters (76%) of non UK EU academics. 29% of respondents said they already knew of academics leaving the UK and over two-fifths (44%) said they knew of academics who had lost access to research funding as a direct result of the vote. An overwhelming majority (90%) expressed concern that the UK leaving the EU would have a negative impact on the UK HE sector.

Recommendations

36. Beyond the recommendations already highlighted above (continuing the invaluable work of Working Futures and addressing gaps in available data), there are a number of specific actions we have identified as essential to addressing the skills shortage. Contingent on their success is the involvement and support of the engineering community, the education sector, and Government. 

37. Streamline the STEM outreach landscape. The engineering and STEM outreach communities need to make it simpler for schools to connect with employers and other providers to access high quality, engineering focused STEM engagement activity. Government should ensure that it works with the community to achieve this goal.

38. Understand what works. The engineering and STEM outreach communities aim to develop a better understanding of what engineering-focused careers interventions work. Strengthening evaluation of existing programmes and sharing good practice can help to ensure we direct our resources to the most effective methods to inspire young people to study STEM and pursue engineering careers. Government should be an active participant in this work.

39. Address the STEM teacher shortage. The government should work with the engineering and education communities to increase the supply and retention of specialist STEM teachers. This has been a long-standing issue, and one that requires innovative approaches to address.

40. Safeguard against potential the negative implications of Brexit. The government must ensure the UK’s exit from the European Union does not exacerbate the engineering skills shortage. In particular, it is vital that the higher education sector maintain its status as world-class and welcoming to talent across the world.

41. Ensure apprenticeships are of high quality. Engineering employers and the government need to increase the supply of high quality apprenticeships. Greater work needs to be undertaken to raise awareness of apprenticeships among young people and their influencers. The apprenticeship levy should be reviewed to ensure it is having its intended effect. 

42. Raise understanding and awareness of engineering. The engineering community are working to ensure young people have a full understanding of the excitement and variety a career in engineering offers, and the potential contribution they can make as an engineer. The Year of Engineering and This is Engineering campaigns are key opportunities to showcase the profession to a new generation, and have been embraced and supported by the community. Government should ensure that the Year of Engineering campaign has a powerful legacy.

43. Improve diversity and inclusion. The engineering community should improve engineering’s record on diversity and inclusion. More work is needed to better understand the barriers for women, black and minority ethnic (BME) communities and people from disadvantaged backgrounds to pursue pathways into, and careers in, engineering.

Appendix

Table 1. Summary of projected annual net requirement, by sector and core/related engineering occupation – UK

Source: Engineering UK: The state of engineering 2018

Table 2. Summary of EngineeringUK 2018 supply methodology

Table 3. Full time UK domiciled employed engineering and technology leavers who graduated in 2015 to 2016, by principal subject and occupation – UK

Source: HESA Destinations of Leavers from Higher Education Survey 2015/16

‘..’ represents a percentage that was calculated on a small population (of between 0 and 22.5 inclusive) and therefore suppressed to prevent any misleading interpretation.