Mind the Gap: skills for the transition to a low carbon economy

The event was opened by Peter Young, Chairman of the Aldersgate Group.

He contextualised the report as the second in a triumvirate that the Aldersgate Group (AG) has undertaken in response to the low carbon economy agenda (alongside finance and resource efficiency). Mr Young thanked John Edmonds for chairing the Skills workstream, which led to this report.

Greg Clark, Conservative Shadow Secretary of State for Energy and Climate Change, welcomed the report and the broader work undertaken by the Aldersgate Group, which he described as “genuinely progressive and pathbreaking”, in tackling environmental issues before they became politically fashionable.

The environmental agenda, he believed, is one of the biggest issues in public policy today and will be a huge issue in the forthcoming General Election. Mr Clark remarked upon “what a pace of recognition there has been over recent years and I think the work of the Group has been important in moving that on.”

Mr Clark noted that a large expansion of nuclear power is now certain and it is vital that this policy is accompanied by a concomitant development in skills and education policy to avoid “a bottleneck in the supply of skilled labour.” He felt that "there's a lot in this report that will, I hope, make its way into our forthcoming (low carbon) paper".

Finally Mr Clark argued that the era of reliance upon low fossil fuel prices is long past. To give stability to household energy bills and the competitiveness of industry, Mr Clark argued that we need “to get to the position that we can secure energy supplies in a way that is consistent with our low carbon obligations.”

Lord Young of Norwood Green, Minister in the Department for Business, Innovation and Skills (BIS), announced that “a lot that you put in the report, as a government, we agree with.”

This included the recommendation that a skills strategy should accompany all environmental policies. Lord Young pointed out that in fact, every Low Carbon Economic Area that the Government establishes is due to have its own skills demonstration project. The Government has also made funds available through the Skills for Growth national strategy and £100 million is being invested into skills in priority sectors.

Lord Young continued, “We totally agree with Aldersgate and the TUC about the critical importance of skills investment during downturns”, particularly in the STEM (science, technology, engineering and maths) skills. Given the scale of the challenge, the main emphasis should be on flexibility for employers which means overseas recruitment may be necessary to fill the skills gaps in the short term, but the Government will simultaneously work with Sector Skills Councils to boost training capacity in areas where the skills are lacking. The Government has shown a history of commitment in this area: in 1997 there were only approximately 65,000 apprentices, whereas today there are 250,000.

Lord Young concluded that he was very pleased with the report and felt that the Aldersgate Group was making a vital contribution to one of the key debates of the twenty-first century.

John Edmonds, Chair of AG's Skills working group and former President of the TUC, noted that one of the first points the roundtable groups discussed was the loose definition of ‘green jobs’.

The working group recommended this term be avoided, because it undervalues the scale of the transformational change, whereby all jobs in the future will have some element of ‘green’.

In terms of the skills needed for the low carbon economy, the working group noted the importance of the STEM subjects, project management skills, industrial managerial roles and communication skills. From this the conclusion was clear that these requirements are not new but are skills that the UK economy has been short of for the past twenty years. Consequently Mr Edmonds emphasised, “this is not a policy where we are taking enormous risks; this is a policy of no regrets”, because investment in these skills will provide a good economy regardless of the speed of transition.

Moreover green training should not be viewed as starting from scratch, but as building upon existing skills. This brings two advantages: actioning the policy could be more quickly achieved, and it carries a social benefit because there is no danger of creating two groups of people, one with the green skills and one without. Mr Edmonds argued that the transition to a low carbon economy must be a just transition, “it must be based on fairness and consensus and justice. To leave communities or groups behind, to have winners and losers to the extent that the losers are depressed in their job prospects is not an acceptable way in the twenty-first century to manage this transition.”

Jon Kimber, Managing Director of British Gas New Energy opened by noting that British Gas will be at the heart of the transition to a low carbon economy, because the company has a responsibility to help customers use less energy, and cleaner energy.

The size and scale of the transition ahead is vast and the only precedent is the conversion to natural gas which was undertaken forty years ago. During this period, British Gas visited every home in the UK which used gas and modified forty million appliances.

British Gas has recognised the enormous business potential offered by the transition to a low carbon economy. It has a long history of delivering energy efficient products and services and over the past five years it has installed over 1.5 million insulations and 100 million energy efficient measures in its customers' homes. British Gas employs around 10,500 people whose jobs require green skills, many of whom are trained in one of British Gas’ five training academies.  The company also recently opened its first dedicated green skills training academy, “so we are acutely aware", Mr Kimber declared, "of the need to continue to invest in people”.

However Mr Kimber cautioned that much of what British Gas is seeking to achieve is “dependent upon political, regulatory and fiscal frameworks for their delivery.” Before companies such as British Gas make an investment in their workforces, they have to be sure that there is a market for their skills, now and in the future. He called on the Government to provide clarity and to put in place the long term policies that will lead the British economy towards meeting the challenging climate change targets.

Tess Gill, Commissioner for Work and Pensions at the Sustainable Development Commission, proposed that the agenda should go beyond low carbon: the discussion should be how to live within environmental limits.

The recent report by the Committee on Climate Change called for a step change because the UK economy is not decarbonising fast enough. Urgent action is needed and although the UK Government should be applauded for initiatives such as the Climate Change Act and the Low Carbon Industrial Strategy, greater focus should be given to how the transition is to be effected.

Ms Gill called for a skills revolution whereby every citizen has an understanding of the task ahead and an ability to take that knowledge from the workplace, out into the community. The new National Skills Strategy has some positive attributes: more apprenticeships, focus on STEM skills, funding switched to low carbon areas and some encouragement to collective action by Sector Skills Councils, but nevertheless, Ms Gill suggested this was disappointing in comparison to the Low Carbon Industrial Strategy. She argued that with the current recession we are potentially in a ‘win win’ situation, whereby new jobs can be created at precisely the time that old jobs have fallen away.

Susan Morgan, Head of Corporate Responsibility Strategy, Policy and Business Planning at BT opened with examples of what the low carbon economy will mean.

BT has a history of commitment to reduction in the intensity of its CO2 emissions. This was first announced in 1992 and BT has been reporting externally since. Ms Morgan believed that the next stage will be to move towards a broader focus on products and services, instead of simply managing the company's internal impacts.

BT is therefore looking at the long term view, seeing where the UK needs to be by 2050 and seeking to understand what that means in terms of business opportunities and how to help domestic and business customers. To achieve this, BT is seeking to make the connection between the upskilling of BT employees that can be achieved within the company and the connection that they have with their employees outside the company. New skills in work will be mirrored by the new skills people will need in terms of consumer patterns and choices they make outside work.

Ms Morgan concluded that there is a need to increase low carbon skills for future business opportunities, but also to understand how you can apply those skills back into the community.