NEWS | Hannah Corbett | March 2024
Investment to address worker and skills shortages in Spring Budget 2024 welcome, but action needs to go further
The Chancellor has set out further details in the Spring Budget around the two-year £50 million apprenticeship growth sector pilot originally announced in the 2023 Autumn Statement. Eligible apprenticeship providers will receive targeted payments of £3,000 for apprenticeships in trades including pipe welders and nuclear technicians. The funding is aimed at supporting providers to invest in equipment and tools that will enhance the training they provide. It is expected that further details will be set out later in March and the aim is that this funding will help ‘break down barriers to high-quality training in advanced manufacturing, green industries and life sciences apprenticeships.’
The announcement, which came alongside others including the extension of the oil and gas windfall tax to 2029 and the freeze in fuel duty, is part of a wider set of measures aimed at boosting British manufacturing and R&D. These include a focus on green industries and low-carbon manufacturing through a £120 million increase to the Green Industries Growth Accelerator (GIGA). The £1 billion of funding associated with GIGA will be used to support electricity network upgrades and offshore wind sectors (circa £390M), and also for Carbon Capture, Utilisation and Storage (CCUS) and hydrogen sectors (£390M).
Lack of action on worker and skills shortages could limit economic gains associated with net zero
While these announcements are welcome, they will require more comprehensive action on addressing persistent skills and worker shortages (beyond the focus on apprenticeships) in order for the UK to deliver on its net zero ambitions as well as maximise the associated economic gains. Our research has consistently shown that failure to act on worker and skills shortages could constrain the ‘size of the prize’ in terms of GDP and job gains for the UK in deploying new low-carbon technologies such as CCUS, as well as delivering on its net zero ambitions.
Moreover, efforts around workforce planning guided through frameworks such as the UK Government’s Net Zero and Nature Workforce Action plan to be published in Spring 2024 must consider how net zero projects are sequenced and coordinated as well as how the supply of labour can be boosted through, for example, training and upskilling. Findings from our work due to be published later this month as part of the Scotland’s Net Zero Infrastructure programme and the Labour market and other wider economy challenges in decarbonising the UK’s industry clusters [LAB-CLUSTER] project suggest that a lack of effective planning around the timing of projects could exacerbate competition for already constrained resources such as labour between projects, which in turn could have negative outcomes for the economy as well as delivery.
The need for action on workforce and skills shortages also extends to other announcements made by the Chancellor today around the extension of GB Nuclear and zero-carbon aircraft engine technology. Without this action, ambitions to position the UK as a ‘world leader’ in these emerging low-carbon technologies could be put at risk, with consequences for the future sustainability and prosperity of the UK economy and the environment.
Image credit: HM Treasury