Consultation Response Carillion response to the BEIS Northern Powerhouse Stakeholder Engagement Questionnaire

Transcription

1 Consultation Response Carillion response to the BEIS Northern Powerhouse Stakeholder Engagement Questionnaire April 2017

2 Carillion response to the BEIS Northern Powerhouse Stakeholder Engagement Questionnaire Carillion welcomes the opportunity to respond to the BEIS Stakeholder Engagement Questionnaire on the Northern Powerhouse. We have a significant presence in the Northern Powerhouse, employing over 5,700 people, and have a strong physical evidence base of delivery in Northern cities. We want to use our experience and capabilities to drive transformational change across the region, and to this end we are wholly supportive of the Northern Powerhouse initiative. We were proud to support the UK Northern Powerhouse Conference in February of this year in Manchester, and of the impact we have made and will continue to make in the North. Carillion Background It may be helpful in the first instance to outline some background information on Carillion. We are one of the UK s leading integrated support services companies, with extensive construction capabilities, a substantial portfolio of Public Private Partnership projects, and a sector-leading ability to deliver sustainable solutions. We employ 20,000 people in the UK, and over 46,000 people worldwide. Our services include: facilities management, energy services, road maintenance, rail services, remote site accommodation services and consultancy services. We also have expertise in delivering major Public Private Partnership (PPP) projects, including Government buildings and infrastructure mainly in the Defence, Health, Education and Transport sectors in the UK and Canada. Our construction services activity includes building and civil engineering activities in the Middle East. In the UK, we have been able to supply Local Authority clients with innovative, efficient, cost-saving and sustainable solutions across a range of sectors and on a number of high profile projects. Examples of our work within the Northern Powerhouse include the A1 Dishforth to Barton upgrade, our strategic alliance with Stockport Metropolitan Council which has created efficiencies and generated income for the Authority, and our collaboration with Tameside Metropolitan Borough Council on a number of Building Schools for the Future (BSF) projects. Our aim is to be recognised as a leading sustainable business, and to deliver sustainable solutions with our people, our customers and our supply chain for the wider community and environment in which we work and live. This aim underpins a number of our activities - for example, we are lead partners within Business in the Community (BiTC), and our Chief Executive, Richard Howson, chairs BiTC s national Community Leadership team. We were delighted to be named as a finalist in the 2015 Responsible Business Awards. As part of our Business in the Community work, we have recently achieved two significant landmarks; our 1100th work placement and 500th permanent job for vulnerable individuals many of whom would not otherwise have gained this experience. We are also proud to be the lead corporate partner for the construction and business services sector of the Your Life campaign; this campaign aims to increase the numbers of young people studying Maths and Physics post-16 by 50% by the end of 2017.

3 Our Response Turning to the questionnaire, we set out our responses below: 1. Please rank the following Northern Powerhouse policy themes according to what the priority needs are in your area The issues facing the Northern Powerhouse communities are complex and many, and in some respects, we feel that ranking policy themes according to priority is too simplistic an approach. Only by taking a holistic view of the unique characteristics, challenges, and opportunities facing the Northern Powerhouse, can we truly drive the initiative forward, and address the economic imbalance which is present in the UK. It is perhaps no coincidence that the Northern Powerhouse policy themes are similar to the ten pillars identified in the Government s Industrial Strategy as these undoubtedly form the bedrock to economic success. We agree with each of the Northern Powerhouse policy themes but note that they are inextricably interlinked they cannot in isolation drive the transformational change required, and in particular the drive to increase levels of productivity across the Northern Powerhouse which continue to lag behind levels in the South. 2. Are any policy themes missing? If so, why is it a barrier to productivity in the north? No; we believe that those policy themes identified; connectivity, education and skills, enterprise and innovation, trade and investment provide sufficient focus. 3. What are the biggest barriers to productivity facing your city / region / county / business / organisation? On a national level, we live in a country where there continues to be educational inequality; the only OECD country where 16 to 24 year olds are no more literate or numerate than 55 to 64 year olds. We live in a country in which, within two decades, 90 per cent of jobs will require some digital proficiency, and yet 23 per cent of adults lack basic digital skills. A highly skilled and educated workforce is critical to economic growth and productivity, and we are therefore encouraged that the Government has set out its commitment to developing skills as one of the key pillars of its Industrial Strategy. While the need to improve educational standards is in some sense a national issue, it is perhaps arguably more pertinent across the Northern Powerhouse. A higher percentage of individuals aged in the Northern Powerhouse have no qualifications compared to those in the South, while a significantly higher proportion of the working age population in the South have attained a degree or equivalent compared to those in the Northern Powerhouse.

4 At Carillion, we recognise the importance of equipping our young people for the future, and we understand that an educated and skilled workforce is integral to the future success of the country at a time when our relationship with Europe and the world is shifting. Research has suggested that many areas within the Northern Powerhouse will be most impacted by Brexit due to the loss of EU structural funding and for those cities such as Sunderland which are reliant on exporting goods (in this instance cars) within the single market, the introduction of trade tariffs could have significant knock on effects for the economy of the area. As we enter this new era, it is vitally important that we have a skilled and diverse workforce to drive our competitiveness on the world stage, and we at Carillion want to do our bit, and we believe we do. We have been delivering apprenticeships since the 1970s, and are currently the UK s largest private sector provider of construction apprenticeships with 2,000 apprentices in training each year. We have 5 training centres located within the Northern Powerhouse, and others scattered around the country. We also provide rail, civil, mechanical, electrical, general maintenance, business administration and legal apprenticeships. We understand that those youngsters who may not excel at traditional academic subjects still have much to offer; and that a skilled workforce where everybody fulfills their potential is crucial for a thriving and vibrant economy. As a major employer in the UK and across the Northern Powerhouse, we have a vested interest in developing successful, capable young people, and this is why we are proud to have established Carillion Academies Trust; a fresh and innovative model of education Trust that will combine educational expertise with business and commercial understanding to ensure that our young primary school learners are fully equipped for the challenges of future employment. We have focused our initial academy offerings in the Northern Powerhouse, and currently have two academies within Tameside; we hope to expand our academies and attract secondary schools into our Trust in the future. We believe that there is also a need to address the shortage of science, technology, engineering and maths (STEM) skills. This is of immediate concern not only to Carillion as a supporter of the Your Life initiative, but also the wider construction and infrastructure industry. As part of the strategy to address these shortages, we must aim to have a more diverse and inclusive workforce. Recent research conducted by WISE a campaign to promote women in science, technology and engineering shows that only 33% of girls who study maths and science at GCSE level progress into any form of Level 3 qualification, whether this is via A Level, advanced apprenticeship or vocational qualification routes. These figures worsen when you consider that only 7% advance to Level 4 qualifications (through university, higher apprenticeships or further vocational qualifications). Carillion, like many other employers, requires STEM qualifications up to Level 4 for a large proportion of our engineering positions and therefore we absolutely recognise the need to proactively tackle the STEM skills gap. As part of our attempt to address the issue, Carillion is a partner in the three-year Your Life campaign promoting Maths and Physics as skills that will drive the UK forward in a competitive global economy.

5 However, continued work is required if we are to move away from the long held stereotypes of the construction industry. We still struggle to find enough females to fill a range of both graduate level and apprenticeship level positions in STEM areas. While again this can be viewed as a national issue, we find that it is particularly pertinent within the Northern Powerhouse. One of the key barriers to productivity which we believe exists within the Northern Powerhouse, is not only the shortage of skills, but the brain drain ; the process by which young, skilled individuals - often graduates leave the North of England to find employment in the capital. A recent report has found that on average there is an average net deficit of approximately 7,500 highly qualified workers leaving the North on an annual basis. We need to address the fundamental root causes of this migration and seek an understanding of why so many talented individuals feel the need to move to London to fulfill career ambitions, and this means increasing economic prosperity and employment opportunity across the Northern Powerhouse. Aside from skills, one of the key challenges that faces the Northern Powerhouse is that of connectivity and infrastructure investment. The links between productivity, economic growth and transport connectivity are well known, and in order for the North to become a thriving economic powerhouse and act as a counter-balance to the economic dominance of London and the South East, it is critical that we address and invest in transport infrastructure. This will have a number of positive effects, not least because it will mean that the large cities within the Northern Powerhouse can act as a single competitive area, pooling together skills and resources to make a single strong and competitive economy. At present, it takes on average longer to travel from Newcastle to Manchester by train than by Newcastle to London. Analysis by IPPR North reveals that the Department for Transport will spend just 280 per person in the North over the next 3 years compared with 1,870 per person in London. Until we address this fundamental weakness, the North is unlikely to truly fulfill its economic potential. We therefore urge the Government to focus on key infrastructure upgrades as a priority; particularly east-west Trans-Pennine rail and road links. Finally, we agree that investment remains a major issue and barrier to improvement within the Northern Powerhouse. We believe that in terms of institutions which could be created within the Northern Powerhouse to support local growth, there is merit in exploring the creation of regional development banks. The objective of these banks would be multi-fold, and would include; harnessing local funding to local priorities and ensuring that regions are able to access the institutional capacity and financial expertise needed to achieve their aims. This we believe would drive growth in jobs through the implementation of infrastructure programmes. We are already seeing oversees investment looking to fund infrastructure projects in which to invest, particularly China. 1 Homes for the North Brain Gain: The Role of Homes and Place Making in Attracting Graduates to the North of England 1 IPPR North: Transport Secretary urged to close 1,600 per person London-North spending gap

6 4. Is this a northern or national issue? Some of the biggest barriers to productivity facing the region (skills, infrastructure / connectivity, and investment) are also arguably barriers to productivity on a national basis, and therefore a national issue. We welcome the Government s Industrial Strategy and note that the key pillars of the strategy reflect the Northern Powerhouse policy issues. We agree it is important for the Government to look at the UK as a whole, but we should not lose sight of the fact that the North of England is distinct, geographically, economically and socially and in order for the UK to be truly competitive on the world stage we need to ensure that all areas of the country are firing on all cylinders and this means that we address the underlying economic imbalance that exists. 5. Is this best addressed at a local level, in partnership with local government, or does it require Her Majesty s Government intervention and why? The UK is a rich and diverse country, with each region displaying its own unique characteristics. We must therefore recognise the importance of local initiative and leadership, and understand that local people most understand the needs of their region. The devolution of powers to a local level through devolution deals is to be welcomed; our major Northern towns and cities are key economic drivers, and we would welcome the exploration of further devolution deals with some of our larger cities so that they can truly be in control of their own economic destiny. Local people need to drive transformational change, with the proviso that those responsible for key decisions over policy and spending maintain a degree of accountability, and are subject to an appropriate level of scrutiny to safeguard against malpractice. While it is key that challenges are addressed at a local area the Northern Powerhouse cannot succeed if each of our regions work in isolation and in silos; we need to work together and collaboratively, exercising a joined up approach to achieve a common goal. The Government s Industrial Strategy means that it will make sense for all regions to have a joined up approach, but one which will be mapped at a local level. 6. What do you need Government to do? E.g. Is this a regulatory issue? A funding issue? Is this about convening the right people round the table? The Government needs to work with stakeholders, local leaders and communities to understand what the local issues are. Newcastle is different to Leeds, which in turn is different to Manchester and Liverpool. Only by truly understanding local needs, priorities and challenges, can we take the appropriate steps to fix them. Government also needs to ensure that there is financial commitment to addressing the problems which thus far has held the Northern Powerhouse back.

7 7. What can businesses and other groups do to help fix these issues / help further capitalise on the opportunities and assets of the North Businesses need to collaborate and to share good practice; we are keen to engage with Government local leaders and businesses to share our experience and knowledge and to understand how we can work with others to drive transformational change across the Northern Powerhouse. We believe that no region of the country is greater than the sum of its parts and that only by working together and ensuring that all areas of the country are economically viable and competitive, can the country compete on a world stage. Businesses need to be bold and not afraid to take risks and perhaps most importantly need to invest in skills for the future.

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