“The transition to a green economy will result in entire industries going extinct, millions of jobs lost and created, and the most significant churn in the country’s workforce for centuries. At its heart this challenge is as much about education and skills as it is about economic change.
Our research out this morning reveals a dramatic skills gap between the current abilities of the UK workforce and the levels required for new net zero jobs. As Onward’s previous Greening the Giants report brought to light, up to 1.7 million new roles will be required by 2030 for the UK to transition to a fully net zero economy. Yet this jobs potential will not be realised unless the workforce is equipped with the necessary skills, tools and qualifications to fulfil these new net zero roles.
Above all, green jobs require two disparate skill sets: high-level engineering and science graduates and medium-level, technically skilled professionals. Onward analysis shows that a minimum of 56% of future “net zero” jobs will require science and engineering skills, and yet by international standards this type of education in the UK is lacking; the UK ranks 18th out of 33 OECD countries for the proportion of degrees in Engineering, at just 15%. At the other end of the spectrum, the number of vocational qualifications taken has dropped by 33% since 2012, while apprenticeship starts are down more than 20% since 2015. Both of these skill-sets are crucial for the green transition, and both are in a chronic shortage in the UK.
There is a stubbornly profound net zero skills gap in the UK. The average skill level of net zero jobs is 27% higher than the average skill level in the UK and 46% higher than those working in carbon-intensive industries. Overall, one in ten people in the UK will need to do some kind of upskilling or retraining as a result of the transition to a green economy.
This crisis is more distinct in certain regions, especially in Scotland and the North East, who have a skills gap of 29% and 28%, compared to a national average of 24%. Even more worryingly, the areas with the greatest net zero skills deficits are more likely to be those already worst-off; with high levels of deprivation, low average incomes, poor quality of housing stock and high proportions of jobs in carbon-intensive industries.
Addressing this skills challenge will be no simple task, and will require a considered package of policies supported by sufficient funding. If ministers get it right however, there are numerous benefits to be had: net zero jobs are better paid – for every £1 earnt in a carbon intensive industry, £1.30 is made in a net zero industry – and the industries they rely on will largely be concentrated in regions outside of London and the South.
Firstly, the Government should introduce tax relief for firms on the costs of training their employees for the net zero transition, encouraging them to upskill their workforce. Tax relief is already available on the cost of material capital – yet as Onward’s report uncovers, human capital will arguably be the most important asset in the move to net zero.
Secondly, ministers need to take action on technical skills. We need to create a range of technical qualifications that are specific to net zero, and will provide nascent low-carbon industries with the workforces they need. These should include new T Levels amidst their ongoing rollout, along with apprenticeships and degree apprenticeships. In addition, with the billions of pounds currently sitting unspent in firms’ Apprenticeship Levy accounts, the Government should ring-fence a sizeable portion of these unspent funds to fund new net zero apprenticeships.
Finally, particular attention should be turned to those areas most in need; areas in which the skills deficit is amplified by a high proportion of jobs at risk from decarbonisation and a multitude of other factors. In these regions, the Government should look to set up a series of “net zero academies” which will upskill the local workforce, address the shortages in net zero skills and expertise, and attract business and investment to the area.
This challenge is urgent, as we need the skills now to be able to decarbonise effectively later, but meeting it does not need to be a painful process. Getting this right will provide many workers with genuine opportunities for upwards social mobility and it can ensure the UK develops the workforce to not only reach net zero emissions by 2050, but lead the world in doing so.”
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