North West High Speed Rail Skills Strategy & Implementation Plan

Transcription

1 LYCEUM THEATRE North West High Speed Rail Skills Strategy & Implementation Plan New Economy Manchester March Construction Rolling Stock Rail Systems GRADUATES GRADUATES GRADUATES Engineers 940 Civil 4290 Design Train control systems design engineers and technicians 5950 Engineering 3000 Electrical Operations 4290 Mechanical and Design engineers, Engineering Technicians Track design engineers and high output plant operatives trades & installation 1960 Plumbing and heating 3100 Plant Operative 810 Plant Overhead line design engineers and technicians Mechanic/Fitters trades 1530 Construction Railway operation and mintenance Management 5990

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3 North West High Speed Skills Strategy, March Contents EXECUTIVE SUMMARY INTRODUCTION Purpose Approach Document Structure HIGH SPEED RAIL IN THE NORTH WEST Investment in Infrastructure Northern Powerhouse High Speed Northern Powerhouse Rail ( HS3 ) DEMAND OPPORTUNITIES Short Term Demand HS2 Demand HS2 North West Demand Northern Powerhouse (HS3) / HS3 Demand High Speed Rail Jobs in the North West SKILLS SUPPLY ANALYSIS DEMAND-SUPPLY BALANCE Approach Net Additional Need for Training Places STRATEGIC PRIORITIES ACTIONS AND IMPLEMENTATION PLAN APPENDIX A: Stakeholder list APPENDIX B: Workshop findings... 87

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5 North West High Speed Skills Strategy, March Executive Summary Atkins, supported by Albion Economics, were commissioned by New Economy Manchester on behalf of the five LEPs in the North West (Greater Manchester LEP, Liverpool City Region LEP, Cheshire & Warrington LEP, Lancashire LEP and Cumbria LEP) to undertake a study which provides a high speed rail skills strategy and implementation plan for the region. Investment in high speed rail (HSR) offers a once-in-a-lifetime opportunity for the residents and businesses of the North West to benefit from the increased employment opportunities and economic activities associated with the construction of new and improved connectivity in Northern England. HSR is pivotal to the region s growth infrastructural plans, reflecting the transformational opportunity it provides to help rebalance the UK s economic geography. Given the right conditions and actions, the North West has the potential to become the UK s premier resource for engineering, rail and construction skills, maximising the opportunities connected to HSR and related sectors. This builds on the region s strong economic base, its skills and educational assets, its businesses and its people.to do this there needs to be a focus on creating a truly employer led sector skills system, upskilling the existing workforce, and encouraging more young people take up apprenticeships and to study science, technology, engineering and mathematics (STEM) subjects. The strategy set out in this document echoes the sentiments of the recently published National National Infrastructure Plan for Skills The plan emphasises that investment in transport and other infrastructure is a vital component to delivering the government s commitment to improving the UK s productivity, not least in Northern England. It highlights that: government and industry need to work together to ensure we have the right people with the right skills to deliver the ambitious pipeline of 411 billion of planned public and private investment to 2020 and beyond. i The North West already has established a strong reputation of finding innovative but pragmatic ways of increasing the supply of in-demand skills to the market (for example, in the region s construction sector). This collaborative approach to skills planning and delivery has enormous potential as a coordinated response to HSR, making a real difference in addressing the skills challenge and facilitating the release of latent economic and career opportunities. Demand for high speed skills includes: Significant immediate demand for rail skills arising from current investment and replacement demand of an ageing workforce. There is approximate demand for 10,000 new rail industry workers in England for the period , of which at least 1,000 are required in the North. High Speed Rail has the potential to provide between 27,000 (HS2) and 50,000 (HS2 and Northern Powerhouse Rail (HS3)) new direct job opportunities for the workforce of the North West and wider Northern Powerhouse Rail (HS3). Moreover, including tier 1 supply chain effects, construction of HSR infrastructure North of Birmingham could support a total of around 80,000 jobs. Almost 6,000 apprenticeships (3,000 each from HS2 Phase 2 and Northern Powerhouse Rail (HS3)) are estimated to be created, of which around 32% of jobs created are likely to require skills of Level 4 and above. Major planned national infrastructure investments such as HS2 should be used as a catalyst to stimulate the wider promotion and development of engineering skills relevant to a number of key priority sectors across the North West including engineering, construction, advanced manufacturing and energy. With many of the skills being transferrable between sectors, there is an increasing appetite for crossindustry collaboration as the benefits of co-ordinated planning and shared costs is of appeal to the wide variety of business operating in these interconnected sectors. IMMEDIATE DEMAND FOR RAIL SKILLS 10,000 NEW RAIL INDUSTRY WORKERS IN THE UK FOR THE PERIOD IT IS ESTIMATED THAT THE NORTH WEST COULD SEE BETWEEN 8,400 AND 21,000 JOB OPPORTUNITIES CREATED CONNECTED TO HIGH SPEED RAIL. POTENTIAL TO PROVIDE BETWEEN 27,000 (FOR JUST HS2) AND (FOR HS2 AND NORTHERN POWERHOUSE RAIL (HS3)) 50,000 NEW DIRECT JOB OPPORTUNITIES FOR THE WORKFORCE OF THE NORTH WEST AND WIDER NORTHERN POWERHOUSE. 80,000 JOBS WHEN INCLUDING TIER 1 SUPPLY CHAIN EFFECTS APPRENTICESHIP CREATION ESTIMATED AT 6,000 3,000 EACH FROM HS2 PHASE 2 AND NORTHERN POWERHOUSE RAIL (HS3) 32% OF JOBS CREATED ARE LIKELY TO REQUIRE SKILLS AT OR ABOVE LEVEL 4 i

6 6 North West High Speed Skills Strategy, March 2016 Even today, the rail industry is facing significant skills shortages and gaps which need to be overcome in order to ensure that there is sufficient skilled labour to meet the increasing demands of major railway programmes. Compounding the problem, young people are not fully aware of the job opportunities available in the rail sector a profile raising campaign and better information, advice and guidance (IAG) will be critical to achieving the step-change required in the industry. There is also a pressing need to encourage people to study STEM subjects which is central to a modern railway industry, and indeed a modern economy. As highlighted in the National Infrastructure Plan (NIP) for Skills, achieving the necessary transformation in planning for skills provision in the rail sector will require: Aggressive profile raising of the role multi-skill level apprenticeships will play in delivering future skills resources in line with employer needs and in the generation of fulfilling careers for young people. Simplifying and streamlining the number of qualifications in the engineering and construction sectors. Establishing clear professional and technical career routes into the rail and related sectors. Rebalancing vocational provision to deliver more skills at Levels 3, 4 and 5. Strong leadership from employers and professional bodies including a commitment to the sharing of information and collective, long-terms skills planning. The North West is especially well placed to pioneer the actions set out in the NIP for Skills. This is reflected by the region s established track record in effective public and private sector collaboration with a shared commitment to delivering balancing economic prosperity across Northern city-regions. A large quantity of jobs will be created in the construction and civil engineering sectors as well as specialist railway engineering activities including: signalling and telecommunications; electrification and power supply; and rolling stock design and manufacture. Significant additional permanent jobs will be created in transport operations including train driving, maintenance and safety. HSR also has the potential to drive large-scale regeneration programmes centred on new, future-proofed and well connected railway stations. This regeneration activity will add further to the quantum and diversity of new jobs and associated careers in our Northern cities. This potential was clearly articulated in the recommendations set out by Lord Deighton and the HS2 Growth Task Force. The Northern Powerhouse In January 2015 the Prime Minister and Chancellor set out their six-point longterm economic plan for the North West, highlighting what has been delivered, what is underway and the next steps in building a Northern Powerhouse that enables the region to reach its potential as a driving force in the UK economy. The plan aims to: Increase the long term growth rate of the North West. Raise the employment rate in the North West by supporting the private sector, backing business investment and new start-ups in our drive for full employment in the North. Make the North-west a global centre of outstanding scientific innovation. The plan outlined a proposal to deliver large-scale investment in the longterm transport infrastructure of the North West, including 4.5bn having been committed to electrification of existing rail lines, new trains, new urban transport, and a major upgrade to the road network. Overall, the Northern Powerhouse is likely to see around 100billion invested in infrastructure over the next 20 years. The benefits of HSR to the Northern Powerhouse are not just limited to the effects of improved connectivity and agglomeration. Maximising the employment opportunities arising from implementation and operation of HSR in itself is substantial. The North West is ideally positioned to take a leadership role in planning for and delivering the huge skills resource needs arising from investment in strategic railway infrastructure. North West Support The North West of England has the necessary critical mass to respond to the labour demand of HSR. Joining together as a team that pools training strengths will be incredibly powerful. This strategy has started the process; it has been developed with the public and private sectors in the five LEP areas. There is clear support and desire for a joined up approach to respond to this unique opportunity. HSR commands private and public sector support from across the North West. From the outset stakeholders have recognised the impact and opportunity can be spread across the North West and working strategically and collaboratively, the benefits will be realised both in places located on the HSR routes but also in those areas further afield. We have received strong private sector engagement from the North West Business Leadership Team and Chambers of Commerce alongside individual employers. There are a significant number of existing and high growth rail industry companies located in the North West, including Alstom and Siemens. It is important that they drive forward this work, acting to engage and encourage SMEs to understand the opportunities that will arise from HSR.

7 North West High Speed Skills Strategy, March High Speed Rail in the North West Several large rail infrastructure projects will benefit the North West in the coming decade: High Speed 2 (HS2) will be the new railway line from London via Birmingham to Manchester, Leeds and Sheffield. It is planned to be built in two phases: Phase One: London Euston to a new station at Birmingham Curzon Street via Old Oak Common in West London and Birmingham International. Recommendations made by Sir David Higgins have made the case for extending Phase 1 beyond Birmingham to Crewe Hub. Phase Two: The line will be extended North in two legs, one to Manchester Piccadilly ( Western leg ) and intermediate stations are proposed at Manchester Airport and Crewe on the Western leg. Northern Powerhouse Rail (otherwise known as HS3) is at an early stage of development, but is defined as a high speed cross Pennine rail link which will directly connect Manchester, Liverpool (and the wider North West) with Sheffield, Leeds, Hull and Newcastle. It is aimed at stimulating significant growth in economic productivity through hugely improved connectivity and the agglomeration effects of Northern cities operating as a single economy. Northern Powerhouse Rail (HS3) is a centrepiece of the One North and Northern Powerhouse Rail (HS3)concepts and emerging plans. Route options are being examined and the Government is exploring how Northern Powerhouse could be configured and funded to maximise economic and productivity growth whilst managing cost through the achievement of economies of scale. With Crewe s potential positioning at the end of Phase One, the North West has a strong link to both Phase One and Phase Two of HS2. The North West is expecting significant additional investment in other transport infrastructure including rail, which is likely to generate substantial demand for specific skills needs in the future. In order for planned and proposed railway programmes to be realised and the associated economic benefits captured, there is a clear need for the workforce to be adequately skilled and responsive to the needs of the industry tasked with delivering the new infrastructure. Existing Supply of Rail Industry Skills The North West is home to 57 colleges, over 100 private training providers and 13 Universities all of which deliver courses of relevance to the HSR sector. Like other sectors, industry-led skills programmes are increasing in importance and reflect the importance of vocational education and training in today s labour market. The analysis conducted sets out estimates of existing provision of training places across a wide range of skills areas of direct relevance to the railway engineering and construction sector. Key supply side characteristics include: In the North West, the number of STEM A-Level achievements has been increasing since 2009/10 although the region lags marginally behind many other parts of the country. There are approximately 20 railway specific courses currently available through the region s FE sector which provides around 200 trained people per annum. There are 11,560 finishing courses in construction but shortages exist currently in building envelope, steel erection, glaziers and civil engineering. There are 8,360 students finishing engineering courses in the region. There is a relatively small number of students on rail specific apprenticeships (30) in the North West, largely focusing on levels 2 and 3 qualifications. With current planned investment in rail coupled with substantial future investment in HSR, there is an acute need in the North West to ensure large scale growth in the supply of apprenticeships to the industry across the qualifications spectrum. This will be of notable benefit to individuals, the industry, the education and training sector and the wider North West economy. A key ingredient will be to ensure that pathways to employment through apprenticeship schemes are clearly set out. Despite the relatively low number of rail specific apprenticeships in the North West, the region does have a strong apprenticeship culture. This is demonstrated by the 1,220 apprentices in construction and 1,630 in engineering (mostly at Levels 2 and 3). This culture must become more deeply embedded in the region s railway industry including in the supply of high level skills. The North West is an important supplier of STEM graduates through the region s world class network of technically focused universities. This includes the annual delivery of 4,200 engineering graduates and over 1,500 mathematics graduates. There is an obvious need to take steps to retain graduates and highlight the attraction of sustainable and rewarding careers in HSR.

8 8 North West High Speed Skills Strategy, March 2016 There is a perceived lack of coherence and consistency in format and delivery of careers advice. A more integrated, long-term approach to the provision of careers advice will be central to changing negative perceptions of the railway industry and ensuring that pathways to employment are clearly defined and communicated, particularly to young people and womwn. Several private training providers are involved in delivery of rail specific courses which support specific employment pathways (e.g. railway engineering or signalling) in the rail industry. UTCs and FE Colleges also play an important role in delivering higher level courses and together with universities provide the basis for developing high quality technical learning up to degree level and beyond to meet the needs of rail and associated employers in the North West. Need for Additional Training Provision in the North West Our analysis indicates that, to meet projected demand in high speed construction and engineering activities in the North West, the region will need to provide around 12,800 additional training places (8,700 of which are estimated to occur in construction). ii HSR will generate the need for at least 1,800 new apprenticeship training opportunities in the North West in the period up to This will require a step-change in the supply of relevant STEM based apprenticeships to the market. Investment in HSR infrastructure represents both a major challenge and opportunity for the North West. As highlighted, demand from existing projects and those in the immediate pipeline is already substantial. Furthermore, competing demand from other sectors of the economy and major projects planned internationally will require the UK industry to commit to an integrated, long term planning approach to the supply of construction and engineering skills. The North West should position itself as the UK s hub for the supply of construction and engineering skills to the railway and related sectors. This will require taking a bold and decisive leadership role in shaping a coherent future skills supply framework. Taking advantage of the lead in time of high speed projects, the North West is uniquely placed to establish itself as the engine room for the Northern Powerhouse. In doing so, it will set the standards in planning and delivering skills supply over the next 20 years and beyond. To meet the challenge and capitalise on the opportunities, the North West skills supply framework should be characterised by: 1. A commitment to long-term planning and funding, and funding through partnerships between employers and the private and public sectors. 2. Integration within and between construction, engineering and related sector in estimating, understanding and delivering workforce skills to meet anticipated demand. 3. A strongly collaborative mindset across the board including training and educational providers, businesses, industry groups, local government and professional bodies. 4. The definition and articulation of clear technical and professional pathways to employment aimed at all key levels of qualification and education. 5. An effective and targeted communications and marketing strategy aimed at providing good quality information, changing perception of what a career on the railway industry looks like and demonstrating the range of pathways to employment. 12,800 ADDITIONAL TRAINING PLACES ESTIMATED TO OCCUR IN 8,700 CONSTRUCTION HSR WILL NEED TO GENERATE AT LEAST 1,800 NEW APPRENTICESHIP TRAINING OPPORTUNITIES IN THE NORTH WEST IN THE PERIOD UP TO 2035 THIS WILL REQUIRE A STEP-CHANGE IN THE SUPPLY OF RELEVANT STEM BASED APPRENTICESHIPS TO THE MARKET ii For analytical purposes, our research assumes that demand for rail and related high speed skills is defined by that arising from planning and deliver of HS2 Phase 2 and Trans North.

9 North West High Speed Skills Strategy, March Priorities Based on our research and consultation activities, the following strategic priorities have been identified to maximise the skills opportunities associated with HSR in the North West. Strategic Priority 1 (SP1) A 20 year vision to rebalance the economy and contribute to the Northern Powerhouse STEM Increased STEM take up from young people to meet the need for High Speed Rail and related engineering sectors. Ensure a supply of STEM Apprentices to meet employer demand for High Speed Rail Create a truly employer-led rail sector skills system with joined up higher level vocational pathways. Develop a hub and spoke model to work with HS college with a focus on upskilling the existing workforce. A 20 year vision to rebalance the economy and contribute to Northern Powerhouse To ensure the North West achieves maximum employment benefits from HSR, Transport for the North and HS2 ltd should prioritise working with North West skills providers to prepare residents for the opportunities that will arise from the jobs created. This includes building on existing education & training strengths and successes in the North West to maximise the opportunities, whilst ensuring sustainable legacy in terms of building skills and future business and workforce. HSR can be a driver of a twenty year vision for the development of advanced railway and engineering technologies, one that delivers the skills for tomorrow. The vision should be predicated on employer needs, staying ahead of the game in terms of content and delivery and not relying exclusively on existing behaviours. The North West should aspire to become a world leader in pioneering rail technologies as well as fully meeting the current and future demand for more traditional skills. This will require support from across the North West, strong leadership and continual engagement with relevant stakeholders to ensure the implementation and monitoring the success of the strategy.

10 10 North West High Speed Skills Strategy, March 2016 Strategic Priority 2 (SP2) Create a truly employer-led rail sector skills system with joined up higher level vocational pathways. Development of a series of clear pathways that support people from school or employment into vocational, apprentice and academic provision. These should provide high quality professional and technical training routes that deliver skills for the rail sector demanded by business based on competence and qualification. It must build on existing education & training strengths and should be forward looking to new technologies and innovative delivery methods, looking at what works in a local area and using tools such as devolution to enable change. There is a central role for employer led skills provision and investment shaping the curriculum and investing in skills to maximise the impact of skills on growth. Building on its experience in the Employer Ownership of Skills programme, the North West is well placed to investigate employer validated awards. Employers should co-design and deliver the high level skills required in the future for HSR including alternative traction technologies like fuel cells, advanced rail control systems, advanced personal and technology communication systems and materials technologies and low carbon solutions. Strategic Priority 3 (SP3) Develop a hub and spoke model to work with High Speed College with a focus on upskilling the existing rail sector workforce. Design and deliver a North West spoke to the High Speed College hubs in Doncaster and Birmingham that focuses on industry skills, competence, jobs and employment at all levels. This should be forward looking at the future skills needs of the sector and also responsive to current demand working with the existing workforce to upskill in preparation for HSR. This will require courses which could involve elements of blended learning to give employers flexibility to continue to run their business with minimal disruption whilst employees upskill. This should build on identified areas of strength to complement the provision in the specialist skills college. It should also look to address market failure for example in Track, Signalling & Telecoms, Electrification & Power, Traction & Rolling Stock skills supply. It is also important to increase technician and craft skills to maintain and grow an existing infrastructure as well as higher skills going forward. This should command support from the North West LEPs to create a powerful network built upon the region s connectedness, existing critical mass of rail and infrastructure operations and business base. Strategic Priority 4 (SP4) Ensure a supply of STEM Apprentices to meet employer demand for High Speed Rail and related sectors. Engage with large businesses and industry leaders to encourage higher numbers of STEM apprentices in the workforce. Understanding the barriers SMEs have, the public sector should support the training of apprentices and work with SMEs to ensure they have access to apprentices at the right time to help them deliver contracts. This should include working with schools and those not in employment, education or training (NEETs) to ensure that apprenticeships are highlighted as a career option and that they are part of the integrated sector skills system. In upskilling the existing workforce, high quality apprenticeships should be encouraged to allow employees to learn new skills whilst remaining within employment. Collaboratively stressing the immediate and future need for enhanced STEM skills to supply the High Speed Rail sector should be used as a catalyst for enhancing awareness of the importance in growing STEM skills more broadly across a range of key sectors in the North West and Northern Powerhouse. Strategic Priority 5 (SP5) Increased STEM take up from young people to meet the need for High Speed Rail. Using the wider opportunity of HSR to stimulate a significant increase in the number of STEM skills and higher level skills on offer to businesses in and investors considering the North West. Motivate, inspire and offer opportunities to enthuse young people, with an inclusive focus on NEETs, about careers in science and engineering and provide a range of vocational pathways from school through to Higher Education in engineering, including High Speed Rail.

11 North West High Speed Skills Strategy, March Short Term Actions Several actions have been identified with the following being particularly critical in the short-term: Communication Strategy Work closely with HSR stakeholders in public and private sector including HS2 Ltd and High Speed Industry leaders Group (HSIL) to develop a long term communications strategy to promote professional and technical career pathways for young people, and business opportunities for North West businesses in rail and associated industries. Delivering North West leadership of HSR skills development Ensure the region benefits fully from the skills opportunities arising from HSR investments through coordinated action between the public and private sector. This will require strategic leadership arrangements at North West and sub-regional level to deliver the immediate actions through identification of appropriate resources and funding Establish a Northern rail engineering and construction skills task force Convene an action focus crosssector, public-private board to drive forward short-term actions. Pipeline of skilled engineers Develop a pipeline, and pool, of skilled engineers, with a focus on Apprenticeships, to support companies, particularly SMEs, to have the workforce required to take advantage of contracts arising from HS2 and other major engineering and infrastructure projects. High Speed College hub and spoke Develop the original HS2 College proposals further to create a North West hub and spoke to link to the National High Speed College. Tackling immediate demand for rail skills Work with NSARE and providers to meet identified current skills shortages in Track, Signalling & Telecoms, Electrification & Power, Traction & Rolling Stock in the North West and beyond. Critical Success Factors Our success in delivering this high speed skills strategy will be measured by the achievement of: Securing industry buy-in. Demonstrating effective leadership. Nurturing a collaborative working culture. Mobilising public and private sector resources. Demonstrating best practice. Building a competent and skilled workforce.

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13 Title/subtitle/supplementary doc info SECTION 1: INTRODUCTION

14 14 North West High Speed Skills Strategy, March 2016 Introduction I am passionate for highspeed rail. It is important for our country that high-speed rail works for Britain David Cameron, 27th October 2014 The Government has committed to deliver the High Speed Two (HS2) rail link between London, Birmingham, Manchester, Sheffield and Leeds by Furthermore, it has also now established a programme with Transport for the North to develop the One North investment proposals, comprising HS3 or Northern Powerhouse, which is to be a high speed, pan-regional, cross- Pennine rail connection between major Northern cities. Together these present a unique opportunity for the North West to plan for and develop the region s future skills profile in order to maximise the benefits for the North West economy and the region s labour force. 1 Following the publication of the HS2 Growth Taskforce and the Higgins Report HS2 Plus reports in 2014, it became widely recognised that the planned HS2 Phase 2 and emerging Northern Powerhouse Rail (HS3) proposals provide a once-in-a-lifetime opportunity for the North West to take a bold, collaborative and leadership role in delivering skills in high demand from the engineering and construction sectors. Atkins was commissioned by New Economy Manchester on behalf of the five LEPs in the North West (Greater Manchester, Liverpool City Region, Cheshire & Warrington, Lancashire and Cumbria) to undertake a study which provides a high speed rail (HSR) skills strategy and implementation plan for the region. The project seeks to focus on the demand for and supply of core skills needed to deliver HSR proposals including construction, engineering and related economic activities Purpose The North West is extremely well placed to take a leading, strategic role as the resource hub for the supply of railway, construction and engineering skills to meet future national and even international demand. The research conducted in developing this strategy is intended to provide the framework for collaborative and decisive action in making a step-change in planning for and delivering a key group of skills which will emerge from planned and proposed investment in high speed railway infrastructure to and within the Northern Powerhouse, focusing primarily on the North West region. The scale of proposed railway investment has not been seen since Victorian times and therefore has the potential to drive economic growth in Northern regions unparalleled in recent times. However, to capture the latent economic growth arising from investment in HSR will require a fresh and long-term approach to local economic and skills development policies. The key strands of such an approach are discussed in this document with subsequent recommendations for action emerging from the analysis which included extensive consultation with key stakeholders in the region and beyond. Importantly, whilst focused specifically on the potential skills dividend arising from HSR, it is important to recognise that the construction and engineering skills being considered are very much core to a range of key growth sectors including energy and utilities, high value manufacturing, residential and commercial development, roads and schools. Consequently, an industry-led, flexible and common approach to skills development across sectors should increasingly become a feature of UK labour markets. This need is reinforced 1 It should be noted that the analysis contained in this report and the resultant strategy takes a broad, inclusive definition of skills. This includes all aspects of the education and training system including education of people in businesses (in house training) schools, colleges, universities or private and voluntary training providers

15 North West High Speed Skills Strategy, March by the fact that most of the skills in question are already in short supply with significant skills gaps and shortages emerging. Collaboration and integration are at the heart of this strategy and implementation plan. Indeed, it is aimed at a broad range of core stakeholders including LEPs, industry bodies, large and small businesses, education and training providers, large and small businesses, local authorities, government agencies and companies and trade unions. The strategy set out in this document echoes the sentiments of the recently published National National Infrastructure Plan for Skills The plan emphasises that investment in transport and other infrastructure is a vital component to delivering the government s commitment to improving the UK s productivity, not least in Northern England. It highlights that: government and industry need to work together to ensure we have the right people with the right skills to deliver the ambitious pipeline of 411 billion of planned public and private investment to 2020 and beyond Approach In developing the strategy and implementation plan, the following steps were undertaken: 1. An extensive series of interviews were undertaken with stakeholders across the North West which included key national organisations. This provided qualitative information to support the assessment of the current supply of skills and industry demand for skills. A full list of the organisations consulted is provided in Appendix A. 2. Two workshops were held to help define the North West s priorities and to tailor the region s response to the skills challenge. The first workshop was attended by industry representatives and LEPs whilst the second workshop largely targeted educational institutions and training providers. The outcome of the workshops highlighted key emerging themes and initiatives which should be prioritised. In particular, there was wide-ranging support for adoption of a collaborative approach between businesses, operators and the training sector across the North West, working together to ensure that the region s businesses and workforce benefit fully from the emerging opportunities from HSR. A summary of the findings of the workshops is provided in Appendix B. 3. A robust assessment of current training provision was provided by sourcing a range of key data sets. These included data sourced from Higher Education Statistics Authority and the Skills Funding Agency, as well as that captured from education and training providers through Local Enterprise Partnerships and Local Training Provider Networks. In addition, the most up to date information on skills demand from HS2 Ltd and proposals for Northern Powerhouse Rail (HS3)have been collated to provide a detailed assessment of the demand for skills arising from HSR both at a national and regional level. 4. Following the development of key objectives, the draft strategy and implementation actions were reviewed and discussed with key stakeholders in order to generate consensus on taking the strategy and plan forward. Where possible, the analysis has been made at a Local Enterprise Partnership level although for brevity some results are presented at a North West level. The strategy sets out strategic actions and implementation priorities for the North West region as a whole whilst recognising that the impact of HSR will vary from area to area Document Structure The document is structured as follows: Section 2 provides an overview of HSR proposals which will impact directly or indirectly on the North West. Section 3 summaries the projected demand for future HSR and related skills. This demand represents the long term labour market opportunities arising from high speed investment. Section 4 provides a contextual review of skills provision in the North West, focusing primarily on training and education courses relevant to the railway industry. Section 5 pulls together the findings of sections 3 and 4 and sets out the demand-supply skills balance for the high speed railway sector. This concludes by establishing how the scale and type of skills provision in the North West needs to increase and change in order to meet the opportunities presented by HSR. Section 6 outlines the strategy framework for meeting the high speed skills opportunity strategic and establishes key priorities for action. Section 7 sets out the short-term implementation plan in a series of key actions and responsibilities. Appendix A sets out a list of stakeholders consulted during the research. Appendix B summarises the findings of two workshops held in June

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17 Title/subtitle/supplementary doc info SECTION 2: HIGH SPEED RAIL IN THE NORTH WEST

18 18 North West High Speed Skills Strategy, March High Speed Rail in the North West HS2 will change the transport architecture of the North. But it will also change the economic architecture. Patrick McLoughlin, Transport Secretary 2015 Transport for the North is playing a unique role in drawing together existing activity and developing new transformational schemes to add significant value to national transport planning addressing the needs and opportunities for integrated transport for the Northern Powerhouse. The government and business organisations together see that improved rail connectivity will enhance the competitiveness and productivity of the regions served. HSR will substantially increase the amount of capacity (as well as generating further demand for rail travel) on the rail network which will include the release of capacity on conventional networks bringing with it significant local economic benefits. 4 Whilst the provision of additional rail capacity will not itself guarantee economic growth it offers the opportunity to facilitate productivity and regeneration benefits if implemented as part of wider, integrated approach to economic development. City-regions (such as those that the LEP geographies reflect) have a critical role to play in making sure the local economic development policy frameworks and tools are in place in order to capture the benefits. This will include finding the most optimum solutions to releasing the potential agglomeration benefits of collaboration between city regions in the Northern Powerhouse. This section summarises current and future planned investment in HSR and related railway infrastructure. In doing so, it describes the scale of the economic and labour force opportunities presented by HSR. These opportunities are considered in more detail in subsequent sections of this report Investment in Infrastructure In December 2014, the government published the National Infrastructure Plan (NIP), outlining its vision for the future of UK economic infrastructure. Within the NIP, over 700 projects were identified which cover a range of sectors, including rail, with an estimated collective value of 466 billion. It has been recognised that whilst 80% of the total volume of resources will need core construction skills, the remaining 20% will require engineering skills, many of which will be at technician and senior engineer level. Research by Atkins highlights that better strategic planning, which focuses on managing skills-related challenges is essential to the NIP being successfully implemented. This could result in more than 6 billion of cost savings. Infrastructure investment unlocks jobs and supports economic growth through productivity improvements and development effects. There is an appreciation in academia, business groups, various policy think-tanks and government that without investment in productive infrastructure, the UK economy will not be able to grow to its full potential. Many of the NIP projects located in or close to the North West will generate demand for rail related skills. These include connectivity improvements which are expected to contribute significantly to the wider economic prosperity of the region. For example, the construction of the Mersey Gateway Bridge is expected to deliver benefits created through construction effects, business efficiency improvements and the release of latent development opportunities. A full list of the North West NIP projects are provided in the Appendix C. 4 Department for Transport; High Speed Rail A Catalyst for High Speed Britain (2013)

19 North West High Speed Skills Strategy, March Skills contribution to Infrastructure There is a recognition across industry that delivery of strategic infrastructure projects are at risk from skills shortages and gaps. There is evidence that the return on investment from these projects could be compromised by the lack of availability of key skills needed to resource planned projects. Shortages of chartered surveyors, engineers, construction staff and other skilled labour are increasingly being highlighted by business organisations and professional bodies as well as local and parts of central government. Consequently, the government is reviewing projects such as railway electrification programmes in the Midlands due to delays of several years, while there is concern that the Great Western line may not be ready in time for the delivery of 4.5bn worth of electric trains. Skills shortages are a part cause of these delays and if properly planned for and delivered, alleviating pressure in the supply of these skills can both speed up delivery of projects and reduce costs. The growth plans of the LEPs in the North West have all identified the need for intervention to support skills development in connection with infrastructure projects Northern Powerhouse In January 2015 the Prime Minister and the Chancellor set out their sixpoint long-term economic plan for the Northern Powerhouse. Whilst the precise geographical definition of the Northern Powerhouse is yet to be defined, the North West city-regions form a central component. Analysis by the Treasury has shown that rebalancing the UK economy would be worth an additional 44 billion to the North of England. Implementation of emerging plans for the Northern Powerhouse will generate significant benefits for the North West including: Increasing the long term economic growth rate and competitiveness of the North West achieved through agglomeration effects. Raising the employment rate by supporting the private sector, backing business investment and new start-ups in the drive to achieve full employment in the North. Establishing the region as a global centre of outstanding innovation and wider R&D activity. The plan outlined a proposal to deliver large investment in the long-term transport infrastructure serving the North West. This includes 4.5bn committed to electrification of existing rail lines, new trains, new urban transport, and a major upgrade to the strategic roads network across the region. Moreover, the region will benefit from the 42.6bn planned investment in new high speed connections to and within the Northern Powerhouse. The benefits of HSR to the Northern Powerhouse are not just limited to the effects of improved connectivity and agglomeration. Maximising the employment opportunities arising from implementation and operation of HSR in itself is substantial. The North West is ideally positioned to take a leadership role in planning for and delivering the huge skills resource needs arising from investment in strategic railway infrastructure Continuing Levels of Investment in Rail As already highlighted, investment in rail features prominently in the Government s plans for the Northern Powerhouse and the National Infrastructure Plan The NIP highlights eight rail programmes within its Top 40 priority infrastructure investments including HS2 and upgrades to existing rail networks. Accordingly, the government is investing 50 billion in HS2 and 9.4bn in improving the rail network across Control Period 5 ( ). 5 Table 2-1 Planned Major Rail over the next 20 years Network Rail Specific Digital Rail TFL: Future Plan Cross Rail & (Cross Rail 2) HS2 Source: NSARE Network Rail Control Periods are the five year timespans used for financial planning purposes

20 20 North West High Speed Skills Strategy, March 2016 Transformational investment is required to realise the potential of the Northern Powerhouse. We need High Speed 2. We also know we need radically improved east-west connectivity enhancements by road and rail for passengers and freight, and for these enhancements to integrate with High Speed 2. It is critical that the connections are made to integrate these schemes with each other, and with classic rail and local transport systems, to create an integrated network that spreads economic benefits across the whole of the North. Transport for the North Spring Update 2016 Table 2-1 highlights the main groups of strategic rail investments planned over the next 20 years. It highlights the particularly intense period between 2018 and 2030 when implementation of all long-term projects coincide. This raises obvious challenges in terms of meeting the aggregate labour force and skills requirements arising for delivery of these large projects. Containing the cost of infrastructure development and particularly HSR is vital in securing value-for-money and ensuring the project is delivered in its entirety. Policy makers are naturally keen to contain the threat of cost increases which includes those related to skills gaps and shortages. The North West can take the lead in managing this element of cost control in the high speed labour market Skills Challenge in Rail Industry The rail industry is facing the biggest rail investment programme since Victorian times 6. Due to the scale of investment and the last peak in investment, there is a recognised potential skills shortage on the horizon. The Department for Transport acknowledged in a recent report to the House of Lords that the UK had a skills gap in railway engineering and advanced construction and that a recent report had identified a need to substantially increase the supply of engineers in the UK. 7 It is estimated that the UK will need 100,000 engineering graduates every year until 2020 just to maintain the current employment levels whilst in the rail industry shortages are forecast in signalling & communications and traction & rolling stock 8. NSARE research shows that over 10,000 workers will be needed in the next five years in the UK irrespective of HS2, and around 40% of these will replace people retiring. There is also a need to up-skill the current workforce. Only 17% of existing railway engineering workers are qualified engineers and technicians with suggestions that up to a third of the workforce could be required to be upskilled in order to adapt to the application of new technologies. The rail industry has many strong linkages with other sectors, notably manufacturing and construction. Whilst there are specific skills gaps and shortages in the rail industry (e.g. lack of suitable skills connected to the introduction of the European Rail Traffic Management System, Digital Railway), there are also broader skills challenges being faced by rail and other key sectors (e.g. lack of engineering skills in the labour market). This highlights the opportunity of taking a multi-sector approach in responding to the skills challenge and the shared benefit of doing so (e.g. controlling wage and project delays). Across engineering and the rail industry, women make up a minority of the workforce. For example, only 23% of managers in the rail industry are women 9. There is also, in combination with other STEM sectors, a lack of ethnic diversity in the sector. There is also a perception challenge in the rail sector. The HS2 Growth Task Force identifies that railways have an image problem. Many people lack understanding of modern-day engineering, and parents and children do not understand that HS2 will open up opportunities for well-paid careers. There is a programme of work by organisations including HS2 Ltd, the National Skills Academy for Railway Engineering, RSSB and Rail Industry Association (RIA) focused on changing perceptions of careers in the industry and seeking to highlight the potential benefits of employment in rail. 6 Article accessed in July 2015: 7 Article accessed in July EngineeringUK 2014 Report into the State of the Industry 9 Rail Technology Magazine, 2012, Skills gaps in the rail industry accessed in July 2015:

21 North West Skills Strategy High Speed 2 High Speed 2 (HS2) is the Government s proposal for a new high speed railway line that will run from London via Birmingham to Manchester, Sheffield and Leeds, to be built in two phases. HS2 will link eight of Britain s ten biggest cities, bringing these cities within 20 minutes of each other and two-thirds of people in the North to within two hours of London. Analysis undertaken by KPMG 10 suggests that that investment in HS2 offers strong returns that are resilient to a broad range of eventualities and risks around costs, demand growth and the performance of the economy. Whilst KPMG s analysis does not fully capture the full range of potential benefits from investment, it does highlight the opportunities for businesses and people in one area to connect with businesses and people in other parts of the country. HSR commands private and public sector support from across the North West and leading figures from the region played a prominent role on the HS2 Growth Task Force which provided the stimulus for this research. The Growth Task Force note that in addition to productivity improvements, the wider benefits of HS2 will include: Additional capacity Urban areas like Crewe, Manchester, Liverpool, Preston and Carlisle will benefit from movement of a significant proportion of our inter-city services from the existing railway onto the new HS2 lines releasing space for additional commuter, regional and freight services. Faster Journeys The HS2 network will enable significantly reduced journey times compared to today particularly for Greater Manchester and Cheshire & Warrington 11. In addition to this, other areas in the North West will benefit from increased connectivity, with reductions in journey times for areas in Lancashire, Cumbria and Liverpool to London and Birmingham. Jobs HS2 will also help to create jobs. There will be jobs in building and operating the railway, and, in the cities served by the network. HS2 will also stimulate job creation both through the regeneration opportunities it will facilitate in city centres. For the first phase, Department for Transport in 2012 estimated that HS2 could support an additional 40,000 jobs in the areas served by HS2 12. The second phase is expected to offer similar numbers of job opportunities for the areas directly served by HS2 (e.g. Manchester and Crewe) with positive knock on impacts across the region HS2 Phase 1 Phase 1 will stretch from London Euston to Birmingham Curzon Street with intermediate stations in West London (at old Oak Common) and at Birmingham Airport / Interchange. Following the recommendations from Sir David Higgins, Crewe is being explored as a potential extension to bring forward economic benefits whilst cutting overall costs. The recommendations from Sir David Higgins include: The line North of Birmingham should be extended to a new regional transport hub at Crewe by 2027, six years earlier than planned. The proposed direct HS1-HS2 overland link in North London should be scrapped. Plans for Euston should be reconsidered; an attractive alternative proposal might be a level deck design that would enable access from one side of the station to the other. Plans for Phase 2 should be developed alongside Network Rail s Strategic Business Plan for the five-year control period starting in 2019; this could bring forward the Hybrid Bill for Phase 2 to These recommendations were followed up in October 2014 with a more detailed report stating that the proposed North West hub should be at Crewe (rather than Stoke) because that is the best way to serve not just the local region, but also provide services into the rest of the North West, North Wales and Merseyside. The report also strongly recommended that its delivery should be accelerated to 2027 instead of 2033 so that the North, and Scotland, begin to feel the benefit of HS2 as early as possible. He also recommended that the possibility of running classic compatible services to Stoke-on- Trent, Macclesfield and Stockport be investigated. In a statement to Parliament the Secretary of State in 2014, Patrick McLoughlin, said that 13 : the Government s consideration of the evidence so far indicates that routing the western leg via Crewe would be the right strategic option. That is still to be confirmed. But we will work on ways to accelerate delivery of the section to Crewe, pending a decision on the route in The bringing forward of the phasing to Crewe would have multiple benefits including bringing forward of the high growth city proposals 14. As yet, the evidence that exists in connection to job demand is reliant on a scenario connected to Phase 1 not coming to Crewe. 10 High Speed 2 Ltd - Regional Economic Impacts - HS2 ltd High Speed Rail: Investing in Britain s Future Decisions and Next Steps - DFT High Speed Rail: Investing in Britain s Future Decisions and Next Steps - DFT Written statement to Parliament - Transforming transport connectivity in the North: accessed July 2015: 14 All Change for Crewe Strategy & Prospectus Cheshire East Council & Cheshire & Warrington LEP 2014