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Paul Jackson, chief executive, EngineeringUK

Time will tell if George Osborne's latest spending review is good for engineering.

Having had a mixed reception across the business world, the impact of the Government's new apprenticeship levy, announced by the Chancellor in his Autumn Statement, may be very different for firms across the engineering sector, says Paul Jackson.

Engineering pays above average salaries, an important detail given the criteria for the levy is not (as anticipated) the size of the company, but the size of the salary bill.

With 0.4% of engineering companies employing over 42% of the workforce, there is a real question around whether we can be confident of getting the right capacity. Engineering is an industry dominated by SMEs: almost 80% of engineering firms have fewer than five employees. However, it is the small number of large companies that generate the greatest levels of employment, resulting in a uniquely skewed distribution that brings its own challenges. 

"Government investment is a boon for any industry but as ever, the devil is in the detail. We will need time to really take stock and see how much engineering will gain from this latest review."

Other elements of the Chancellor’s Statement have been more widely welcomed by the industry, not least the capital investment in infrastructure, taking in (amongst others) a range of transport projects, road maintenance, electrification of railway lines and an acceleration in house building. There was also support for the announcement that the science budget is to be protected for the next five years. 

Both are vital to the prospects of the industry and both are reliant on a steady stream of new talent entering the workforce. Will engineering employers reap the benefits of the apprenticeship levy with an influx of ‘earn as you learn’ recruits or simply end up subsidising other parts of the economy?

We should also be asking whether we will continue to see the same investment in research and development and innovation in business once Research UK subsumes Innovate UK and the shift from grants to loans is complete. Almost every industry supported by Innovate UK relies on engineering expertise, either directly or indirectly. Will a rise in the number of catapult centres balance out the change and will Research UK offer the same platform for collaboration and innovation? 

At EngineeringUK we have received direct support from Innovate UK for our Knowledge Transfer Partnership with the University of Bristol. This joint activity will support engineering companies throughout the UK in becoming more sophisticated customers and supporters of educational engagement, which should in turn support the development of the industry’s talent pipeline.

While we continue to have an annual shortfall of engineers and technicians in the tens of thousands, that talent pipeline is not restricted to those working in engineering roles.

"Are universities and FE colleges in a position to take on more students in these subjects? Are we taking seriously enough the need to build capacity to deliver the required change?"

As things stand we do not have the teachers and academics in further and/or higher education to deliver the rate of qualified workers the industry so desperately needs. The introduction of maintenance grants for part-time students and greater access to loans for anyone looking to do a second degree in a STEM subject could push up the numbers interested in engineering qualifications.

But are universities and FE colleges in a position to take on more students in these subjects? Are we taking seriously enough the need to build capacity to deliver the required change?

Government investment is a boon for any industry but as ever, the devil is in the detail. We will need time to really take stock and see how much engineering will gain from this latest review. If the investment in infrastructure and the aerospace, automotive and energy sectors is accompanied by a strong programme of innovation and a system that supports the development of new talent then we may be onto a winner.

Paul Jackson is the chief executive of EngineeringUK
www.engineeringuk.com @_EngineeringUK