Young People: Skills (Youth Unemployment Committee Report)

Viscount Waverley Excerpts

Wednesday 23rd November 2022 Grand Committee

[Viscount Waverley (CB)]

My Lords, the noble Lord, Lord Baker, called for bringing skills back into education, and I shall attempt to present a bridge to that end. Before doing so, I fully sympathise with the frustration of the noble Lord, Lord Knight, with silos—a culture that needs urgent dismantling. Being holistic is the key word for going forward, generally through everything in life and particularly in relation to the UK’s management of itself.

I have happily slept-walked into a sector of critical importance to the United Kingdom—namely, the future of the UK’s freight and logistics, for which I serve as co-chair to the parliamentary group. This is to be a strategic evaluation by region, then analysed nationally by modal, by non-conflicted persons in an evaluation for decades to come. Skills and training are crucial, so I welcome this opportunity to draw attention to the opportunity that the sector presents as a career path for the youth of today.

As background, logistics is a large and growing industry across the UK, employing 2.56 million people, either directly or indirectly, accounting for 8% of the workforce. Top employers, of which 11 are pure logistics companies, include world-class players such as DHL Express, Wincanton and CEVA Logistics. Employment has nearly doubled since 2012, outpacing the rest of the UK economy and accounting for 8% of the workforce, contributing £139 billion gross value to the UK economy. A helpful independent report by Frontier Economics, supported by Logistics UK, has looked at the economic, social and environmental impact of the logistics industry, with findings based on a combination of quantitative and qualitative analysis.

A recent school career leaders presentation has challenged current perceptions about logistics roles as presenting an open career structure with the least number of managers with degrees. Some 30% of all roles advertised in the south-east Midlands are for logistics roles, of which one-third are above £30,000, well above the national average. A range of growth forecasts shows that we could be looking at creating 25,000 new jobs over the next 15 to 20 years in the warehousing sector alone.

All this brings me full circle to the report before us this afternoon. Logistics provides opportunities for people who may not otherwise be in work. An independent survey indicates that 20% of people currently in logistics were previously unemployed, of whom one in four was long-term unemployed. Almost two-thirds—62%—of logistics managers do not have a university degree.

There is, however, a call for reform of the apprenticeship levy so that funds can be spent on alternative training and qualifications. Issues raised as barriers to using apprenticeships typically include the 12-month minimum duration and the 20% off-the-job training requirement—in other words, one day per week spent training. It is suggested that they do not get as much out of the levy as they put in, which is supported by the fact that, during the financial year 2019-20, only 15% of apprenticeship levy-paying employers fully utilised the funds available to them. A skills levy, as opposed to an apprenticeship levy, would help to bridge the gap between shortages and skill acquisition. The apprenticeship levy—although originally hailed as a mechanism to link young people wanting a solid start to their career with businesses that needed next-generation knowledge, skills, and behaviours—has not reached the desired target audience.

It should be underlined that truck drivers and other vehicle operators currently struggle with the rigidity of the apprenticeship framework and could recruit and train more people more quickly if it were reformed into a skills levy. As an example, there is a heavy goods vehicle apprenticeship standard; it takes 14 months to complete, but the drivers have their licences in six months. Most employers continue to train their own drivers to their specific standards and work practices long after they have passed their tests, meaning that the continued requirement for individuals to attend college once a week is rather redundant.

While advanced and higher-level apprenticeships are important in professional development planning and for retention, with young people having an appetite to learn and businesses having a need for talent, the pipeline that joins them seems at present not to be sufficiently accessible for logistics and transport. Simplifying offerings and making more of portable modules would go some way to rectify those challenges. Thinking creatively, outside of formal qualifications, could lead to accredited modular learning that could then, if desired, lead to a qualification later. This is particularly important when considering the lean margins of the sector. If qualifications are to be company funded outside the levy for smaller organisations, a lack of return on investment could cause setbacks to future investment.

The propensity to put qualifications on a pedestal over on-the-job learning needs to be revisited to prevent the alienation of those looking to progress. Accredited training is a viable option as an alternative to more traditional qualifications for immediate return on investment to support those who want to pursue a career in the transport sector with businesses that desperately need those skills in their workforce. The Assured Skills Academies in Northern Ireland provide an interesting blueprint.

Generation Logistics is initially a 12-month programme of engagement and promotional activities that aims to bring the industry together, shift perceptions and encourage the next generation of logistics workers to engage with available opportunities. Generation Logistics’ campaigns are centred around increasing the diversity of the sector, ensuring that, when people across all demographics view Generation Logistics material, they see themselves reflected.

Addressing the aspiration gap is also key, profiling the managerial jobs that many will be unaware exist in the sector and so dismiss a career in logistics as not being one that matches their ambitions. Promoting the diversity of opportunities should support inclusion, noting the range of opportunities that are available that focus on certain knowledge, skills and behaviours, not on background, race or gender.

There is a danger, when considering the promotion of the profession, that only the more attractive side is shown to target audiences: robotics, driverless technology and more. However, it is critical to strike a balance to ensure that the sector not only recruits, but retains, new talent. Demystifying the sector, in addition to commonly held myth, is perhaps an attraction strategy better rooted in the everyday roles the sector is crying out to fill. Re-education, such as promoting the benefits of shift work as flexible, rather than undesirable, makes for interesting campaigns for both young people and career changers alike.

To change this perception, those working in logistics, transport and supply chain operations must be positioned as practitioners and professionals against benchmarked standards. Young people cannot be what they cannot see, and logistics is the very definition of a hidden industry, operating behind closed doors and yet keeping the United Kingdom moving. A national campaign to promote the logistics profession to underrepresented groups is being spearheaded by Generation Logistics, supported by the Department for Transport, and is aiming to address the negative perceptions of the sector and promote the availability of attractive, fulfilling jobs at all levels.

[Lord Harlech (Con)]

My Lords, before we continue, I remind your Lordships that the advisory Back-Bench speaking time is seven minutes. It says “advisory” but it is actually mandated.