Chief Exec’s report Q3 2024
Read the full Q3 2024 Quarterly Review
3 minute read
A key talking point for the last quarter from a business point of view has to be the election of a new UK Government, and on this occasion the polls called it right, with Labour sweeping into power on the back of some impressive gains. Change brings opportunity, and for our engineering sector this comes with an ambitious and laudable industrial strategy that we will be watching keenly as we hope that it yields the gains we all would like to see.
Whilst we knew that the UK public purse was pretty skint, the scale of the financial challenge as perceived and portrayed by our incoming government brings concern that not all of that ambition may be funded. In the aftermath of the UK election, I referred to analysis that in our previous governments total term, the UK’s industrial strategies had lasted an average of just fourteen months, and as a result, outside times of turmoil had returned at best stagnant growth. It would be good to see this fresh one given the chance it deserves to do its job and enable the economic benefit that is sorely needed.
Closer to home, for Scottish Engineering these quarterly results didn’t match the upbeat forecast we shared at the beginning of June, but they do match the profile last year of an initial two positive quarters follow by a dip over the summer months. The final quarter of 2023 saw an improvement in order intake and for this report, continued optimism and positive forecasts despite the actual results in quarter three suggest we may see a mirror of that full year trend again this year.
To pick another metric that stands out, what does fourteen quarters of consecutive positive intention to hire staff tell us? Is it that we have a booming growth in the people employed in our sector? Or does it underline that companies are continually striving to hire key skills whilst battling against losses due to retirement and a buoyant jobs market for key skills?
Well, the ONS workforce jobs by industry report did record an increase of 12,000 in our sector for the year to March 2024, with a similar picture for Wales, a smaller increase for Northern Ireland, and a surprising overall fall of 58,000 for England. The increase in Scotland is welcome news, but sadly only one part of the answer.
The reality is that every conversation with industry from visits, calls and member events underlines an ongoing and increasing crisis in the availability and impact of skills shortages for our industry, and this consideration coincides with the closure in just three weeks of the latest consultation on skills from the Scottish Government.
Titled as the Post-school education and skills reform, it states its intent is to consult on what public bodies do to simplify responsibilities for apprenticeships and student support. At its heart it outlines three options to consider: Firstly, do nothing (but then states that really isn’t an option); Second delete Skills Development Scotland (SDS – the body responsible for among other things the administration and funding of apprenticeships) moving its responsibilities to the Scottish Funding Council (SFC); And thirdly delete both SDS and SAAS (Student Awards Agency Scotland) moving everything to the responsibility of SFC.
We make no secret of our deep concern that a path is being laid where the strongest advocate for work-based learning and apprenticeships in the Scottish skills landscape will be disbanded. But set that aside because the reality is the entire premise of the consultation is flawed focusing as it does on a perceived complexity in the current landscape that is irrelevant to the current skills crisis.
Ask instead a better question: what impact will the selection of any one of the three of these options have on the skills shortages now and in the near future across industry? If the answer is nothing, then we are not presenting the right options. Following options two or three as seems preferred will simply tie up the already scarce resource and funding for skills whilst we pontificate on how to enact an option that will make no difference to the crisis that is already here. And meanwhile the opportunities and economic benefits from well-paid and fair work in an expanded engineering and manufacturing sector will be missed to all our detriments.
Paul Sheerin
Chief Executive
Scottish Engineering
