20th February 2017
OPITO’s interim chief executive John McDonald has given evidence about the oil and gas industry’s skills challenges as part of an inquiry by Westminster’s Scottish Affairs Committee into sustainable employment in Scotland.
Mr McDonald told the panel of MPs which included Pete Wishart, Deidre Brock, Margaret Ferrier, Chris Law, Ian Murray and Anna Soubry, about the impact of the global drop in oil prices on employment in the short and long term.
The Committee, which met in Aberdeen on February 20, was seeking insight into the impact this is having on employment, what the future looks like for the sector and what government can do to help it recover.
MPs are also engaging with business representatives about the role of low-cost and flexible labour in making businesses competitive.
Mr McDonald raised a number of issues including the drop in number of graduate opportunities and the expected impacted of the new Apprenticeship Levy which comes into force in April 2017.
“A £10m Workforce Development Fund has been announced which is intended to help employers work in partnership with colleges to up-skill and re-skill their existing workforce and address skills gaps. We will be interested to see how this initiative might assist companies in the oil and gas industry,” he said.
“We are finding that there has been a reduction in the opportunities for graduates to receive on the job experience, largely due to the fact that employment rates have fallen across the industry in the last few years.
“The introduction of government funding for an ‘internship fund’ would help to enhance and sustain the education of graduates and would allow them to gain some hands on experience, which is vital in the oil and gas industry for work readiness. Perhaps this could be something considered as part of the funding available under the Workforce Development Fund.
The UK Government estimates that the new Apprenticeship Levy will raise £3billion annually over the first five years following its introduction. OPITO has repeatedly called assurance that the implementation of the new tax is fair and practical and will add legitimate value to skills development in the oil and gas workforce.
“Companies are unlikely to be inspired to invest yet more money into apprenticeship training as many will see a chunk of their budget disappear through the Apprenticeship Levy contributions but with no positive consequence to their learning and development budgets since no greater access is being afforded to them through government funding,” said Mr McDonald.
“If companies who are paying into the Apprenticeship Levy cannot allocate further funding towards apprenticeship training, we are asking whether there is scope for government assistance with the cost of apprenticeship training for these companies who otherwise will essentially experience ‘double-dipping’ from their training budgets if they continue to commit to apprenticeship training. We will be discussing the potential for Scottish Government to help offset this cost with the offer of some fully funded apprenticeships for the industry.
“While we appreciate the predicament of the Scottish Government, having a policy devolved to it with very little consideration on how it would impact upon other social and economic policies already in place, we have a responsibility to look after the interests of our industry and are looking for the Scottish Government to continue to work with us and other organisations to ensure we do the best we can to support the current and future workforce.”
Ahead of the visit, committee chair Pete Wishart commented: “Our visit to Aberdeen comes at a difficult time for the oil industry. For five decades it has been one of Scotland’s major providers of highly skilled, high-quality work but it is now going through a difficult period. The number of jobs supported by the industry may have fallen by up to 100,000 since 2013 and tax revenue for 2015-16 is expected to have been negative for the first time ever.
“We will be asking what support has been given, either by the industry or by government, to those who have been affected by recent job losses? Is oil and gas still a profession worth looking at for someone looking for somewhere to build a career?”