“There Are Very Significant Skills Challenges": Sir John Armitt
Credit: National Infrastructure Commission
7 min read
As the government unveils 150 infrastructure projects, National Infrastructure Commission chair Sir John Armitt tells Sophie Church the UK needs to be realistic about how it will deliver them
With the UK economy sliding further into the red, Rachel Reeves has pinned hopes for growth on 150 new infrastructure projects around the UK. These include a new runway for Heathrow, ‘Europe’s Silicon Valley’ arcing from Cambridge to Oxford, and a Lower Thames Crossing.
But according to National Infrastructure Commission (NIC) chair Sir John Armitt, the UK lacks the skilled workers to deliver the Chancellor’s vision.
“Assuming we’re talking about projects of significant scale, it’s going to be challenging,” he tells The House. “There are very, very significant skills challenges. The difficulty is that resolving those is not a short-term issue; it’s a longer-term issue.”
Different sectors are competing in the UK to recruit skilled employees, he explains. We are also competing against other countries, particularly in Europe, that need skilled workers to deliver their own infrastructure and decarbonisation projects.
I can’t see the private sector being able to invest it all
“We’re going to be competing for the same material resources [and experiencing] the same supply chain challenges – those supply chain companies need the skills in order to make whatever is necessary.”
While the government offers a Skilled Worker and Global Business Mobility visa, changes made under the Conservative government – carried through by Labour – demand employers only recruit overseas workers if they earn at least £38,700 and £48,500 respectively. Many skilled jobs in infrastructure do not meet this threshold.
“I’d like to see a more open approach to being able to attract people in from outside the UK,” says Armitt, who would welcome the government increasing the number of skilled visas available to overseas workers.
The bigger hurdle, he suggests, will be attracting “home-grown” talent into skilled roles.
“I think the weakness that we’ve had over the last probably 50 years is that we have not been able to pay and get the right focus and emphasis on those 50 per cent who don’t go to university,” he says.
“It was probably easier 50 years ago, because five, 10 per cent of people were going to university, and so the colleges for further education and skills education were far better established in those days. I think we’ve got to get back to that.”
Attracting the younger generation into skilled employment may be a tall order. Official figures released last month show 987,000 16 to 24-year-olds are not currently in education, employment or training – the highest level in 11 years.
“It’s horrifying: a million young people not in education, training or employment,” says Armitt. “That can’t be right. You would have thought that we should be able to tackle those issues at home. We’ve got to tackle them with added vigour, I would argue,” he says.
The Chancellor agrees, branding the rising number of young people out of work, education or training a “stain on our country”. But while Labour tries to get people working, it remains unclear whether job creation in renewable energy infrastructure – the party’s much-vaunted benefit of an oft-maligned sector – will be realised.
According to analysis by the Conservative Party, Labour’s drive for net-zero will create more than 170,000 jobs – but they will be in China, where technologies such as solar panels and wind turbines are often produced.
Is Labour selling a false prospectus?
“I’m sure it’s disappointing to people that, if we take offshore wind, the clever bits largely come from outside the UK,” replies Armitt.
British workers manufacture the external blades and tower for wind turbines, but the turbine itself and internal systems are largely imported from elsewhere: “I think everybody would think it was better if we could do more of that in the UK.”
It’s horrifying: a million young people not in education, training or employment
That will only happen “if the right environment exists for companies to believe that they can effectively invest in those factories and facilities”, he says. “That will be about: how easy is it going to be to create that factory? How long is it going to take? Is the skilled labour going to be available?”
On a mission to assert the UK’s economic relevance, Reeves heaped praise on Heathrow for investing billions in its own expansion, marking it “the latest in a series of UK investment wins”. Heathrow boss Thomas Woldbye later claimed building a third runway by 2035 would not draw from the public purse.
The NIC chair disagrees. “It’s a private sector investment largely at the end of the day, but I think there will need to be some public investment,” he says.
“If you’re going to move the M25 and then put it back, but put it back in a tunnel, and the runway is going to go over the top, that’s going to be very expensive. That’s adding to the cost of the runway and terminal buildings and everything else.
“At the end of the day, there’ll have to be recognition that there will need to be some public investment, because I can’t see the private sector being able to invest it all.”
Has the government been clear with the public about this cost?
“No, because it would argue it doesn’t know it at the moment,” says Armitt. “Until Heathrow produce an updated scheme showing what’s required, it’s going to be at least five years, I would think, before you see any spades in the ground.”
While Woldbye has said he hopes the runway will be built by 2035, Armitt expects 2035 to be “the earliest” we will see airplane activity at an expanded Heathrow.
“We’re not going to realise the benefit of Heathrow [within this Parliament],” he adds. “But you can get people believing it’s going to happen in that period of time, giving government credit for the fact that it’s got it going, even though it may not be delivering.”
However, businesses have warned the current regulatory model will pass on costs for expanding Heathrow to the public – potentially jeopardising the government’s store of goodwill.
Surinder Arora, the chair of a group owning 16 hotels and land around the airport, told the BBC that the “current monopoly” at Heathrow allows the airport to overcharge for many services, such as water, parking and construction. “If they just carry on the same model, everyone else will end up paying for it,” he said.
Last week, the Chancellor summoned regulators to Downing Street to discuss plans to cut bureaucracy in infrastructure projects. Armitt says he fully supports Labour tightening the reins on regulation. “We’ve argued in the past that the government does have a responsibility to give clear direction to the regulators to the outcomes that it wants to see. I think that that needs to continue,” he says.
But while pro-growth campaigners lament what they perceive as over-regulation in nuclear energy – no new nuclear power stations have been built since the 1990s – Armitt chooses his words carefully when apportioning blame.
“On occasions we’ve gone too far in constantly wanting to change the designs [of nuclear power stations], and therefore inevitably giving the regulator responsible for safety a need, or a belief of: ‘I need to look at this’,” he says.
When Sizewell B was designed in the 1980s, regulators asked designers to proceed considering the probability of a 747 jet falling out of the sky onto the station at the same time as an earthquake hitting the area. Armitt doubts that regulators have “walked away from” this level of scrutiny today.
However, he says regulators have slightly capitulated on how far they regulate nuclear station construction. For instance, the Office for Nuclear Regulation has approved Sizewell C on the basis that the developer will copy the existing Hinkley station design, which speeds up the process.
“That’ll be the first time in this country that the regulator – the nuclear inspectorate – have actually, in a sense, pre-approved a design and said, ‘We’re not going to be seeking any betterment,” Armitt says.
Armitt, 79, will leave his post as chair of the NIC in July after nearly five years. Having chaired the Olympic Delivery Authority, headed up the company that delivered the Channel Tunnel and served as Network Rail’s chief executive, what will he do next?
“I want to keep going. I want to keep the grey matter going,” he says. “It’s a matter of finding something which enables me to come back to this issue of satisfaction through work, and satisfaction through making a contribution, so I can continue to make a contribution in the way hopefully I have in the past.”
