The green jobs skills gap: How UK plc is already failing to secure its future

The single greatest reallocation of capital and labour since the Industrial Revolution is required to meet net zero by 2050. But British businesses are already falling behind, Paul Simpson discovers.

by Paul Simpson
Last Updated: 26 Sep 2023
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If you think the need to achieve net zero by 2050 has been overhyped, Mat Ilic, CEO of edtech start-up Greenworkx and former policy adviser to Theresa May, urges you to reconsider.

“This is not a political wedge issue, it’s not even just an environmental issue, it is something the leaders of Britain’s biggest businesses have asked in an open letter to prime minister Rishi Sunak, for the government to focus on to ensure that we don’t miss the opportunity. They believe that certainty on our net zero strategy is essential if they are to run prosperous, successful companies in this country in future.”

Politically, these are discouraging times for climate change campaigners. The expansion of London’s ULEZ zone was widely seen as helping the Conservatives hold Uxbridge and South Ruislip in the recent by-election. (A simplistic interpretation, as the constituency didn’t even back Labour in Tony Blair’s 1997 landslide.)

Sunak has since granted hundreds of North Sea drilling licences, prompting Guy Hands, who retired as chairman of British private equity giant Terra Firma in July, to criticise the government’s record, saying: “Ignorance is not bliss when the world is on fire.” Yesterday, news broke that Sunak is considering weakening key green policies, such as potentially delaying a ban on the sale of new petrol and diesel cars and phasing out gas boilers.

This backlash is happening elsewhere. A German bill, effectively banning the installation of gas boilers next year, has infuriated many voters due to the cost of heat pumps and the tight deadline. In the US, 25 states are debating bills to restrict ESG business practices, making it harder, European insurers say, for them to collectively combat climate change.

Remarkably, this pushback is occurring even as, in Ilic’s words, “bad things are happening faster than scientists expected.” Bad things like catastrophic wildfires on Maui in Hawaii, record-breaking temperatures of 52.2C in China and the worst drought in 70 years in the horn of Africa.

Greenworkx’s CEO insists that, beneath such gloomy headlines, many things are moving in the right direction – although he’d like them to move faster. The Rocky Mountain Institute predicts that, by 2030, wind and solar power will supply 30% of the world’s energy. In the last quarter of 2022, according to Eurodata, greenhouse gas commissions within the European Union fell by 4% (over the year, the UK’s were down 2.4%).

Since Jair Bolsonaro lost the Brazilian presidential election last October, deforestation in the Amazon, aka the ‘lungs of the earth’, has fallen by 34% (indeed in April, it was 68% lower than in the same month in 2022).

There is much to cheer, Ilic says, but, as he was working in 10 Downing Street in 2019 when the government made its 2050 net zero pledge, he is disappointed that the UK no longer leads the fight against climate change and fears this could be bad for British business.

“The economic realignment required to achieve net zero by 2050 will probably represent the single greatest reallocation of capital and labour since the Industrial Revolution – and it needs to be accomplished in half the time,” he says. And yet he warns: “Our green workforce does not exist - nor is it being trained.” He believes the government is already falling behind on its hardly ambitious headline target of creating two million green jobs by 2030.

This is partly, Ilic says, the inevitable consequence of a “longstanding misalignment of skills supply versus demand in the UK, exacerbated by the labour shortages of a post-Brexit, post-Covid world” but also reflects common misconceptions about the kind of green jobs required.

“The most relevant talent is existing skilled manual professionals and we already can’t recruit enough of them at wages we can afford.” For example, the UK needs 73,700 new plumbers by the end of 2032, raising a question mark over the government’s stated goal of installing 600,000 heat pumps a year by 2028.

The consequences for British businesses could, Ilic warns, be dire. “If you can’t find people to install heat pumps and solar panels, you’ll struggle to reduce your carbon footprint. And if skill shortages prevent this country from progressing its onshore green energy programme, you’ll be battling high and unpredictable energy prices. And given that, despite all the geopolitical wrangling, most people recognise net zero has to happen, failure to address the skills crisis could put you at a competitive disadvantage purely because your business is based in the UK.”

Ilic has an intriguingly varied background. After an MA in Modern History from Oxford and an MSC in International Relations at the London School of Economics, he has worked as a public services auditor and management consultant, run a charity and held influential roles in the public sector, at the Greater London Authority and later as special adviser to prime minister May.

In his experience, long-term thinking is not something British policy makers’ excel at. That is why, he adds: “It is up to the country’s business community to address this skills crisis together.”

In his view, companies must campaign, loudly and consistently, for the government to be more flexible about how funding for training and skills development is allocated, innovate to make sure that the right people get the right training and encourage employees to use platforms such as Greenworkx to develop “practical green skills in the way best suited to their circumstances”. At present, he says, barely one in a thousand skilled manual workers is relocating into green jobs.

Ilic and co-founder Richard Ng only launched Greenworkx last October but they have recently secured £600,000 in pre-seed funding in a round led by Mangrove Capital Partners. Their environmental edtech business, which uses interactive learning to help people develop skills for green jobs, has also attracted investment from European venture capital group Ada and the CEOs of Multiverse, My Tutor and Octopus Electric Vehicles.

You can’t accuse Ilic or Ng of lacking ambition. Their aim is to place 10m British workers in green jobs over the next ten years (which would help compensate for the many roles rendered obsolete by automation). Nine out of ten of these positions, Ilic says, won’t require a degree and one in three won’t need any qualifications at all. This transition isn’t all about boffins in white coats, it could be socially inclusive, especially if ‘green jobs’ are highlighted by careers advisers. (Spoiler alert: 72% of green employers say that, at present, this isn’t happening.)

There is so much else for British business to focus on right now - the cost of living crisis, supply chain disruption and operational resilience – that leaders may underestimate how urgent this challenge is.

To emphasise his point, Ilic returns to the politically sensitive topic of heat pumps: “To achieve net zero, we need to install 1,600 every day, for most of the next decade. For that, we must train at least 4,000 heat pump installers every year between now and 2030. And to put that in context, we don’t even have 4,000 installers now.”