Levelling up Digital Skills and Jobs in the Post-Lockdown Economy

 I recently blogged on an opportunity to influence Government policy on Covid recovery plans and mentioned that I would be chairing ZOOMs for two very different audiences, one national, the other London-centric. There were significant differences and the shared priorities were also interestingly different to those of the many lobby groups seeking to use the opportunity to progress pre-Covid agendas.

Perhaps the three biggest differences in priority were:

  1. Levelling up geographically depend on broadband upload (not download) speeds to enable local SMEs and home-based workers to work creatively (e.g. design work) using client/corporate cloud-based systems for more that just data access and low volume interaction.
  2. Levelling up socially depends on affordable, secure and usable full fibre/4-5G broadband connection (not just theoretical gigabit “access”) for all,  particularly those in social and/or shared accommodation.
  3. Skills and Support programmes need to be easy to understand, joined up and begin with a focus on helping this years crop of school-leaver and graduates, plus those who jobs have been lost or are at risk, acquire skills needed by employers who are already recruiting locally and/or on-line.

Read on for the analysis and recommendations.  The two most urgent recommendations (with added detail) are to prevent IR35 abuse and fraud (against independent contractors more than by them) and the planned Home Office reversion to paper based right to work (and a consequent re-opening of floodgates to fraud) from de-railing the return to work.

The BIG questions were:   

  • How do we handle a lost (and aggrieved) generation?

Many, perhaps a majority, of the 350,000 students graduating from University this year feel they have been badly treated by their University and do not have the skills to be employable in the current jobs market.  On average they will earn less than a lorry driver of the same age for their first decade of employment. In some areas the going rate for those with an HGV license is above that for graduates of all ages – including because it is the gateway to some of the highest paid jobs in digital infrastructure construction (including the use of mobile construction equipment which requires an HGV license).

Many school-leavers face similar problems and the qualification which makes the most difference to their potential earnings is a clean driving license. Add the willingness to get out of bed early in all weathers (e.g. to train for a sport) and the ability to use a mobile phone (as opposed to a computer) and there is a wealth of well-paid employment on offer in most parts of the UK.

  • How do we persuade the skills establishment to lead rather than resist change?

UK public sector skills provision (including planning for new programmes to aid recovery) is dominated by the desire of half a million FE and HE staff and “establishment” contractors to build the future around traditional labour intensive, course and qualification structures and consultation processes that they know and understand.

But most of skills to be employable can be acquired rapidly (days or weeks rather than months and years) and then upgraded and refreshed incrementally over time, including as needs change, using modular low cost, on-line and/or blended courses, supplemented by short intensive mentoring modules. We need to give those accustomed to sifting and preparing the young for their station in life, the incentive to help lead, not oppose, the transition to modular, incremental lifelong learning (and flexible, multi-career lives for all) as a key part of the road to recovery.

  • How do we use broadband to bring jobs and skills (not just shopping and entertainment) to the people?

Levelling up geographically across the UK requires that Government support for broadband be focussed on providing SMEs and home-based workers with upload facilities fit to enable creative work to be entered on-line/interactively into cloud-based systems. This will entail agreeing and using  appropriate performance measures for publicly sector build. To save time and effort developing new standards (as proposed by Ofcom) these might begin as a simple cross between those developed by Wired Score to globally accredit smart buildings and the INCA Gold standard for UK consumer networks (fixed, wireless and//or hybrid). The standards will need to evolve over time but they will evolve internationally and the need is to invest in infrastructures (ducting, poles, cabling, masts and aerials) that are capable of  supporting that evolution.

  • How do we give UK residents long term equality of access with applicants from overseas?

One of the resentments that helped drive the unexpected Brexit referendum result was that applicants from overseas were perceived to be getting preference over locals, who were all too often not even aware the jobs (advertised via OJEU and equivalent) were on offer, let alone given the opportunity to acquire the skills necessary. Meanwhile the local also had to “prove” their right to work  with physical documentation while thsoe applying from overseas could use a Home Office on-line system.

The suspension during lockdown of physical “right to work” checks has enabled 400,000 home-based workers with good broadband  to get on-line jobs with employers anywhere in the UK. A quoted example was those benefiting from publicly-funded fibre in Cornwall who now work for employers in Newcastle. Their re-imposition, together with changes to IR35 to try to route independent contractors through PAYE, threatens to put UK citizens at a serious disadvantage against those telecommuting from India, the Philippines or tax havens around the world. Worse, the changes to IR35 increase the cost to UK employers of employing local residents while reducing, not increasing, net tax revenues.

  • How do we ensure that skills programmes provide the skills in demand?

Computer Science graduates have both highest salaries and high unemployment rates. There is a serious problem with second-rate courses and research. Data Science, AI and Cybersecurity and algorithmic systems require more and better mathematicians not those trained in the methods of yesteryear. We need more granular approaches to assessing demand, quality controlling delivery and enabling students and employers to make better informed choices. There is a similar need to to focus more research on the needs of industry and less on academic publishing league tables.

  • How do we refresh skills which atrophied during lockdown?

Skills commonly atrophy when not used but they do not necessarily have to be relearned from scratch. They will, however, have to be refreshed, even if they have not become out of date. This applies to skills not practiced since before lockdown. A few hours of drill and practice may be sufficient for many. Others require more, including re-motivation for those who have become stale.

  • How do we build on the changes that happened during lockdown?

Before lockdown the UK systems for planning and accrediting education and training were already unable to cope with pace of change. Lockdown saw ten years of change in ten weeks. A majority of voters (parents, teachers and students) have now discovered for themselves the potential and limitations of working and learning at home.

About half the workforce have been able to work from home – although we now know its limitations as well the benefits. About a third is on universal credit and/or about to come out of furlough. Many of the remainder also face an uncertain future. Three quarters of those currently looking for work used lockdown to try to acquire new skills. Half are willing to retrain outside working hours to acquire those needed by their employer. Policymakers must take the needs of all groups at least as seriously as those actively lobbying.

Getting people off benefits and into paid employment has the double benefit of cutting spend and increasing tax revenue. The business cases for both should be joined up when looking at skills and support programmes.

The strategy should be to use what already exists to target already known needs

There is a wealth of digital skills material but “free” is not sustainable. We need to unpack demand, by level, application, sector and location, using labour market intelligence and definitions that link skills to jobs, to plan investment in delivering relevant (quality and content) courses and materials, when and where needed by local employers.

With joined up programmes and guidance

There are too many education, training and support programmes for the choice to be intelligible to the target audiences:  employers, jobseekers, parents, students, careers advisors, schools, colleges and training providers. They need to linked and interfaced to help ease the path into employment for all ages, including returners, those with family responsibilities and the long term unemployed and those in families where all generations are dependent on welfare for a world where full time jobs with a single employer has ceased to be the norm.

The Green Agenda has many evolving skills needs, from construction skills for installing solar panels and safe (as opposed to Grenfell style) insulation, building the vehicle charging infrastructure and large scale pumped storage (using quarries and lagoons), through to hydrogen and carbon sequestration and battery production (including re-opening domestic mines to avoid dependence on slave labour in third world countries for rare minerals).

There were a dozen recommendations

  • Package and promote current and proposed education, training and support programmes in ways that make sense to the target audiences. Cull those which compete, conflict or cannot be understood by applicants, employers or providers.
  • Those running publicly funded skills programmes should have up-front costs covered but profit should depend on students gaining paid employment, not qualifications or places on follow up courses (unless the latter are co-sponsored by employers). To avoid abuse the “bonus” should be paid only after the student has been in paid employment for at least three months.
  • Reward universities and rank staff for meeting the research and education needs of local employers, rather than publication targets set by funding agencies. The relationship between the University of Lincoln and Seimens is one example. Loughborough and Brunel also mentioned.
  • Extend and simplify the apprenticeship levy to cover all forms of employer recognised and accredited training and skills development programmes, using evolving skills definitions based on real jobs and market intelligence.
  • Encourage and publicise processes that provide seamless on-line access to education, training and careers materials and advice from schools, college and Universities across the Joint Academic Network, the Grids for Learning and other secure, resilient networks.
  • Use JANET, the Grids, broadband vouchers and the £5 billion outside-in broadband programme to enable full fibre networks to link community life-long learning hubs in every science and business park, commercial centre, school, library, community centre and village hall. These should be linked local universities and colleges of further education with programmes for students to help develop IT skills in their own families/communities – perhaps supported by livery and other charitable organisations to provide basic home technology and learning scripts that the “home teachers” can use.
  • Use furlough/training voucher programmes, focused on specific skills and industries within local strategies, to help drive quality and repurposing, using employer-recognised providers, to develop the skills of future, not just those in immediate demand.
  • Use UK Social Value legislation to embed local recruitment and training into all public procurements, with provisions and conditions that reward bidders who encourage robust supply chains, job creation, reskilling and lifelong learning and do good business locally. The job creation targets should, however, be specified, as recommended in the original JRF report on the Intermediate Labour Market which recommended they be run by local employers seeking to employ the participants to meet known skills needs (akin to German practice), as opposed to achieving social or academic objectives (latest watered down UK guidance).
  • Digital and Green (including pumped/tidal energy) Infrastructure skills centres (attached to FE/Agricultural colleges and run in co-operation with commercial training providers and the employers who use them) using a mix of equipment simulators and brownfield/redevelopment locations to provide hands-on training in current construction techniques and equipment plus the accreditation of competence, including reinstatement, above and below ground.
  • Turn IR35 from a bottleneck on the path to recovery into an opportunity for reforming tax and employment practice by supporting and promoting an independent code of good practice.

The responsibility lies on employers to identify whether a contractor is inside IR35 (have to go on payroll) or Outside IR35 (can invoice from their own PSC). It is easier for employers to avoid case by case assessment and require those in their supply chain to treat all contractors as employees,  to avoid using contractors at all or to move their digital operations offshore. Since lockdown situation has been further complicated by the rise in previously UK-based staff and contractors “working from home” in overseas with good broadband such as Dubai, Malta,  Portugal or parts of France and Italy,  We also have the revelations of UK umbrella shell companies with Philippino Director in the Test and Trace supply chains of SERCO and G4S.

Several participants have been involved with exercises to create legitimate UK-based umbrellas for UK-based contractors with scarce skills (e.g. high level AI, Data Science, On-line Security and Performance Audit) needed by large organisations for short periods. Contractors were interested until recruiters told them they had  to join an umbrella company on their Preferred Supplier List (PSL) and/or end-clients said they had to choose an umbrella company that was a member of the FCSA. There are claims that large recruiters and charge umbrella companies £10 – £20k p.a. to be on their preferred supplier list while evidence of poor conduct on the part of FCSA members includes  BBC cover of an e-mail exchange between a  recruitment company and an FCSA member on how to split unclaimed holiday pay between them.

The result has been a further market implosion. Half a dozen umbrella companies dominate the market and there are growing abuses with off-shore shell companies in the supply chains of major outsource suppliers. The resultant bottleneck, including with UK-contractors choosing to work off-shore, is causing serious problems (staff shortages and delays) with major projects on the critical path out of lockdown (including DWP, HMRC, NHS and Financial Services.

There is a conflict of interest when the FCSA is seen as a provider of accreditation and standards but its board of directors are all drawn from large umbrella companies. The sector needs an accreditation body to drive standards, but this must be independent the umbrella companies. This article covers a possible way forward.

  • Turn Home Office plans to revert to paper-based, employment checks after 1st September from a problem to a catalyst for change, including to help prevent fraud from derailing recovery plans.

Home office should extend the temporary use of online right to work checks while consulting on permanent solutions for implementation as part of the Fraud Action Plan due to accompany the next Spending Review and prevent the scale and nature of on-line fraud from derailing recovery.

Before the Covid lockdown Home Office Right to work checks made it easier to recruit job applicants from outside the UK Immigration (who could give their employer a code to access an on-line Home Office system) than UK citizens or residents who had to present their passport, birth certificate or an “official” document (or one from a previous employer) showing their national insurance number, whether or not they were needed to attend for physical interview. The process did little or nothing to reduce the risk of illegal employment but did enable officials and employers to say they had complied with relevant legislation.

Over the past year employers have been able to inspect documentation via a video call and accept photographs and scans sent by e-mail. The evidence is that this has led to a drop in fraud as well as  increases in efficiency. There has been a drop in the number of passports and other documents lost or intercepted in the post and recruiters have been able to use on-line services to check identities and other claims during video calls.

On September 1st this option will cease Coronavirus (COVID-19): right to work checks – GOV.UK (www.gov.uk) . The consequences for economic recovery and the control of employment related fraud are very serious. Over the past year recruitment, including interviewing, has moved on-line. Many staff now work remotely, hundreds of miles from the remaining physical office, if any, of their potential employer. Fraud, sometimes using Government employment services to harvest employee credentials sent in the post, is a serious problem for job seekers.

Major organisations, including banks, consultancies and global names, addressed the problem by using secure on-line credential checking to recruit over 500,000 new staff. Few have plans to re-open the local administrative offices necessary for routine physical interviewing or document checking until the Autumn, if then.

The reversion to paper-based checks will:

  • Re-open opportunities for large scale paper-based employment (and other) fraud because few staff or employers are able to physically check overseas identity documents and most paper-based documentation is easy and/or cheap to impersonate [link to source]
  • Reopen discrimination between overseas applications and UK residents who can afford to risk passports/ documents in the post and those who cannot
  • Delay and disrupt and, according to one estimate, nearly double the cost, of UK (as opposed to overseas) recruitment, from hospitality workers to university graduates, let alone those struggling back to work from furlough or in employment black spots.
  • Create honeypots of “at risk” copies of passports, driving licenses and other credentials in transit or in storage in offices that are no longer permanently staffed.

On May 4th the Minutes of a meeting of the Economic Crime Strategic Board in February were published. The meeting was chaired by the Home Secretary and the Economic Secretary to the Treasury presented Economic Crime Plan: Statement of Progress.

This indicates that Counter Fraud has become one of the main driving forces behind the evolving Cyber Security Agenda. Treasury can no longer afford the cost to the public sector – somewhere over £29 billion p.a. In consequence 16,000 staff across 33 departments have been brought together, 9,000 of them in a new professional group, And 80% of fraud is cyber-enabled. Hence the changing priorities given to NCSC over the past year as part of the Economic Crime Plan.

The intention is to bring the Cyber, Digital and ISP communities to be alongside the Financial Services Community in the fight against fraud … and subjected to similar requirements to reduce the risk of their systems being used for criminal purposes. Developments since then have included:

  • User-generated fraud is to be included in the scope of the regulatory framework for the Online Safety Bill and DCMS has called for inputs to a review of the Computer Misuse Act.
  • The planned review of RIPA has been complicated by revelations about the Post Office use of its investigatory powers leading to the largest claims for damages in UK history.
  • The announcements on international co-operation (including vis a vis tax) made by the G7
  • An ITT for a new system to support Action Fraud
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