When electric vehicle company Sevcon announced a $50m deal this week, it should have been unalloyed good news for the North East.
The Gateshead-based firm is very much the sort of company the region needs, operating in a highly skilled area that brings good, well-paying jobs and has knock-on benefits for the companies in its supply chain.
But the contract announcement was accompanied by a rather large fly in the ointment when Sevcon chief executive Matt Boyle told The Journal he would have to hunt outside the North East to find the skills necessary to grow his company.
Mr Boyle, who has spent some years banging the drum for up-skilling in the North East, reaffirmed his comments following news of the firm’s win, suggesting that while long-term strategy was in place to tackle industry’s needs, a short-term gap presented immediate problems.
Mr Boyle said: “We have the skills in Gateshead to fulfil current contracts, but it’s an issue of bandwidth. We manage this business to the resources we can employ. We’ve continually raised money and invested in kit, but there’s another piece to the jigsaw.
“To create a fundamental change in this business, and grow significantly, we need to recruit people who simply don’t exist in the North East at the moment.”
He added: “I have a lot of very good opportunities on the table, ready to go, but I need more quality engineers, and I need them now.”
Mr Boyle’s concerns have been echoed by Liz Mayes, North East regional director of EEF, the manufacturers’ organisation.
She said: “The skills gap in engineering is the single biggest issue facing North East manufacturing companies at the moment.
“Businesses are investing heavily in apprenticeships and working closely with universities to support their future skills pipeline but that is a long-term solution to a very real and current challenge.
“Manufacturers are taking this very seriously and looking at how they can up-skill their current workforce to meet their skills needs but there’s no quick fix. In reality many companies have to look beyond the region to fill current vacancies.”
In 2012 Sevcon launched a scheme to fund students through degree courses at Newcastle and Northumbria Universities, in a bid to help young people into engineering careers with the company.
But in October Mr Boyle said that, despite its success in training a number of future employees, not one applicant for the scheme had come from the North East.
Now, after this latest contract win, Mr Boyle has reinforced his view that a shortage of skilled engineers from the region today is forcing him to recruit outside of the region.
He said: “All the pundits, not least the politicians, talk a good talk, but when it comes down to it I see very little action on the ground.
“There’s three lines of response I can take to this problem. The short-term strategy is for me to scour English-speaking countries for recruits. In the first instance, the language barrier isn’t a problem. The medium-term strategy is to engage with universities, which we do. The long-term strategy, which takes a long time to pay off, is getting into schools to show young people the value of what we do.
“We’re not just looking to find people for ourselves. We’re trying to make sure young people are enthusiastic about engineering as career in general.”
Prof Barrie Mecrow, head of the School of Electrical and Electronic Engineering at Newcastle University, said the problem was a national concern.
He said: “Newcastle University is a world leader in the field of power electronics and one of only a handful of universities in the UK to have specialist research and teaching in this area.
“We have a long-standing and valuable relationship with Sevcon. In fact five of the company’s senior engineers – including their vice-president of engineering – are Newcastle University graduates and we also have a number of ongoing research projects with the company.
“Nationally there is a shortage of young people choosing engineering and we are working with Sevcon and other partners to help change that.”
Mr Boyle’s sentiments were echoed by neighbouring North East manufacturers Chirton Engineering Ltd. At a recent manufacturing event hosted by accountancy practice Tait Walker, the firm’s managing director, Paul Stewart, said: “The skills shortage is a big issue for us, so work-based learning has formed a large part of our business agenda.
“We have an advanced machine academy set to launch in 2015. However, one of the biggest barriers to getting this off the ground is access to funding and investment from the Government. Without this essential support from Whitehall, our dream to have a ‘conveyer belt of talent’ feeding into the North East’s manufacturing industry hangs in the balance.”
Mr Boyle contrasted the UK’s skills strategies with those in the US and Asia. He pointed to a current scarcity of engineers skilled enough to manage the US power network, and suggested the country had “woken up” to the problem, with university courses being revived after their cancellations some 20 years ago.
Zero Carbon Futures, the not-for-profit organisation which aims to develop new technologies around low-carbon vehicles, has its headquartered at Washington’s Skills Academy for Sustainable Manufacturing and Innovation.
Operating in the same space as Sevcon, the organisation’s managing director Dr Colin Herron has also been outspoken about the skills deficit.
He said: “This is not just a North East problem. The whole of the UK is suffering from an engineering skills shortage which goes back decades and stems from a general misconception that UK manufacturing was in decline.
“Nowadays there are some fantastically well-paid jobs in engineering, both in the UK and in this region, and we need to inspire and promote these opportunities to the next generation and make sure that we increase the UK’s engineering skills base.
“A lot has been done over recent years to encourage students into engineering. However, it will take time for the pipeline of suitably qualified engineers to come through.”