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8 | 4TH - 10TH DECEMBER 2015 | UTILITY WEEK Interview ticular skills and management needs of regu- lated utilities and is acutely aware that, with the introduction of totex and outcome-based incen- tives for customer focus across both the water and energy networks sectors, new pressures will rise around the availability of "so" skills. In particular, as competition increases in the net- works sector and the non-domestic water market opens up, service skills will become highly sought aer "because there's a big difference between billing some- one and encouraging them to switch to your company. It's a totally different skill. To do that credibly, and with trust, first time every time takes an awful lot of training." Ellins knows that the demand for such talent is well documented and commonly recognised by employers – he's not trying to teach anyone to suck eggs. Instead he's keen to act as a partner for industry to ensure its collec- tive appreciation of skills gaps and changing skills needs becomes greater than the sum of its parts. He also wants industry skills issues to be clearly and consistently rep- resented to external audiences in government and the regulators, who have skills problems of their own to con- sider – "and which we can help them with", Ellins adds. Crucially, Ellins says there should be a united front across companies, regulators and suppliers on issues relating to sector attractiveness, which remains a critical factor in the sector's recruitment problems. Addressing this problem requires more than a conventional charm offensive or advertising campaign, he says. Players in the sector must recognise that for most young people, iden- tifying jobs and vacancies isn't enough to inspire them to join the sector. "You've got to start with the things they connect with," Ellins asserts. "You've got to say, if you want to work for us, you're into the environment, you're into society and helping people – doing something really tangible for other people's lives. That can get lost if you just talk about what jobs like pipe laying involve." Many utilities veterans reading this will no doubt feel that these motivators have long been part of the public sector ethos of the sector. Ellins agrees but returns to his point about the changing skills sets and business requirements associated with increasing focus on cus- tomer service. The sector has to move from an approach that has seen it applying services "to" people towards an approach that delivers services "for" people, he says. Attracting people who have the emotional intelligence to understand this difference, as well as the technical aptitude for STEM-based roles will mean focusing on quality not quantity, says Ellins – which in spite of the ominous skills deficit mentioned earlier, is what employ- ers want. In typical glass-half-full manner, Ellins hopes that a future without government input into the EEIP will make it easier for the partnership to fix its attention on this employer priority because there will be less pressure to contribute to the government's pledge to deliver three million apprenticeship starts (across all sectors) by 2020. Again, Ellins emphasises that he is hopeful of gain- ing ongoing financial commitment to the EEIP from com- pany leaders beyond March next year when government involvement falls away. But the change in the partner- ship's funding arrangements is not the only development in the skills landscape that the EEIP and its supporters will have to absorb in the coming months. In the summer Budget, chancellor Osborne announced plans for an apprenticeships levy for large employers to help fund apprenticeships. Osborne said the levy, which will be implemented in 2017/18 "will support all post-16 apprenticeships in England. It will provide funding that each employer can use to meet their individual needs. The funding will be directly controlled by employers via the digital apprenticeships voucher, and firms that are committed to training will be able to get back more than they put in." More detail on how this will work in practice was issued with the results of the comprehensive spending review and brought the news that all employers in England Scotland and Wales with employee pay costs of more than £3 million will be subject to an additional 0.5 per cent levy on payroll, which will be automatically deducted via PAYE. For those with strong convictions about the need to invest in future talent, the intent behind the levy is posi- tive. However, Ellins is aware that there's concern that the levy may be a burden to employers and have "unin- tended consequences" – including downward pressure on existing training budgets, and on profit margins for suppliers which inevitably be "passed on" in their businesses. This concern reflects those expressed more broadly, that the apprenticeship levy will impact wages. Ellins voiced his disquiet about the levy to Utility Week before the spending review announcements con- firmed government's intentions for the levy. He sets out his response to that announcement on page 21, but the sentiment expressed at this earlier stage also still stands. "Potentially it's a really positive game changer because of what it's trying to do," says Ellins. "But it's about how you apply it and let companies get on with the day job, continue their training and go for apprenticeships – we also need to remember that apprenticeships are only a part of the picture, an important part, but just a part." Ellins is worried that despite its good intentions, the levy could end up detracting from current train- ing budgets and make the job of EU Skills and the EEIP more bureaucratic. "The problem [with using PAYE] is that as soon as you start taking that money and put- ting it through a system outside the companies them- selves you've got another level of red tape. You now need another business to run it, you need companies to assure it, you need a national audit office – and there you go." During a consultation period to define the shape of the levy, EU Skills recommended removing the PAYE ele- ment. "Our perfect solution is to leave it within the business and to find a mechanism for incentivising com- panies to use that money for training," says Ellins. Finally, amid all this policy turmoil, the EEIP's widely respected chairman, Steve Holliday, is due to step down as he also exits his role as chief executive of National Grid next summer. Ellins confirms that he's spoken with Holliday briefly about succession plans but that no announcements are imminent. "There are questions over how most effectively to chair it [the EEIP]," Ellins explains. Given the uncertainty around the future of the partnership's funding "there's really a question over what are you chairing. If it was a government-facing partnership then obviously we'd want someone with expertise in that. If it's all about reg- ulated utilities, that's another matter; and if it's actually more biased towards supply chain and the relationship with utilities, that's different again". In short, all Ellins really has to say about the change of chair is that "Steve Holliday has done an exceptional job. He's really galvanised people and he's put his money where his mouth is too… But the pressure for now is to get round people and find out what they want to do." "There's a big difference between billing someone and encouraging them to switch to your company" OFF THE RAILS Chatting with Nick Ellins about the strange coincidence that sees him cross to EU Skills from the rail sector just as former chief executive Neil Robertson leaves to become chief executive of the National Skills Academy for Rail Engineering reveals a wider merry-go-round of executive talent between rail and utili- ties, especially water. Cathryn Ross, chief executive of Ofwat, went to the Office for Rail Regulation for just over two years; Jonson Cox, chairman of Ofwat, worked at Railtrack for 11 months; and Michael Roberts, the new chief executive of Water UK, was chief executive of the Association of Train Operating Companies. Ellins says rail and water face similar challenges in maintaining and replacing ag- ing infrastructure in ever more cost-effective ways as they become commercially sound, service-based markets.