Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/867611
UTILITY WEEK | 1ST - 7TH SEPTEMBER 2017 | 7 Interview R egulated utilities are limbering up before starting guns are officially fired for their next price reviews – and so is Nick Ellins, chief executive of Energy & Utility Skills. A man on a mission, Ellins is determined that this time around, the price reviews for water and energy net- work companies will give due weight to the issue keep- ing him awake at night: the disconnect between plans to transform utilities infrastructure in the UK and the avail- ability of skilled people to deliver the revolution. All too aware that skills and workforce issues can be quickly dismissed as "fluffy" by business leaders focused on securing spending allowances and protecting share- holder interests, Ellins methodically builds his case for putting them at the core of the regulator's frameworks for PR19 (water) and RIIO2 (energy). "People are frankly bored of hearing about the skills 'cliff edge' facing the sector," he says. "But when you look at the ambitions of the National Infrastructure Plan and government's proposed industrial strategy, and the UK productivity agenda in the shadow of Brexit and how important utilities companies are to delivering all of that, and then you look at our workforce renewal and talent gaps, you have to accept pretty quickly that this is a cold, hard risk – for businesses and for government." The way Ellins sees it, the best way to ensure this risk is tackled strategically, and with appropriate rigour, is by embedding it at the heart of the price review frameworks which drive the behaviours and interests of regulated utilities. And conveniently, he sees a helpful "hook" in the growing emphasis that both Ofwat and Ofgem are plac- ing on resilience and sustainability. "You can't have a resilient or a sustainable utilities sector without a skilled workforce," he states. "You can talk about infrastructure resilience and cyber resilience, but unless you have the volume and quality of labour needed to deliver and sus- tain that resilience, it's all a bit arbitrary." Focusing on PR19, a "live issue" since the publication of Ofwat's dra framework, Ellins is optimistic. Already, references to skills are peppered throughout the dra framework. High up in the report, right aer Ofwat sets out the four overriding themes of resilience, customers, affordability, and innovation (which will shape its price review), a "key message" is set out stat- ing: "We believe that these proposals in PR19, together with our other tools, will drive resilience in the round. This means having the right skills, the right leader- ship, and the right systems; as well as having a robust infrastructure." Ellins is excited by this prominent acknowledgement of workforce challenges – and hopeful that it will become even more assertive as Ofwat finalises its approach. In the final methodology, he is keen to see the defini- tion of resilience in the round include a direct require- ment for a "resilient, skilled and sustainable workforce". For water companies, Ellins believes the effects of such wording in the regulatory documentation for PR19 would be profound – more specifically, it would trans- form the role of HR leaders in the planning process for