TfL’s Supplier Skills Programme – More Jobs and Skills in Engineering & Construction

We very much enjoyed the conference presentation that we reported on here from Tim Rudin of TfL (Transport for London), all about social responsibility in procurement.  So after that, we spoke with him directly to take a more in-depth look at one of the key TfL areas of interest in this area. That is around the “supplier skills programme”, in which TfL is working with the supply side to encourage more people (and a greater range of people) into the construction and engineering industries.

The UK has a serious shortage of engineers and skilled construction workers, and in both areas, the workforce is ageing, largely male and not very ethnically diverse. With the major programme of capital investment that TfL is driving, including Crossrail for instance, a shortage of skilled labour is a very real threat to successful performance over coming years. Creating job opportunities and employment in more deprived areas of London, and amongst groups less represented currently in those industries, is another key goal.

“We need to encourage younger people and those from diverse backgrounds into these industries, and we’re working with other bodies such as the Department for Transport to address the skills gaps. Bright young engineers are often tempted by the rewards available in City jobs, or by overseas jobs in exciting and glamorous places, so we have to compete”, Rudin explains.

So TfL’s major suppliers in the relevant areas are contractually required to provide skills and employment “outcomes”.  For every £3 million contract value, one Strategic Labour Needs and Training (SLNT) outcome is expected. That can be a new job, an apprenticeship, a placement for a young person, or similar. But aren’t some of those easier than others, we wondered? No, says Rudin, “a programme of school engagement, for instance, still has its challenges and also adds real value”.

The Supplier Skills team in TfL help the operational procurement staff implement the programme and provide hands on support for suppliers too. Rudin believes that direct assistance has been a critical success factor.

“That’s been really important in making this work. Suppliers are less mystified now but needed a lot of help early on – for example, in defining appropriate roles and training for apprenticeships. We’ve offered help to suppliers in recruitment too, almost acting as a skills broker, using a network of charities and other groups, such as those that support getting the economically inactive into work”.

We asked how the programme has been received by suppliers. To begin with, Rudin says it was perceived by many as a “necessary evil”. But now, views are much more positive. “They see the CSR benefit and the wider goals, but also the self-interest. Skills shortages are real, and wage inflation in the transport infrastructure market is running at something around 7%”.

TfL is under financial pressure as well of course so has had to ensure this programme did not result in cost increases being passed on. “Suppliers do need to take staff on anyway. We’re just perhaps suggesting a direction for doing that, and doing it well. So some firms might have been putting staff through an HNC, but now are focusing more on apprenticeships”.

Finally, there are two outcomes here of interest to procurement more generally and beyond TfL, we suggest.

“Working on initiatives like this needs a different approach to contract and supplier management compared with the traditional style, more collaborative and less adversarial. That should be a positive more generally, I believe”, explains Rudin.

And suppliers are now collaborating themselves in some areas – “they have created an apprenticeship consortium to look at a collective approach to programmes for apprentices”.

Whilst we wouldn’t want to see too much supplier friendliness (being big believers in vigorous competition), that seems like a very positive step. Indeed, the whole programme looks like a good example of a procurement-related initiative that is both commercially sensible and supports very worthwhile wider societal goals.

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