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ACE conference: from the Northern Powerhouse to Brexit

Colin Smith addressing the ACE Annual Conference.

Association for Consultancy and Engineering (ACE) chief executive Nelson Ogunshakin welcomed delegates to the tenth ACE national conference today which was taking place in Westminster at an opportune time, on the eve of the chancellor’s latest Budget and in the midst of the EU referendum campaign. The event addressed many of the key issues faced by consultancy and engineering firms in a changing marketplace against a backdrop of business and political uncertainty. 

Opening the proceedings, Colin Smith, infrastructure partner at PwC addressed the challenges of investing in UK infrastructure highlighting what investors were looking for. “The quality of UK infrastructure now is better than it has ever been,” said Smith. “Investors want to get into UK infrastructure because of the stable regulatory framework,” he said but there were challenges in delivering projects.

"Investors want to get into UK infrastructure because of the stable regulatory framework but there are challenges in delivering projects."
- Colin Smith, Partner, PwC

Smith said investors wanted to see government support, cost certainty, social benefits, projects paid for by the end user and the opportunity to make a fair return with an early yield. “Projects also need to be simple and not too complex. Simplicity and how projects are run is particularly important,” he said.

The conference’s first client panel session saw HS2’s Beth West, Andrew McNaughton , director of construction at Tidal Lagoon Power and Ian Piper from the Homes and Communities Agency discussing how to drive productivity in an age of austerity.

“We face a skills challenge due to the significant investment we are seeing in infrastructure,” said West. “But these challenges are opportunities for the industry,” she said and urged the sector to look at the diverse areas of work and the difference they make in order to promote the industry better.

Lady Barbara Judge, director general of the Institute of Directors, spoke next and made a passionate case for the need for more women in the engineering sector.

She said that she was proud to be speaking as the first woman to chair the ACE’s advisory group. “Women are clearly underrepresented in parliament, in the boardroom and in engineering,” she said. “We need to get women into this important profession because if we don’t we are going to run into a lot of trouble. 

“We have a skills shortage. The age profile in engineering is high – an average of 54 years of age in the industry. Only 6% of UK students are applying to study engineering and technology. We need to fill that gap. We will not be able to replace engineers fast enough unless we attract women,” said Judge.

"We will not be able to replace engineers fast enough in our industry unless we attract more women."
- Lady Barbara Judge, Director General, IOD

Judge said that women were 35% more likely to go to university than men, yet in engineering, women are outnumbered five to one. "Women are just 7% of the professional engineering sector – but it’s 15% in Europe. In UK we have the lowest number of women in the engineering profession,” she said. “Government and the industry have a role to play in attracting more young people into the profession and it's good that government is making more effort in this area but we have to hold their feet to the fire. The £3bn being earmarked by the Treasury for apprenticeships must be spent wisely," Judge said.

It wasn't just in relation to women where the industry needed to do more said Judge. “We also need to look at how we get more young people into the industry. We need more diverse people too. We all have a responsibility to encourage more people into engineering. We need to make engineering the profession of choice. How do we get people out of university into engineering? Starting salary is an issue and we need to address this," said Judge.

Fundamentally, said Judge, there was a need to raise the profile and standing of engineers in society in the UK. The industry has been discussion the issue of profile and reputation for years yet no one gets how important the issue is, she said. “Raising the prestige of the profession and the pay of the profession is crucial. If they can do it in Europe – and they have – then we can certainly do it here,” she claimed.

The conference also discussed the Northern Powerhouse, topically given the National Infrastructure Commission’s (NIC) just-published report High Speed North. A panel, including IPPR director Ed Cox, Marc Davies, head of environment at WYG and Merseytravel chief executive Frank Rogers, discussed the importance of the north in rebalancing the UK economy.

There was some debate over how much of the Northern Powerhouse agenda was a political one and how much of it was real with concrete investment plans that would come to fruition. Ed Cox was keen to stress that the debate needed to move beyond investment, important though that was, and onto addressing the wider needs of the northern economy such as skills and education. 

Notwithstanding that, the NIC report on the north grabbing the headlines today focused on transport and the urgent need for investment now to improve connectivity across the region. 

Commenting on the report, Marc Davies, chair of the ACE Northern Region, said: "The focus on the Leeds-Manchester corridor is right but it's not the only piece in the jigsaw. It's also important to look at connectivity between Liverpool, Hull and especially Cumbria with its strategic importance for energy.

"The Energy Coast is often forgotten in all the discussions around the Northern Powerhouse but it's a big employer and the workforce has transferable skills in what is a centre of excellence for the nuclear sector. Of course there are geographical challenges in connecting up Cumbria with the rest of the region but in all the focus on east-west links we should not forget the vital role of connecting the north and south of our region," Davies said.

"Tens of billions of pounds will be needed to improve transport infrastructure in the north and we will need the chancellor's backing for that." - Marc Davies, Chair ACE North

"It's good to see the report stressing the need for pace and urgent investment but we also need government backing from the top. Tens of billions of pounds will be needed to improve transport infrastructure in the north and we need the chancellor's backing for that," said Davies.

Continuing the devolution theme, Scottish National Party deputy leader Stewart Hosie MSP gave the view from north of the border and spoke about the benefits of taking decisions locally. “Make sure that you have all the powers you need to do the job. Be as bold as you can to both help society and also boost business. A half-baked approach benefits no one,” he said.

David Hancock, head of construction at the Cabinet Office, spoke about the role government can play as a client in delivering projects more efficiently. “We will use our position as a major client to help address some of the industry’s key challenges,” he said, citing the 100,000 key workers that the industry needs to meet the nation’s infrastructure needs and the further 250,000 people that the industry requires to upskill and train. 

The conference concluded with a debate on the EU referendum with speakers from the Leave and Remain campaigns and also lawyer Michael Archer from Beale & Co steering a more neutral course.

Archer kicked off the debate by outlining what was at stake in the referendum and posed the question “What parts of EU law is it that we don’t like that are stifling business and is there a consensus on these areas of legislation and regulation about whether they are retained or scraped?”

In terms of construction, Archer also said there were huge benefits from being part of the EU, especially in the area of procurement.

For the Leave campaign, London Assembly candidate and former deputy chairman of UKIP, Suzanne Evans, said that campaigners for a Brexit were the real forward thinkers in a debate about “an outdated institution” that had outlived its usefulness. “EU legislation hits smaller businesses disproportionately hard,” claimed Evans who said that any potential procurement plus points from EU legislation were negated by the high costs of bidding for work.

Evans claimed that Brexit would stimulate a more energetic climate for business and a renewed vigour from government to address issues like skills shortages. “We must stop clinging to the coat tails of a 20th century idea when we are a 21st century nation,” said Evans.

Arguing for the UK to remain in the EU, Alok Sharma, MP for Reading West said that he was a “euro Pragmat” who wanted to see Britain flourish in a reformed EU. Listing the concessions that his government had already wrung from the EU, Sharma said that the UK was far better off being part of the EU, especially economically.

“One of the main reasons that companies invest in the UK is because it is a gateway to Europe. If we are outside of the EU there will be uncertainty about the future,” Sharma claimed. “What kind of country do we want to be in? Do we want to sit on the sidelines or do we want to make a real difference?” he asked.

"What kind of country do we want to be in? Do we want to sit on the sidelines or do we want to make a real difference?"
- Alok Sharma, Reading West MP

In a wide ranging debate from the floor, opinions were voiced from both sides of the debate which gave Sharma and Evans further opportunity to highlight their views on what Brexit would mean for the country and business in particular. While it’s fair to say that there wasn’t overwhelming enthusiasm for the EU project, there was a grudging acceptance that business interests would be better served by the UK remaining in the fold.

If you would like to contact Andy Walker about this, or any other story, please email awalker@infrastructure-intelligence.com.