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Driving the future of transport – addressing the skills gap

This new report sets out five recommendations for how government and industry can ensure that the transport sector has the digital and technical skills it needs to thrive.

Transforming transport through tech requires an urgent need to address the skills gap

Transport is undergoing rapid digitisation. This is being driven by the consumer need for data-enriched services to make informed decisions, the urgent to decarbonise and the push to remain competitive as digital transformation sweeps our economy at a staggering pace.

The findings of techUK’s recent Digital Economy Monitor survey show that UK businesses are not able to recruit the digital skills they need, with 57% of members see accessing talent and skilled workers as a main concern for 2023. 

The transport sector also faces a significant skills challenge, and the opportunities will not be realised unless we have enough engineers, data scientists, developers, and technologists to make this change.

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In response to this, techUK has developed five recommendations for government that will drive measurable impact:

1. Department for Transport should publish a policy roadmap for addressing issues identified within its transport labour market and skills consultation 

We recommend the Department for Transport publishes a policy roadmap, supported by actions for government, following the feedback it received from the “Transport labour market and skills” consultation which concluded in May 2022. This should set out clear next steps for how it will seek to address the STEM skills shortage within the transport industry.

2. Reform the Apprenticeship Levy to transform its impact 

We recommend that the Treasury should increase the rate of transferable funds of the Apprenticeship Levy from 25% to 80% to allow high quality training to cascade down through supply chains. Additionally, the lifetime of the funds should be increased from two to five years to increase. By combating overall issues with the apprenticeship levy, businesses would ultimately find it easier to use their funds within two years but at this moment, a short to medium-term solution is required.

3. The creation of a Digital Skills & Productivity Tax Credit to drive business investment in training and productivity-enhancing technology

We recommend the Treasury creates a Digital Skills & Productivity Tax Credit to be designed in a similar way to the R&D Tax Credit which has been shown to bring important social and economic benefits beyond the businesses that claim it. This tax relief can also help SMEs reduce lost earnings for those periods in which the company is adapting to the new technology, as well as offset other costs such as the training itself. Providing additional incentives and support for SMEs to meet their desire for tech adoption has a huge payoff.

4. Government needs to lead on the creation of a new digital skills for transport taskforce 

We recommend the Department for Transport and Department for Education come together to established a cross-modal digital skills taskforce for transport. This advisory body would be tasked in drawing on best practice, insights, and recommendations from across transport’s fragmented landscape to develop actionable guidance for employers. Representatives from major trade bodies, industry, government, public sector agencies and local government would be empowered to develop transport-specific resources for addressing the digital skills challenge and get ahead of issues. 

5. Government should work with industry to create a Transport Digital Champion Advisory Council

We recommend the Department for Transport partners with the industry to establish an advisory board of diverse and inspiring leaders who can act as visible champions for the sector. Individuals appointed to this taskforce will act as a sounding board to the Department for Transport for how it can address recruitment issues. They will also be expected to leverage their appointment, becoming public champions for the careers in transport innovation.

This work comes in recognition that the opportunities to develop and integrate technology to decarbonise transport, deliver better services and pioneer new mobility, will not be realised unless we ensure people choose a career in the transport sector.

Liz James, Senior Security Consultant – NCC Group & Vice Chair of the techUK Intelligent Mobility and Transport Steering Board said:

“As the transport sector innovates in order to solve complex challenges around efficiency, safety, reliability, it must also foresee the challenges in skills that are emerging concurrently. The specific nature of these challenges isn't possible to precisely predict, however, it is easy to recognise the importance that both an appropriately skilled workforce will have in addressing them and in educating the public on how to make best use of these solutions as they emerge. The recommendations made in this report are aimed at addressing these challenges holistically, spanning from early years education through to retraining and cross-skilling mid-career. They recognise the recognise the urgent need to not just acknowledge the challenge but take action.”

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