Accounting and consulting firm, Ernst & Young (EY), has recently announced a mounting problem which is detrimentally impacting large public sector projects. In short, they have warned that certain regional skills gaps are causing projects to become unwieldy, cost more and become delayed. The public sector’s need for these skills (the demand) is outstripping the current supply.
Joe Stringer, EY partner for government and public sector, has stated: “We’ve never seen such an increase in demand for project management, commercial and financial skills across infrastructure and government at the same time. Combined with the geographic nature of infrastructure programmes, decision-makers in most regions can’t assume the skills are there and need to think creatively and embrace better ways of working to ensure that they can deliver projects in a way that provides value for money.”
Particular areas are most affected. The East of England and the South West are two notable regions highlighted, whereas in London there are plenty of project managers to fill the gaps. This is news we need to wake up and pay attention to because the Government’s National Infrastructure and Construction Pipeline has an estimated £500 billion already set up for up and coming UK wide projects in the near future to 2021. These projects are currently set to include Crossrail and Hinckley Point power plant.
The problem is that the project management skills which are needed to meet the current planned infrastructure projects simply aren’t there on the scale that they are needed. This is a significant problem for everyone, right down to the individual taxpayer, because if the skills aren’t there, they need to be brought in for a premium. Projects stand to over-run and cost more.
The finger is being pointed at Brexit. With uncertainty mounting, there is talk of the Brexit Brain Drain whereby we lose the talent we need to complete these projects (and across other areas too). This is possibly backed up with the figures we’re already seeing on net migration to the UK which has already fallen by 25% in just over a year.
The problem also goes hand in hand with the lack of investment in future skills requirements in the public sector, due to austerity cuts.
The Battle is On
The situation means that there is going to be a significant battle for the right talent in the needed places across skills and projects. EY hasn’t just reported the problem, but has also made some key recommendations:
- Sharing Resources: EY suggest that different departments and programmes should aim to share resources across themselves at different times and stages of their projects. In other words, collaboration between different groups which would not usually take place. This would help to avoid spikes in already tough competition, which will push up costs.
- Flexibility: Project organisers are being advised to be more flexible on the skill sets required for specific roles. This requires lateral thinking and a broad application of transferable skills.
- Recruitment Approaches: It may be possible to acquire talent in different ways which will help provide better value for money. Shorter, flexible, fixed-term contracts should help keep costs lower and make talent acquisition easier.
- Utilising Technology Appropriately: Technology is advancing to our advantage and leveraging it appropriately should help improve efficiency across all projects. Remote working, for example, may be a very real possibility as we face these regional deficits which would not have been possible previously. The physical location of project managers may be less imperative than before.
- Private Sector Collaboration: It will be important to take a broad approach to filling the skills gap, including looking to the private sector and broader-based professional bodies, such as the Chartered Institute of Procurement and Supply (CIPS). The public and private sectors are going to need to work more closely together, rather than viewing each other as competition. In this way, knowledge can be shared, and talent can flow more easily to where it is needed.
- Pre-Emptive Action: Lastly, EY urge that facing this project management deficit cannot be left to chance, but needs to be tackled pre-emptively. Recruitment and talent development strategies need due attention now – not when the problem becomes a reality in just a short time from now.
Is Public Sector Pay Also a Factor?
In short, yes. A talent supply shortage essentially should push salaries up, but this is against a backdrop of public sector pay restrictions. This is a problem waiting to create even more problems than the immediate discontent we’re seeing in the media. The Government have continued to refuse to change, or remove, the pay cap on public sector workers and this is not going to help the project management skills deficit. Even the recent agreement to lift the 1% caps on pay increases only applied to a few specific roles and niches. It doesn’t help here.
The Future of the Public Sector and Project Management
All in all, the EY report points to a worrying situation looming on the horizon. With the situation as it currently stands, we look set to have a significant problem on our hands, which will be widespread within the next few years.
However, by acting on the EY suggestions, and taking a more lateral approach towards project management recruitment, it may be possible to mitigate the impact. Of course, this will only bridge the gap in the short term. Longer term we need to invest in project management skills for the future within the UK market, and ensure we utilise every tool, such as technology, to our advantage. The problem isn’t going to go away, it looks set to worsen, and we need to therefore give it thought now.