Steelworkers vote to accept Tata deal – what are the next steps for the industry?

17 February 2017

Article by Gareth Thomas,  National Assembly for Wales Research Service

View this post in Welsh | Darllenwch yr erthygl yma yn Gymraeg

Picture showing Port Talbot Steelworks

Image from Flickr by Ben Salter. Licensed under Creative Commons.

On 15 February 2017, trade union members from Community, UNITE and GMB all voted to accept the deal offered by Tata Steel relating to pensions, future investment and job security.  The three trade unions had recommended that workers accept the deal, while recognising the difficult decision workers would have to make on their pensions.  Tata have said that work continues with the unions and others to build a secure future for the industry.

What is in the deal?

The UNITE trade union has set out details of the proposal that union members were balloted on, which included:

  • Closing the British Steel Pension Scheme to future accrual on 31 March 2017 and introducing a Defined Contributions Pension Scheme. Additional one-off payments to pension scheme employee members aged 50+ who retire between 60 and 64 will also be available in some circumstances.
  • Commitment to run 2 blast furnaces at Port Talbot until at least 2021, and proposed investment in Blast Furnace 5 to extend its lifespan beyond 2021.
  • Commitment to an investment plan which proposes £1 billion of investment over 10 years, conditional on Tata Steel UK making at least £200 million in earnings before tax, interest, debt and amortisation (EBITDA) per year.
  • Protection against compulsory redundancies until 2021, equivalent to the commitment given to the workforce at Tata’s IJmuiden plant in the Netherlands.

Tata will also seek to restructure its UK Profit Bonus, and introduce new rates and conditions for new employees. It also aims to make £13 million of employment cost savings across the UK.

How have the Welsh and UK Governments invested in the steel industry and steelmaking communities?

The previous Welsh Government offered Tata a package of over £60 million, with conditions attached, prior to the announcement on the sale of its UK assets in March 2016, including investment in environmental improvements and developing the galvanising line at Port Talbot. Following the vote, the Cabinet Secretary for Economy and Infrastructure said that he hopes to be able to bring forward announcements shortly on these projects.

The Welsh Government also established the Port Talbot Waterfront Enterprise Zone in response to the job losses announced in January 2016. The UK Government also agreed to fund Enhanced Capital Allowances for three sites within the Enterprise Zone, which enable businesses to claim a 100% first year allowance for the capital cost of new investment in plant and equipment.

In December 2016, the Welsh Government agreed to contribute £8 million towards a total investment of £18 million in improvements to the Port Talbot power plant and setting up a R&D base in Swansea. In February 2017, it contributed funding of £1.6 million towards environmental improvements at Celsa Steel in Cardiff, and £1.2 million for investment in three other companies in the industry.

In December 2016 the Welsh Government agreed to provide £4 million to Tata to match its investment in training staff and managers across Wales. The Welsh Government’s ReAct redundancy support scheme has assisted workers from Tata and supply-chain companies.

The UK Government has provided assistance to mitigate high electricity prices and the impact of climate change policy. Over the two compensation schemes that have been introduced, the UK Government has provided over £100 million in compensation to the steel industry.

Has this support addressed the key challenges the industry faces, and what further action is needed?

In October 2015, the steel industry identified five areas where action could be taken to address the challenges it faces in the longer term. UK Steel says that of these, one has been actioned fully, three partially and one not at all. In contrast, the UK Government considers it has addressed four of these actions.

On energy prices, while the steel industry welcomed the UK Government’s package of support, electricity prices for UK producers remain considerably higher than those for European competitors. UK Steel highlight a differential of £17 per Mega Watt Hour between UK and German producers, impacting on investment decisions between steelworks in different countries.

Action around the ‘dumping’ of steel will be a key area where the UK Government will need to make decisions after the UK leaves the EU, as it will need to establish trade defence measures. There has been concern that previous EU anti-dumping tariffs have not been high enough, and that the UK Government has not supported the lifting of the ‘lesser duty’ rule by the EU. The sector is concerned about the potential for tariffs being imposed after the UK leaves the EU.  While WTO tariffs on steel products are 2%, tariffs such as the 10% on the automotive industry are of greater concern.

On business rates, the steel industry has called for plant and machinery to be exempt from business rates bills.  UK Steel found that UK companies pay five to ten times more business rates than producers in France and Germany. The Welsh Government has not taken this forward, as they consider it complicated to operate and have preferred to support the industry in other ways.  However, the recent business rates revaluation has seen a fall in the average rateable values of steelworks in Wales.  UK Steel have noted that under the Welsh Government’s transitional relief scheme steelworks will not have business rates bills reductions capped as will happen in England.

Both governments have also taken action on procurement.  The Welsh and UK Governments have published infrastructure pipelines of which projects will require steel. Additionally, the Welsh Government has changed its transport contracts to require that ‘dumped’ steel is not used.  The UK Government has also introduced procurement measures, including requiring central government departments to consider economic and social impacts of the steel they source. Key areas of future action for the steel industry include monitoring compliance with guidance, and developing transparent reporting mechanisms.

In May 2016, Swansea University called for backing for a new proposal for a national innovation and technology centre for steel.  The IPPR have argued that foundation industries such as steel should be better integrated into the Catapult networks, which are designed to boost innovation in key sectors across the UK.

Looking forward, while the UK Government’s proposals for an industrial strategy have been seen by some as not sufficiently considering steel, the UK Government and the steel industry are discussing the potential for a ‘sector deal’ for the industry, which is supported by the Welsh Government.  Sectors will develop plans to boost productivity.  The UK Government could then assist in a number of ways, including skills and training policy, changes to regulation, helping address barriers to trade and supporting the creation of new sectoral institutions.

National Endowment for Music

08 February 2017

Article by Sian Hughes, National Assembly for Wales Research Service

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

violin_landscape

Image from Flickr by Jason Hollinger. Licensed under Creative Commons.

On 14 February 2017, Kirsty Williams, Cabinet Secretary for Education will make a statement in Plenary on the establishment of the National Endowment for Music.

Background

There have long standing concerns about funding pressures for non-statutory, local authority music education services. In March 2015, the then Minister for Education and Skills, Huw Lewis, established a Music Services Task and Finish Group. The Group, looked at  music service delivery; charging policies, musical instrument supply and partnership working.  The Group also considered issues around resourcing the future development of music education in Wales, and the potential for a National Endowment for Music.  The Group recommended that:

The Arts Council of Wales and the Welsh Government should investigate the possibility and parameters for the establishment of a National Endowment for Music to develop the opportunities for young people to realise their possibilities through music skills and talents. The research should look at the model for such an endowment and its resourcing, including the potential for a voluntary ticket levy, and Ministers should receive a report on initial feasibility within six months.

The then Minister accepted the recommendations in October 2015. Trio Consulting was commissioned by the Arts Council of Wales to undertake a feasibility study on the establishment of the endowment. The report was presented to the previous Minister for Education and Skills and Deputy Minister for Culture, Sport and Tourism in December 2015.

What can we expect?

In his written evidence to the Culture, Welsh Language and Communications Committee on 14 September 2016, [PDF 241KB] Ken Skates, Cabinet Secretary for Economy and Infrastructure said that in partnership with the Cabinet Secretary for Education and the Arts Council for Wales, the Welsh Government were considering the establishment of  a permanent endowment fund for music.

The aim is to build-up a fund of £20 million or more. In time, it could yield up to a £1 million per year to support young people to develop their skills and talents in music. Achieving this target is possible, albeit it will be very challenging, so the fund will need to attract funds from various public and private sector sources.

We are consulting a range of potential partners and beneficiaries, to ensure we have an effective plan for creating and sustaining this new body.

In March 2015, Huw Lewis and Ken Skates, then Deputy Minister for Culture, Sport and Tourism, jointly commissioned a task and finish group to look the future of the National Ensembles.  The group’s report, Securing a sustainable future for the national youth arts ensembles of Wales [PDF 825KB] (January 2016) made recommendations for the Welsh Government, Arts Council, local authorities, and National Youth Arts Wales (NYAW)  – the umbrella body for the ensembles.

One recommendation was that a remodelled National Youth Arts Wales and the Welsh Government should fully explore the potential for NYAW to become a key beneficiary of the National Endowment.

The announcement will clearly be of interest to all those involved in music in Wales and for the Culture, Welsh Language and Communications Committee who are conducting an inquiry into funding and access to music education.

Initial Teacher Education is changing: Assembly to vote on giving Education Workforce Council responsibility for accreditation.

08 February 2017

Article by Joe Champion, National Assembly for Wales Research Service

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

ite-blog-pic

Assembly Members recently voted to extend the number of professions who had to register with the Education Workforce Council (EWC) and set the fees for that registration. Having approved those regulations, Members will now vote on the Education Workforce Council (Accreditation of Initial Teacher Training) (Additional Functions) (Wales) Order 2017 (the Order), on 14 February 2017.

The Order will expand the remit of the EWC to make it responsible for accrediting initial teacher education (ITE) programmes in Wales. It will also give the EWC responsibility for monitoring the ITE programmes, with a view to withdrawing accreditation from programmes it deems to be uncompliant with its accreditation criteria. This, alongside some of the other changes set out below, is intended to raise standards in the sector. The Welsh Government consulted on the new powers for the EWC, alongside a draft version of the criteria to be used in ITE accreditation, in autumn 2016.

Current and proposed systems of Initial Teacher Education

Granting the EWC the power to produce accreditation criteria and award accredited status to initial teacher education (ITE) programmes is part of a wider shake up of the system. At present ITE is currently provided from three centres in Wales:

  • North and Mid Wales centre: Aberystwyth and Bangor Universities;
  • South East Wales centre: Cardiff Metropolitan University and University of South Wales; and
  • South West Wales centre: University of Wales, Trinity Saint David.

These centres were funded by the Higher Education Funding Council for Wales (HEFCW), who also set the accreditation criteria. Estyn currently inspects ITE provision in Wales to ensure its quality and compliance with the requirements for ITE. The latest Estyn inspections for the centres found:

  • South West Wales Centre’s current performance was adequate, while its prospects for improvement were good in 2012;
  • South East Wales Centre’s current performance was adequate, but its prospects for improvement were unsatisfactory in 2013; and
  • North and Mid Wales Centre’s current performance was unsatisfactory as were its prospects for improvement in 2015.

As a result of this, and other reports which were critical of the sector, the Welsh Government decided a change was needed. Foremost amongst these was Professor John Furlong’s Teaching Tomorrow’s Teachers report. You can read our blog on the Furlong Report here.

The recent draft accreditation criteria consultation proposed the creation of a Teacher Education Accreditation Committee (TEAC), which would be based within the EWC. The Welsh Government proposed that the TEAC would comprise ‘members of the profession, experts in the field of initial teacher education, a practising or very recent head teacher and a representative of Estyn’ and it ‘would be responsible for accrediting all programmes of initial teacher education’ in Wales. In the explanatory memorandum that accompanies the Order, the Welsh Government estimates that:

The Accreditation of Initial Teacher Training Committee will require initial start-up costs of £260,000 and will be paid over two financial years 2016-17 and 2017-18.

The consultation document also highlighted the Welsh Government’s intention that all future ITE programmes will be led by ‘partnerships’ made up of a Higher Education Institute (HEI) and a number of ‘lead partnership schools’. It is anticipated that the ‘HEI together with all of their partner schools – must take joint responsibility for their contributions to the programme’.

Under the partnership system proposed in the consultation HEFCW will retain responsibility for administering funds for teacher training. Estyn will undertake inspections of ITE provision every five years, ideally one year prior to a partnership’s re-accreditation with the TEAC, so that inspection reports can feed into the accreditation exercise. Estyn’s inspections will be undertaken using a revised inspection framework and guidance that explicitly takes into account the TEAC’s accreditation criteria.

The explanatory memorandum to the Order clarifies the Welsh Government’s expected timescale for the reform of ITE, and is replicated below.

teachertable

A voice of opposition

The Welsh Government’s summary of responses to the ITE Accreditation consultation stated that:

For many it seemed a logical step for the Education Workforce Council (EWC) to have responsibility for accrediting programmes of ITE and establishing a Teacher Education Accreditation Committee (TEAC). Respondents from the Teaching Councils of Ireland, Scotland and Northern Ireland said this was in line with statutory arrangements they have had for a number of years.

However, the NASUWT union, in a paper submitted as part of a Children, Young People and Education committee consultation on teachers’ professional learning and education, noted that:

The EWC in its current form is not an appropriate body to take on the statutory responsibility for accrediting all programmes of ITE in Wales.

The NASUWT has argued that the EWC would need to demonstrate that it can act coherently, consistently and equitably in relation to its existing responsibilities, before additional functions are allotted to it.

The Association of Teachers and Lecturers (ATL) paper to the same consultation also noted that it was:

…concerned about the configuration and remit of the EWC. Currently the Council is made up of people appointed by Ministers. We strongly believe there should be no more ‘mission creep’ or an extension of the remit of the EWC until it includes members elected from all the education unions.

The Welsh Government, in the draft criteria consultation, argue that:

Enhancing the role of the EWC, will enable the education profession to exercise a collective voice; both in policy making and leading the improvements in standards and the process of change. A committee of the EWC could include a range of stakeholders, including representation from the teaching profession itself. It would also be well placed to provide leadership and coordination for teacher education on a national level, while at the same time being at arm’s length from the Welsh Government.

 

What type of youth service does Wales want? Assembly Members to debate Committee report

02 February 2017

Article by Michael Dauncey, National Assembly for Wales Research Service

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

Group of young people sitting at a cafe, with mobiles and tablets, top view

On Wednesday (8 February 2017), Assembly Members will debate the Children, Young People and Education Committee’s report of its inquiry into the effectiveness of the Welsh Government’s strategy and policies in respect of youth work: What type of youth service does Wales want? (PDF 1.11MB).

The Committee concluded that a ‘radical approach’ is needed to address an ‘alarming decline’ in youth services across Wales. It made 10 recommendations to the Welsh Government on how it should deliver the youth service that people in Wales want.

The Committee’s inquiry focused primarily on:

  • Young people’s access to youth services;
  • The effectiveness of the Welsh Government’s strategy and policy on youth work; and
  • Funding for youth work from local authorities, the Welsh Government, the European Union and the third sector.

Over 1,500 young people submitted their views to the Committee and their clear message was: when youth work provision disappears from a young person’s life, the impact is considerable. The Committee also heard from stakeholders working with young people. Here is what they had to say: six minute video.

What does youth work look like today?

The Committee heard that financial pressures have had a serious impact on youth work over recent years. Welsh Government statistics show that the total amount of expenditure which local authorities budget for youth services has reduced by almost 25% over the last four years. There has also been a decrease in the proportion of young people registered as accessing youth work provision from 20% in 2013-14 to 17% in 2015-16. The Committee described this as an ‘alarming downward trend’.

The Committee heard the outlook for the voluntary sector is seen with no more optimism, with the Council for Wales Voluntary Youth Services (CWVYS) reporting that 30% of its members were unsure about their financial future.

The Welsh Government’s launched its National Youth Work Strategy for Wales in February 2014, intending to set the direction for youth work organisations for the following years until 2018. The Minister for Lifelong Learning and Welsh Language, Alun Davies explained (PDF 662 KB) that the strategy seeks to maximise the role and contribution of youth work provision to young people’s engagement and success in their mainstream education.

The Committee considered the extent to which the capacity in the voluntary and statutory sector is maximised, concluding that:

There needs to be an urgent and radical intervention on the part of the Minister if he is to deliver his ambitious vision of a truly open access, bilingual provision. He must also address the lack of strategic and joint working between the statutory and voluntary sector, which the Committee believes is a significant barrier to delivering a universal youth work offer.

What role should the Welsh Government take?

The Committee recommended the Welsh Government reviews its National Youth Work Strategy and refreshes the existing Extending Entitlement statutory guidance, which was issued in 2002. The Minister told the Committee that the current strategy is being reviewed, the findings of which will be published in Spring 2017. He said this would form the basis of a new strategy from 2018 and work to refresh the statutory guidance.

Evidence submitted to the inquiry by stakeholders showed they believe there is a lack of leadership and strategic direction from the Welsh Government. The Minister’s views on the current state of youth work in Wales differed considerably to those of the local government Principal Youth Officers Group and CWVYS. The Committee called on the Minister to work with these organisations, ‘harnessing their expertise and understanding’ to make progress on improving youth work provision.

What type of youth service does Wales want?

Many of the contributors to the Committee’s inquiry called for a new national body to be established to drive forward youth work policy and implementation across both the statutory and voluntary sectors. These stakeholders believed a national model would, as the Committee’s report puts it, ‘enable better collaborative processes, reduce duplication across the sectors, raise the status and profile of youth work, enable workforce development’ and ‘maximise the available resources for the benefit of young people’.

Alun Davies AM told the Committee he does not intend to ‘nationalise’ youth services or seek to deliver them centrally from Cardiff Bay. He said he would decide on a future model for youth work provision in early 2017. However, he added:

Overwhelmingly, my view remains that this is a matter for local government to take these decisions and not a matter for a Minister to intervene in. (…)

The Committee has recommended that the Welsh Government introduce a national model for youth work, encompassing both statutory and voluntary provision.

In its report, the Committee expressed concern about a ‘lack of accountability’ for how local authorities use the funds which are nominally allocated for youth services within the Revenue Support Grant (RSG) but are not hypothecated for that purpose. In response to a question about the possibility of setting outcomes for local authorities as a condition of funding, the Minister said:

Setting outcomes by local authority area—I’m happy to consider that. (…)

I’m more attracted by the concept of outcomes than I am by hypothecation … If we are going to look at a national outcomes framework, then perhaps how we break that down into local areas could be something we could look at.

The Committee has recommended that the Welsh Government develop an accountability framework for local authorities’ use of funds for youth work via the RSG, including sanctions if these are not delivered.

The Welsh Government’s response

The Welsh Government’s response (PDF 293KB) has been published today (2 February 2017). The Minister for Lifelong Learning and Welsh Language, Alun Davies, has accepted 5 of the recommendations and accepted the other 5 in principle.

How to watch the debate

Assembly Members’ debate on the Children, Young People and Education Committee’s report is scheduled for around 4.00pm in Plenary on Wednesday 8 February 2017. It can be watched on SeneddTV and a transcript will be available on the Assembly’s Record of Proceedings.