Scotland: Re-skilling through the Oil and Gas Transition Training Fund
The Scottish Oil and Gas Transition Training Fund was a three-year program established in February 2016 to support workers in the struggling oil and gas sector. It provided grants of up to £4,000, (approximately $5,700) to workers so they could undergo training and reskilling in fields with strong employment potential. The fund helped 4,272 workers, 89% of whom were employed as of 2019 — though about half are still in oil and gas jobs. The effort was considered a success and informed a key COVID-19 pandemic response measure launched in October 2020: the £25 million ($32.5 million) National Transition Training Fund, which prioritizes workers who have lost jobs in declining sectors, including aviation and oil and gas.
The U.K. oil and gas sector lost 150,000 jobs between 2014 and 2017 because of a sharp reduction in oil and gas wholesale prices. This recession has strongly affected Scotland, where the industry is concentrated. The Scottish government set up an Oil and Gas Task Force to propose recommendations to support workers who were facing redundancy. The task force worked with the Skills Development Scotland (SDS), the national skills agency, to develop an Oil and Gas Transition Training Fund. The fund was approved by the First Minister of Scotland on February 1, 2016.
Policies, Actions and Results
The Oil and Gas Transition Training Fund offered grants to workers in the sector who had lost their jobs since 2015 or were at risk of losing their jobs. The training focused on areas where the Fund expected growth in the labor market, providing a strong footing for alternative future employment opportunities. There were no requirements for participants to move to greener jobs, or even out of the oil and gas sector.
The program was coordinated by SDS with a team of 12 people, including professional career advisors. Given the urgency of the social situation, the fund was up and running even before the rules, guidance and processes were in place. The national government allocated £12 million ($17.2 million) to the fund for three years, from February 2016 to March 2019. Since staff members also had other duties, the fund’s administrative costs were low: just £178,000 (approximately $255,000) out of the £12 million over the three years.
The program offered two training options for workers:
- An “individual route,” defined with advisors who checked whether the applicant’s preferred training wishes matched the needs of the labor market. This option was requested by the government, and SDS had to develop it from scratch in a very short time. The maximum funding for training was £4,000, (approximately $5,700), but it turned out that only about £2,400 (approximately $3,400) was needed for training each participant, which is part of why the program was able to train more workers than its initial goal.
- A “procured route,” consisting of trainings in fields where there were recognized skills shortages and employment opportunities, such as truck drivers, wind turbine engineers, railway engineers and welders.
Eligibility criteria for both options required applicants to show that the training would help them get a new job, and to be actively seeking employment. SDS helped them with tasks such as updating their resume and networking. The program also advertised the fund on radio and newspapers to mobilize employers, attended job fairs to connect with job seekers and showcased applicants’ experiences on the SDS website.
The program surpassed its initial goal to re-employ at least 1,000 workers per year, helping 4,272 people through March 2019 — the vast majority, 3,910, through the individual route. Nine in 10 participants said they were satisfied with the program, and 68% had already gotten new jobs — however, 53% of them are still in the oil and gas sector. (A later case study from January 2020 by the EU’s Platform for Coal Regions in Transition found that 89% of participants were employed, 47% of them still in the oil and gas sector.)
While demand for the program exceeded capacity (there were 10,500 applicants), those who weren’t accepted could still receive SDS’s career advisory services. This support was essential, as local authorities in Northern Scotland, such as the city of Aberdeen, had little experience in dealing with issues such as unemployment and loss of housing. Since many workers in this sector had been at their jobs for decades, they also needed to learn how to search for jobs in the modern labor market.
There is limited information about the specific jobs and sectors in which participants found work, or the extent to which they align with Scotland’s climate goals. Early in the program, SDS leadership had indicated a desire to leverage Scotland’s strengths in offshore engineering, subsea technology and offshore goods and services, and redeploy skilled workers in the energy, engineering and manufacturing sectors. Profiles on the SDS website feature participants who found jobs as a dual fuel installer, an electrician, a drone pilot and a medical device quality manager.
Scotland’s experience with the Oil and Gas Transition Training Fund informed a key COVID-19 response measure launched in October 2020: the £25 million ($32.5 million) National Transition Training Fund. The new fund prioritizes workers in declining sectors, including aviation and oil and gas, and aims to boost the supply of skilled workers for green jobs as part of Scotland’s transition toward a net-zero economy. The new fund is designed to help 10,000 people aged 25 and over, including 6,000 people by March 2021.
- Mobilization of the national skills agency: The management of the fund is regarded as successful, largely because of the government built on the existing capacities of the SDS and its industry knowledge. The agency was able to identify skills shortages, prepare trainings based on clear evidence of demand and provide strong personal support to applicants.
- Speed of program design and implementation: While this rapid implementation raised operational challenges at the beginning, it is seen as contributing to its high impact.
- Training tailored to applicants’ preferred choices and needs: Applicants were in control of the type of support they received. They were given two options for their training and tailored advice based on the skills they had already acquired. Decisions were made by advisers based on workers’ needs, rather than following a set of rules. This flexibility is regarded as a success factor for providing adequate training in terms of content, timing, location and format.
- Building a foundation for national just transition efforts: This project helped lay the groundwork for wider Scottish just transition efforts, including the National Transition Training Fund and Just Transition Commission.
Challenges and Gaps
- Potential financial barrier for lower-income workers: The fund only covered direct training costs, not overhead costs such as travel, accommodation and food. These expenses could be covered through a partnership with the U.K.’s Department of Work and Pensions and some financial support from former employers, but not for all applicants. In addition, grants were given only after workers completed the training. Information about the availability of additional support could have been clearer.
- Incomplete sectoral transition: Since about half of participants were re-employed in the oil and gas industry, they may face unemployment again soon as the industry continues to decline.
- Skills Development Scotland staff capacity: The advisers were supporting the program alongside other roles, and the program didn’t have a dedicated management and administrative team. Assigning a special team to the initiative could have helped smooth the rapid deployment.
- Difficulties in maintaining income levels: Workers in the Scottish oil and gas sector had high incomes, and many applicants had unrealistic expectations about the salaries they could earn in other fields.
- Lack of data to assess success: Through an independent consulting company, SDS asked applicants to share information, on a voluntary basis, on their employment status three months after their training. Since only 36% responded, the agency didn’t gather enough data to track applicants’ careers.
- European Commission. 2019. Oil & Gas Transition Training Fund, Scotland. Case study, Platform for Coal Regions in Transition. Brussels.
- Donoghue, D. 2019. Skills Development Scotland: Oil & Gas Transition Training Fund Review. Glasgow: Hall Aitken and Skills Development Scotland.