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Training? In the oil and gas downturn? You must be kidding!

If you’re in oil and gas, the chances are that investing in training may be the last thing on your mind right now.
But that could be a costly mistake — especially if you are an Engineering Construction Industry Training Board (ECITB) member and have to pay the mandatory levy.

Every year, companies across the UK leave money on the table by not claiming back some or all of their levy. And for those in the oil and gas supply chain, that could have long-term consequences.

A blessing in disguise

The ECITB is a statutory organisation which acts on behalf of the engineering and construction industry. At the start of each year registered businesses have to pay a mandatory levy. The amount paid through the levy is relative to the size of each company, but all in-scope members “are required by law to complete an annual Statutory Manpower and Payroll Return. The information provided in the Return enables the ECITB to assess the amount of training levy payable” (1).

The levy can only be claimed back through accredited ECITB training providers— there is an abundance of choice across the UK, including project management training specialists like 20|20 Business Insight.

If fully utilised, the levy can be used to pay for staff training needs right throughout a company. To see if your company are levy payers please click here.

You could describe the levy as a training budget outwith the training budget — and in the current economic climate, oil and gas levy payers really should view it as a blessing!

Forecast: Bleak

North Sea oil extraction is the most expensive in the world due to declining reserves and high staff costs (2) and with an estimated 65,000 jobs lost across the UK oil industry (3) another 10,000 are still at risk in the North Sea (4).

While analysts and investors alike had initially thought that oil prices would hit their lowest during 2015, it is now predicted that any real upward spike won’t happen until late 2016 (5). The question now is how far prices will drop as the Organisation of Petroleum Exporting Countries (OPEC) continue in their production of crude oil.

Hong Kong-based CEF Holdings CEO, Warren Gilman, says that although the barrel could hit $50 again next year (6), it will be short lived and there is little doubt that barrel prices will quickly fall again, potentially below $30 (7).

It’s time to get back every penny!

As thousands lose their jobs, and companies attempt to cost-cut by any means possible, it is hard not to think about the longer-term knock-on effects to the sector and wider UK economy. As Andy Greenwood, manager at Air Energi, said: “As the downturn continues and more talent is released from the sector and region, there is a real danger that this will open an even bigger skills gap.” (8)

And he is right: when the recovery does begin so too will the inevitable mass recruitment. But the market will at that point no longer be flush with experienced candidates, and companies are going to need big, fat training budgets.

And that’s where the ECITB levy becomes worth its weight in gold…

Project success is key

Projects are a fundamental part of the oil and gas supply chain, and without project personnel companies could not maintain day-to-day operations. Projects are also where companies can lose the most money, with projects running over budget and behind schedule.

With the industry in crisis, keeping to budget and scale should be a top priority, so it makes real economic sense to ensure project staff have the right skills, knowledge and tools to keep their projects on track.

20|20 Business Insight are the UK’s leading provider of specialised and bespoke project management training and consultancy, and we won the ECITB Training Provider of the Year 2015.

All of our Association for Project Management (APM) and ECITB courses can be claimed back through the levy and we are the only providers of the City & Guilds Certificate in Project Controls course in the world. For our APM and ECITB course range please click here.

It won’t be so easy in 2017

This year saw training budgets put in place, and then torn apart and in some instances scrapped, and at 20|20 we see no reason why 2016 will be any different — except in those companies ready to maximise on their ECITB levies.

As the information given to the ECITB relates to the previous year, the levy is dictated by past staff levels. That means the figure paid in 2016 will relate to 2015 data and as jobs losses only began to accelerate during this year, next year’s levies will not differ much. However, as 2017 will reflect 2016 data it is expected that levies across the oil and gas and subsea sector supply chains will fall significantly.

And it’s important to remember that there’s no avoiding the ECITB levy — companies are legally bound to pay it, and so fully exploiting what’s being paid out for 2016 is a no-brainer.

What’s the next step?

If you’re an ECITB levy-payer, this is when you should be sitting down, looking over personal development plans and training needs and comparing them to what’s available through accredited providers like 20|20.

There’s never been a better time to take full advantage of money you’ve already paid, and if your training needs include project management, 20|20 will work with you to find the best possible way to maximise your ECITB levy.

And that means you get to keep developing your staff, they gain internationally-recognised qualifications, and when the industry finally does recover you’ll be ahead of the game with a fully trained workforce.

If you would like to discuss how 20|20 can help you maximise your levy please get in touch.