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SPEECH BY PETER LOBBAN,
THAMES GATEWAY EVENT,
WEDNESDAY 30 NOVEMBER

Good afternoon ladies and gentlemen. On behalf of ConstructionSkills can I say how pleased we are that you have all taken the time to be with us here today.

We see today as a first key step in addressing the major challenge that lies before all of us and committing to taking positive action.

I think it is helpful to remind ourselves of the size of the challenge. By 2016, London’s population is expected to grow by the equivalent of six cities the size of Cambridge. The Thames Gateway is going to provide a major part of the solution to this growth. New homes, new jobs, new infrastructure – running from Tower Bridge right through to the Thames estuary. And along the way we now have the 2012 Olympic Games. Of course that all means it is very high profile in political terms.

It is also very high profile in construction terms. The question that I would pose is: Is it a construction problem or a construction solution?

Following the immediate euphoria of winning the 2012 Olympics, concerns have started to be expressed as to whether there will be the skills available to build the Olympics facilities. At one level that concern is somewhat misconceived.

The Olympic facilities themselves will undoubtedly be iconic structures but in employment terms they will be quite small beer. In the peak year the number of construction workers at all levels, from contracts managers to craftspeople, will be around 7000. The average number of workers in each of the 6 years to 2012 will be under 5000. That is less than a quarter of a percent of the UK construction workforce.

However the Olympics comes on top of a huge programme of projects scheduled for construction in the South East and Greater London area. There are £34billion worth of new projects of over £100 million each in the pipeline to add to the normal underlying construction and maintenance activity. That volume of demand will attract a mobile workforce from the whole of the UK, and beyond.

I have no wish to be known as the Michael Fish of the construction industry, but for me the real question is not whether there will be enough skills to build the Olympic facilities, but where these skills will come from – from the Gateway, from the rest of the UK or from abroad. And I don’t see that as a matter of construction skills research. I see it as straight political choice.

In terms of the UK construction industry we forecast that almost ½ million workers will have to join the industry in the next 5 years. Following lots of careers work and promotional campaigns there is increasing interest in joining the industry. More work is in hand to ensure adequate entry at professional levels but the great news is that there is no shortage of applicants at craft level. The bad news is that there are insufficient jobs for them to start.

This paradox is down to the structure of the construction industry. Short term contracts and self employment give great flexibility to deliver construction projects, but they give a poor business case for investment in skills. In Scotland and the North of England self employment accounts for some 30% of the workforce; in the South of England and London self employment accounts for 70%-80%. In Scotland and the North we can place 6-7 apprentices per 100 workers; in London we are lucky if we can place 1 per 100. With a few notable exceptions London is currently a desert for craft apprenticeships.

Lack of opportunities to practice on site is the catch 22 that scuppers many well intentioned training initiatives. You can teach knowledge, but as Tiger Woods shows it takes lots of practice to attain a skill. There are many thousands of young people studying full-time at FE Colleges who cannot find an employer so they can practice and without that they will never become qualified. And this is a particular problem for young women and people from visible ethnic minorities, who represent less than 1% and 3% respectively of the construction craft workforce.

The strategy that we are adopting in our ConstructionSkills Sector Skills Agreement is to focus on major construction projects. To build agreements with the supply chains involved, placing apprentices with subcontractors so that they can get the work experience to practice what they have been taught and become competent and qualified on the job. We are piloting a new programme-led pathways approach whereby successful first year full-time students can be given a second year on major construction sites to get the practice to become qualified. We have developed a STEP programme whereby we pay employers to give local people a work trial period so they can demonstrate their worth. And we are looking to expand on our successful Sustainable Training for Sustainable Construction joint initiative with the Housing Forum which trains and qualifies local people on local housing refurbishment projects. We are also working with the Princes Trust on a Construction Team initiative which motivates economically inactive young people to get qualified in construction trades.

The Thames Gateway provides a unique opportunity. With at least a fifteen year build and redevelopment timescale it is a long-term programme of projects offering the time to give work experience to many apprentices. It is based in an area with high visible ethnic minority representation offering the chance to significantly change the face of the construction industry. It gives us the opportunity to put the building blocks in place to create sustainable communities, to strive for social inclusion and long term community growth. Not just in building the facilities but in maintaining them thereafter.

These are objectives that many policy influencers are spelling out loud and clear as being key priorities for the development. The Institute for Public Policy Research Commission on Sustainability in the South East has called for an “approach to growth, driven by quality of life priorities, that seeks to promote resource efficiency, reduce disparities within the region and support government efforts to address inter-regional disparities in economic performance”.

From that stand point the Gateway is a solution not a problem. The projects can create long-lasting benefits for the local communities. If we get it right we can be a beacon of good practice and sustainable development. We will be a showcase for the world; a Barcelona or Sydney.

So what needs to be done? We need to create a framework which supports the development of a diverse economy within the Thames Gateway, which supports existing employment and secures new opportunities for local people.

In building this framework we need and want to work together with Registered Social Landlords and Housing Associations, local authorities, major contractors, sub-contractors and other partners in the Thames Gateway footprint. We need repeat construction clients to recognise that it is in their own economic interest not to go for cheapest short term price but to value investment in the local skills base that they will need in the longer term. We need Government skills funders to recognise the effectiveness of supporting local work experience, particularly for adults.

We need local support organisations to come together with trainers and employers to put together the total package that is required to support atypical industry recruits. A total package because training into employment is like a cake: you need all the ingredients or it flops. Most importantly, we need to pull together now. We need to catch the bus before it leaves.

I have a few slides here which map out our vision for the framework and key engagement stages in the Olympics and Thames Gateway development.

Vision for the framework and key engagement stages in the Olympics and Thames Gateway development

This is an overview of all the different components that lead us to 2012 and beyond, including requirements for Thames Gateway and broader activity in that timescale, and the key partners with whom we need to engage. So it is the stadiums, the utilities, and transport, but it is also the regeneration of the housing in the area, the development of the Olympic village and the ongoing Thames Gateway redevelopment. For the Olympics, the period between 2008 and 2010 is the main period of activity for most construction occupations. Of course the broader Thames Gateway work started some time ago and will continue well beyond 2012.

Our engagement with key partners at the right time in the development is crucial. For example we will need to engage early on delivery of the transport infrastructure for the Olympics. We need to identify the timings for the key Thames gateway projects and pick up with key employment and skills bodies.

One of the earliest areas of construction activity is the housing refurbishment programmes. Our event today, bringing together the London boroughs, Housing Associations, contractors, funding and training providers, and other relevant partners such as the Construction Youth Trust, is an important, and early, milestone in the process.

In 2006 we will start to deploy the National Construction Skills Academy, in the form of on-site training units, initially at Stratford. This will enable training and assessment to be delivered on site, where the work is happening and the majority of workers are situated. In many cases workers will already have the skills; it will be a case of sitting a Health and Safety Test and being able to prove their competence. In other cases, additional training can be delivered, through our On Site Assessment and Training scheme. Construction is not taking place on one fixed site, so training must be mobile and deliverable on-the-job. We have solid processes for doing this, already tried and tested in other major developments such as Paddington Basin regeneration, Heathrow Terminal 5 and the St Pancras Channel Tunnel Rail Link.

Vision for the framework and key engagement stages in the Olympics and Thames Gateway development

One of the key success factors will be to deliver a sustainable skills route. The regeneration is taking place in areas of high deprivation and the question is how can we offer people a long term training and employment route? We have decades of continuous work ahead of us – so let’s get people started on the training ladder now. For example by becoming trained and qualified on local housing refurbishment, local people can move onto working on Gateway projects before being involved in fitting out the Olympic facilities. By meshing with the different construction phases for each project and providing a long pathway of skills development, we can provide real sustainable opportunities for the local communities.

There are already many organisations and projects in the Thames Gateway area and beyond, that are working hard to engage local people and communities in local construction projects. ConstructionSkills, as the Sector Skills Council for Construction, is committed to playing its role. We have set up a dedicated ‘Constructing London 2012/ Thames Gateway Team’. We are taking the lead with Summit Skills in the Sector Skills Council cluster for building the Olympics, and we are a key player on the Strategic Forum Olympic Task Force.

We want to work with partners to support and co-ordinate the skills agenda in the Thames Gateway, pulling together initiatives and ideas, to ensure that local enthusiasm and resources are harnessed to deliver a legacy of skilled and committed people who will help the communities thrive for decades to come.

Today, I’m pleased that we are making a start in bring together registered social landlords, London Boroughs and major contractors and residential developers involved in social housing, as well as some of the schools and colleges operating in the London Thames Gateway and other important stakeholders including the LDA and LSC.

For the rest of the day we will explore how training and employment opportunities can be best used to ensure that local people are at the heart of building sustainable communities in the East of London.

We hope we will all leave with an enhanced knowledge and incentive to start incorporating sustainable training initiatives into Thames Gateway projects. The models we create will leave a lasting legacy for the South East. If we get them right they can be models for the rest of the UK.

Your input today is vital. Outcomes from the workshops and discussions will shape the development of a clear action plan that the Constructing London 2012 Team will facilitate, assisted by a series of follow-up meetings with the organisations represented here today and others as we roll out our training and skills programmes. I look forward to hearing your thoughts and views throughout the day.

Thank you.

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