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Speeches and presentations

ConstructionSkills Open meeting
Question Time

    Peter Lobban, Chief Executive, ConstructionSkills (Facilitator)
    Allan McMullen, Chief Executive, CITB Northern Ireland
    Graham Watts, Chief Executive, CIC
    Sir Michael Latham, Chairman, ConstructionSkills
    Sunand Prasad, President, RIBA
    Susan Anderson, Director of HR Policy, CBI

Peter Lobban: Good afternoon, ladies and gentlemen. Welcome back to our final session. This is your opportunity to ask our industry leaders your questions.

I have a few questions to start the ball rolling, but if you can also be thinking of a few, I will point you out in due course and get you to ask a question. Before that, can I introduce our Panel? [Introduces Panel]

I will start the ball rolling with a really easy general question, which is: what is your view of training and skills in the UK construction industry? Nobody knew they were going to be asked that, so it is a question of who would like to respond first!

Sir Michael Latham: There is a lot to do. CITB, as it used to be called, has been involved in this since 1964. When I look back to the number of apprentices that there were in 1964 and the number there are now, it is not the same. But then the industry has changed dramatically as well, because in those days large numbers of firms of all sizes employed men directly – not only men, but women as well. Now, many of the major contracts and many of the major homebuilders, and indeed the medium-sized builders, use specialist contractors working for them.

That has been linked with another factor, which is that in the south of England, very large numbers of firms, and very large numbers of men, are working in labour-only gangs, which does no training at all, and that is disappointing. When I go to Scotland, for every 100 men on site, there are seven apprentices. In London and the South East, the figure is 0.9, so there is a very substantial difference in different areas of the country. That is why ConstructionSkills has responded in conjunction with our partners and with the trade federations and so on, with what we call the programme-led apprenticeships position, by which somewhere between 7,500 and 10,000 young people who are full-time students in colleges of further education, particularly in the south of England, can get some site experience. At the moment, as they are full time students, they do not have an employer, and if they don’t have an employer they cannot get site experience; if they can’t get a site experience, they cannot pass their NVQ or compete a framework apprenticeship.

The reason we have gone down the programme-led apprenticeship is so that these full-time students, because they will be hopefully placed by the major homebuilders group and the major contracts group with their specialist contractors, can get some site experience and can complete a framework apprenticeship. Indeed, the number of youngsters who have completed a framework apprenticeship under ConstructionSkills supervision has risen dramatically over the last three or four years. A few years ago, it was about 35% and now it is over 70%. That is really good. However, there is still an awful lot more to do, an awful lot more to do, and that’s what we are here today to discuss.

Peter Lobban: Sunand, a view from the architects end of this.

Sunand Prasad: I think we are carrying a double burden. One is historic, a deficit that Michael has alluded to. After the war especially the professions very firmly took an academic direction. I think that until then, even engineering and architecture were considered to have a large practical element, and that has gradually withered away. Side by side with that, in our political culture generally, there has been a great boost to academic ability, especially in the last 20 or so years. I think we have stopped respecting manual dexterity and craft skills. Hasn’t that been a mistake?

For example, what the secondary modern system was supposed to do after the War simply has not been delivered in the sense of respecting some of the skills that we vitally need. I think that is one burden.

The other one is that the world is changing very fast. We need to learn new skills all the time. Somebody said to me just now the saying that if you think your firm is through changing, you’re through! That is the challenge of the world at the moment. The world is changing very fast, and not only do we have to repair the skill gap, but acquire some very new skills.

On the optimistic side, I think that things are now going in the right direction. Some of the mistaken policies and “wrong turnings” that cultures take are coming back together, and we are moving, if hesitantly, towards a more integrated industry and a better skilled industry.

Peter Lobban: Susan, perhaps a view from outside construction, although you cover construction as well!

Susan Anderson: To give the big picture, people have talked about skill shortages, and we see that across the economy, particularly in these important sectors, science, technical engineering sectors, so I don’t think you’re alone in facing some really significant skill shortages. As an outsider, there are some reasons to be optimistic, and you have an excellent Skills Council that obviously helps. You have some new diplomas coming on line that will hopefully show young people the exciting careers they can expect in this sector. I am optimistic about the new diploma offers for 14-19 year olds.

Yes, of course, we need to grow more apprenticeships, but the Government are now aware of that, and again, it seems to me that you and the industry are responding well to that.

There are reasons why we could be optimistic and certainly when I talk to the good companies that I see in construction, they are very much rising to the challenge. There is a report that we did recently, for example, on an area looking at migrant workers, and we know that it has been an area where you have had challenges in construction. We did a report with the TUC to demonstrate what good construction firms were doing to address some of the challenges about migrant workers coming with poor English skills. You have some really good employers. There are obviously issues around the not-so-good, but I know you are dealing with them. As somebody who looks at the big picture you have much to be proud of, and you have a very good base on which to work. Certainly, there are no grounds for complacency, but you are addressing the issues head on and that is to be commended.

Peter Lobban: Thanks, Susan. Allan, a perspective, not just for Northern Ireland, but as ex-President of CIOB!

Allan McMullen: For some time I have had grave concerns about employer involvement, but what is the definition of an employer? On the optimistic side, we have so many young people wanting a job in the construction industry. They go into training, and then they are disappointed they can’t get a job. The fact they can’t get a job during their training, they can’t get a placement is a major issue.

Also a concern over the last four or five years, there has been a boom in the Republic of Ireland and Northern Ireland and the rest of the United Kingdom, of course. Anybody who knows me, knows I’m a big football fan. We have seen the premiership here in England full of foreign players, and that is very entertaining with three firms in the semi-finals of the Champions League, but the home nations didn’t qualify for Euro ’08.

That is what’s happening in the construction industry. All our young people who can’t get jobs, can’t get placements, are not getting the skills because the industry has employed foreign workers, and foreign workers are now going to leave, and the skills are not there. The Olympics is a big chance to leave a legacy of skills, but we have to give these young people a job and a placement. We have to pay them.

We had a very interesting debate at our table about it, but I passionately believe that that is where the problem lies. The main contractors don’t see it as their job, the sub-contractors don’t feel they are getting paid enough money. Whose is the problem? Let’s blame ConstructionSkills, let’s blame the Government, let’s blame the colleges. We are all in this together, and my message to employers is ‘let’s find a way of giving these young people a chance’.

Peter Lobban: Thanks, Allan. Graham, you mentioned in introducing your questions that the industry had changed a great deal in the time you have been with it. How do you view the industry from the point of view of training and skills?

Graham Watts: The first thing that I keep reminding myself which we sometimes forget is that the industry lost half a million people during the last big recession. That is a very big blow to recover from. The age profile in many of the trades actually reflects that, because quite literally some of those trades were decimated during that period. I don’t know about other people, but every other taxi driver I talked to used to work in the construction industry once upon a time, and they have never come back. That is the context in which we talk about skills today.

I am sure if Nick Raynsford were here, as a loyal Labour MP he would remind us that we have had ten years of reasonable steady economic growth. One of the problems is that in the first five of those years, the industry didn’t do enough about replenishing those lost people.

The positive side of it is that there were things like the positive image campaign and the work of construction skills, the last five years egged on by John Egan and John Prescott and others, and measurable targets for recruitment and retention. By and large, the industry has met all of those targets, so we are on an upward curve. My big worry, and I am sure many people in the room will share that, is what is going to happen over the next few years, because I don’t think many people will be predicting steady growth continuing for the next five to 10 years.

Somebody on my table very articulately said that with a squeeze in his industry, and it doesn’t matter whether it is house-building or civil engineering or whatever, the first thing to go will be training, and that is a big worry.

Peter Lobban: That gives us a fantastic link to my next question: After 10 or 15 years of steady growth, looking ahead over the next couple of years, we have house-building that is stationary at the moment, we have commercial property which has a bit of a question mark, and yet against that, still some very big projects, big contracts, infrastructure driven by different drivers, the Olympics, and the international market. How do you see that affecting demand for training and skills in the UK construction industry over the next couple of years?

Sir Michael Latham: To a great extent it needs to be client-led. As you rightly say, Peter, there will be real problems for some sections of the industry over the next few years, and indeed the house-building sector is already facing that at the present time. But there will also be a lot of big schemes coming forward, not only the Olympic Park but also Crossrail and many other projects all over the country. There is a huge programme in Scotland and in many other places as well.

I have been surprised – and I have shared this with Ministers, and I have shared it with Nick Raynsford, who by the way, apologises very strongly for not being with you, but he has had to go back for a vote at 4pm this afternoon, and he has been told he can’t be excused the vote – that more of the Government agencies such as the Highways Agency or the Environment Agency, the Ministry of Defence Estates or indeed local government have not been insisting on training as part of a long term strategic contractual requirement. When they have been engaged with contractors with their strategic partners, which many of them increasingly are, they are perfectly able to say to them, yes, we want you to be our strategic partner but we require a couple of things from you which will be contractually required. One is assuming that the job is of a reasonable length, but you will need to be involved in training. Secondly, you will need to be involved in ensuring that all the people on your site have CSCS cards or similar cards.

The role of the client is very important. I remember the day after my report was released at a big conference in July 1944, I was the guest, along with other people, of the then President of the RICS. The discussion round the table of about a dozen people there was about my report. One of the people there was Tony Palmer who was then Managing Director of Taylor Woodrow Construction. Tony said ‘Michael, I want to do your report, and I like your report, but I’m worried that while I’m doing it, my competitors won’t be, so they will undercut me. So I will do it when the Highways Agency tell me to”. In other words, when it is a requirement to me to go down the route of best practice.

I am delighted that Peter Cunningham, the Director of the Construction Clients Group, is a member of CITB now, because our involvement with the clients’ organisation is in my view extremely important, and particularly for training.

Sunand Prasad: We have often made the skills agenda be dominated by numbers, which is quite right, because there is a capacity issue. Michael very eloquently earlier today told us about the 7,500 major projects in the pipeline, and the £150 billion, and so on. If that is suddenly cut, you might say ‘whoopee, there are no capacity issues, so we’re okay’, but what this leaves out is a very serious quality problem, because we need the construction industry to deliver quality, I think, probably in an unprecedented way, if whole life costing, and especially the imperatives of climate changes and sustainability become embedded the way they are almost certain to become embedded.

In light of which, if you remember, a recent study showed that the majority of buildings constructed right now may be designed to Part L of the regulations, but actually as build they don’t comply. Sometimes people think that sustainability in dealing with that is entirely a design issue, but it is hugely a workmanship and site management issue as well. It is an area where quite new ways of judging quality are coming in. Air type has been one of them, probably the biggest, but there are all sorts of nuances that we have seen through, frankly I can say, our buildings failing. I have seen buildings that we have designed failing because of the site skill.

The need for high levels of construction skills will become stronger in a circumstance in which the dangers to training and apprenticeship exist because of the downturn in the economy. I think that is another double whammy, because we desperately need to build well in order to make possibly a diminishing resource go further.

Peter Lobban: Susan, do you have any observation?

Susan Anderson: I agree with what colleagues have said. We have to recognise there is an issue, and we know that if you are thinking about having to downsize, often rather than cutting people, you have a training spend. It is going to be an issue, I wouldn’t pretend it is not going to be one. We can overplay some of the gloom and doom scenarios. Certainly the businesses that we speak to, as our Director-General remarked recently, are doing very well, thank you, even in these difficult times. But for me, it is about this intelligence procurement, government doesn’t always get it right, and despite what it is saying about valuing skills, it still tends to go to the lowest cost bids. It is also down to business itself, to make more intelligent use of training spend, and sometimes we focus too much on how much is spend, how many days training people have had, and the tick-box type approach to training.

It is very much about making sure that we are training to competence, making sure that we have the right qualifications, which a compliance, regulatory model will intend to encourage us to do. It is about saying, how are we going to make sure that we have real bang for our buck in terms of our training spend, how are we going to make sure that we use our people more intelligently, and use their skills to help the next generation. It is intelligent use as well as more intelligent procurement.

Allan McMullen: There has to be opportunities for training with the Government’s plans to spend on infrastructure. Originally, there was a site in Manchester where Balfour Beatty had a contract to build eight schools, and they had a training hub at one of the schools, and it was simply a compound with three mobile buildings, and in the mobile building was a training room, an office and a workshop, and that was used as a focus for training. Every man came on to the site, there was an assessment done of his qualifications, of his competence, of his training need. It was a partnership under the National Skills Academy. I don’t think it is a particularly good title because it is rather grand, but in a practical sense, there was someone on site from the local college assessing the skill needs of all the workers. If a need was identified that was pooled and the contractor was then able to buy in the training in that compound. The men didn’t have to go off site, but the good thing about it was that it cost about £100,000 over the life of the eight schools, and they could move the mobile to each of those sites. Whenever you looked at the spreadsheet of the young lady who was coordinating it, you could see every man and woman on the job, what their qualifications were, what their training needs were. It was done in a very simple, practical way, and those simple practical solutions are the answer, rather than grand ones.

Somebody said today there were too many initiatives, but that is one I would certainly commend to tie into the infrastructure spend. The big projects can afford to provide that facility.

Graham Watts: I am less confident than I was a few weeks ago, that’s for sure. There are still many major projects on the stocks, and hopefully that will remain the case. I think the fact that the heat map of major projects between now and 2016 is still pretty solid is obviously very important. But set against that, the fact that house-building has pretty much ground to a halt so quickly is very worrying and it has worrying reminiscences of the late 1980s.

The important lesson to learn is that we need to keep training, and importantly the burden for that can’t just fall on employers who can’t afford to train. There is obviously a very significant role for government for the sector skills councils in that respect in the sectors that will need it.

Peter Lobban: I will ask myself the question if I can offer a reflection. It is partly in response to a question that Robert Hudson gave me, which is not so much a question but telling me off for putting up a question that only mentioned the MCG and MHPG in terms of initiatives on skills and cards, etc. My observation is that there have been times when the industry was just so big that it was really difficult to try to tell anybody they should wait for somebody who had a card or a qualification because they just had to get the job done and there were so few people. Provided it is not into deep recession, if it is just slowing a little, then may be there is a time for quality and skill to come through as being something that people compete on.

I have another question from our friends north of the border: how can we remain independent in the context of ConstructionSkills? It is not just Scotland, of course, it is the four countries approach, the four nations approach. Do you have any observations on how we perform in a four nations model such as ConstructionSkills?

Sir Michael Latham: I go to Scotland quite regularly as Ian knows very well. When I go to Scotland, I am always delighted to see what I find there because they take training very seriously there. His Federation and many other federations in Scotland do exactly the same. We have not needed to introduce our programme-led apprenticeships system in Scotland because the youngsters are taken on by firms, and trained in that way. Scotland still has a four-year timed served apprenticeship with a skills test at the end of it, so things are very different. We have absolutely no intention of changing that whatever. That’s up to Scotland to decide.

One thing I have noticed, both in Scotland and in Wales – and of course CITB’s writ does not run in Northern Ireland because Allan is head of a quite separate CITB in Northern Ireland – is that at present, when ones goes to the Scottish Advisory Committee or the Welsh Advisory Committee, all the discussion is about Scotland and Wales, because they are relating to the Scottish government or the Welsh Assembly government, and that is what happens. I want to encourage that because that is what they want, and that is the way their minds are focussed. Not only do I want to encourage that, but I have also said, and Peter and his team have been observing this, that I don’t want any papers coming before CITB/ConstructionSkills Board which are written in English terms, which has been the case in the past. Scotland and Wales have their own construction industries, Scotland has its own laws and its own education system which is quite different to England, and we must observe that and respect it, and not interfere in it.

Allan McMullen: We have obviously worked very closely with CITB and Great Britain for many years, so whenever we joined ConstructionSkills we did it very willingly. There are many advantages to Northern Ireland, but what you do realise is that it is amazing the different arrangements, we are engaging workers all over the United Kingdom. Scotland is more direct labour, Northern Ireland is very much self-employment, sub-contract, possibly the way the south of England is. One solution definitely does not fit all, but no matter what the delivery mechanism or the funding for the training or the skills, we have to have the same result. If the apprentices come from Aberdeen, Cardiff, Southampton or Belfast, it doesn’t matter; you should be trained to the same standard.

I would obviously also bring in the Republic of Ireland who have just come through a major boom. There is a lot of mobility of labour in north, south, east, west. We need to engage the training authorities, which we do, in the Republic of Ireland to make sure that the two Irelands are working to the same standards.

Peter Lobban: I will let off the other members of the Panel, to avoid the politics of the four home nations.

Who has a question from the floor?

Ian Billyard (Principal, Leeds College of Building): My question links in with these, but relates in particular to the last session, the second set of questions which Peter introduced, and that was about the fully qualified workforce. I am interested to note that if you look at the CSCS card, from the HSE, and we had quite a debate on our table about, the HSE see it as a basic competence. I know that ConstructionSkills have said that they support training to at least Level 2. When you look at UK plc, it is widely recognised that training to Level 3 (A level standard) actually brings about the most value; if you look at UK plc, and the desire to move to HE, that if you had Level 3 right, I believe you would hit the HE targets as well. I pose the question that should ConstructionSkills accord perhaps with some of the other sector skills councils that I won’t mention, that see Level 3 as the competent level within the workforce, does the CSCS card actually denote a fully competent qualified workforce?

Peter Lobban: Before I ask Sir Michael to give you the considered response, I will give him some time by saying, I was going to say it is ‘bricklayers for courses’ or ‘horses for courses’, and there are some parts of the industry, Ian, that would say Level 1 is fine for them in terms of the way that they do their work on site. There may be others where it is Level 4 because of the way they are interfacing off site/on site. I will let Michael come back with the official answer!

Sir Michael Latham: First of all, I think it is worth remembering that it is not so very long ago since there weren’t any CSCS cards at all. They only become very widespread – I know that Ian has a different system in Scotland, and I mustn’t interfere in that - after the 2001 Health & Safety summit which John Prescott addressed as Deputy Prime Minister that it really began to take off.

I take the view that one should be looking in the industry all the time for upskilling people. It doesn’t matter what skills they start with, we should be looking all the time to increasing their skills, whether they have come in as labourers, we want to upgrade them first to NVQ 2 and then hopefully to NVQ 3, or if they have come in as an apprentice, then can they do a foundation degree, can they do an HND, can they do an HSC or whatever, and also upgrading their skills all the time.

I remember a few years ago when the Government said that they wanted a situation by which 50% of people should be going to university, I said I am very favourable to the idea that 50% of the people should be increasing their education throughout their life, but if you are saying should 50% of 18 year old boys and girls be going full-time to university, I don’t think that is necessarily the best approach. What we should be doing, in my view, is upgrading people skills throughout the time. Our OFSTED programme and our UPARR programme have been achieving exactly that. There are very large numbers of people who are in the industry who don’t have any skills, but we have been able to upgrade them, and to help them finance that operation in so doing. We are working closely of course in that regard with our colleagues in the EPI colleges and also in the universities.

Peter Lobban: I am very conscious of time. I want to ask a final question, but does anybody on the Panel have anything to add on? [No] One final question!

Peter Cunningham (Construction Clients Group): I have a question for Sunand, and it builds on what Graham was talking about earlier, about challenges for the sector in the roundtable discussion, around sustainability. Obviously us clients are putting increased emphasis on having sustainable buildings. From your perspective as President of RIBA, how are you encouraging your members to engage with stakeholders throughout the supply chain, including facilities managers. It will certainly throw up a different set of circumstances and parameters in the operation of the building once they have been designed.

Sunand Prasad: That is a very good question. I thought it was going to be easy halfway through that question when you said ‘how are you encouraging your members?’. I was going to give you a whole spiel about what we are doing about climate change and the policies we have in place, the CPD programmes we are running, but your specific question relates to a broader issue about collaboration generally, and the fact that the industry desperately has to move away from its multi-professional separate specialisms model, to another model where specialisms exist because they have to exist, where people’s first instinct genuinely is to work collaboratively. The first instinct is not just to get the pencil out and start designing the building, but to ask the right questions and get the right team together.

All I can say in all honesty is that there are a lot of entrenched attitudes to break down before that would become widespread. I often think it is not just a question of skills but genuinely of attitudes, and those attitudes are set in schools of architecture. For example, we don’t actually teach collaborative work in schools of architecture. If you ask a school of architecture which may be has a business school next door to it whether they have thought of outlined business cases or how a client would get added value in conjunction with the other people, the answer is no, they’ve never taught it. You have the schools of planning and architecture next door to each other who do not collaborate, let alone the still embryonic profession of facilities management.

However, I think that PPP and PFI, albeit in a rather crude way, have brought together the consideration of the longer term view on the performance of buildings to the design end. In a sense, that should have been a far better result in terms of sustainability. In a sense, if you look at a pure model for PFI, this is great, this is what sustainability needs. It hasn’t quite worked like that, but it has triggered some of the consciousness that is needed. All I can say is that in our work, in the CPD and so on, we are encouraging that and promoting that as best we possibly can.

Peter Lobban: Thanks very much, Sunand. I am afraid time means we have to stop. I would like to thank our Panel, and perhaps you would like to thank them in the usual way. [Applause]

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