SPEECH TO THE BACH CONFERENCE, CARDIFF

4 MARCH 2003

BY SIR MICHAEL LATHAM, CHAIR, CITB,

AND DEPUTY CHAIR, WILLMOTT DIXON LTD

Itis a great pleasure to be with you today, here in this fine city and capital ofWales, and to be invited to speak at this, the opening of your annualconference, after you, Mr President.The establishment and maintenance of a good working relationship betweenCITB and Further Education is always vital, but now more crucial than ever. What I hope to share with you today are somethoughts as to the importance of the emerging Sector Skills Council network ininfluencing the Government agenda and initiating collaborative action. One of the keys to success is going to bethrough working with partners such as yourselves to achieve a measurabledifference in the recruitment and retention of the skills which the industryneeds if it is to increase its productivity and become world class inperformance. It is very good that yourconference is titled Meeting the Challenge.That chimes well with our current CITB Business Plan Addressing theIndustry Skill Challenges. On lookingat your programme for the next 3 days it is clear that we face many similarchallenges. One of the key goals of aSector Skills Council is to improve learning supply. So there is common ground for us to develop a jointstrategy. Sheila Hoile, CITBs Directorof Training Strategy, has told me about the most recent meeting of theCITB/BACH Strategy Group. It is takingthe lead in agreeing the priorities and the action plan which leads from them.We should not try to solve all the problems of the world at once. Instead, we should look for the areas wherewe can really make a tangible difference in a reasonable time scale by workingtogether. I will give an example ofthis in a moment. I welcome theapproach of the Group and I look forward to being kept in touch with itsprogress.

Let me up date the conference on ourprogress towards achieving Sector Skills Council status. Last August the CITB submitted itsExpression of Interest to become the Sector Skills Council forConstruction. It was good news that theSector Skills Development Agency accepted our submission at its Board meetingin September. We are now workingthrough the development phase, in partnership with the Construction IndustryCouncil and the CITB in Northern Ireland, but we are also continuing to developour strategic alliances with organisations across the built environment sector.We are working particularly closely with Summit Skills, which is the SSC indevelopment for employers in the Electrotechnical, Heating, Ventilation, AirConditioning, Refrigeration, Plumbing, and Gas Fitting sectors. I am very pleased to see that constituentparts of Summit Skills are both sponsoring and contributing to thisconference. I say this not only becauseCITB and its partners want the closest relationship with Summit Skills, butalso because I am myself Chair of two major organisations in the M & Esector and have strong links with JTL as well.There is no doubt that the Government is expecting great things ofSector Skills Councils. So what is the difference between a Sector SkillsCouncil and the former network of NTOs?In one word, INFLUENCE.Ministers perceive that the network will provide them with the singleemployer voice which they want, in sectors of economic and strategicimportance. There are clear indicationsthat Government are looking to a demand led model for vocational education andtraining at all levels. One indication of how seriously Ministers are takingthe setting up of the Skills for Business network is the joint approach beingadopted by DfES and DTI, a move we welcome and which is long overdue. However, that vital employer voice, whichthe Government wants to hear, will only be acted upon by government if therhetoric is backed up by comprehensive and respected research data and if astrong case is made for the proposed workforce development plans. CITB is already aware of the responsibilitieswhich this will impose on it, if it is to provide the necessary robust case toGovernment departments and agencies. Wecannot achieve this without input from our colleagues in furthereducation. It is good that one of the first priorities identified bythe CITB/BACH strategy group is to develop a template for the collection of acoherent and comprehensive set of data.Facts are vital and you dont have to be Mr Gradgrind to believe that.

The four key goals for any Sector SkillsCouncil are to reduce skills shortages, increase both productivity and theopportunities for training and development, and improve learning supply. Inorder to achieve these goals CITB has been working with employers andstakeholders from across the sector to identify the challenges for the industryover the next five years. The outcomeis summarised in a Workforce Development Plan.In it, we identify the three key challenges we face.

Thefirst of these is Image and Recruitment.We need to ensure that the industry has a sufficient supply of peoplewith the right skills to meet the needs of a rapidly changing industry. Currently construction is a buoyant industrywith up to 3.5% growth predicted in some areas well above the nationalaverage. Much of this is driven bypublic expenditure, of which the most recent is the Deputy Prime Ministersstatement to Parliament on housing and urban regeneration. CITBs Skills Foresight Report for 2002predicted that 380,000 people will need to be recruited into construction overthe next five years - 65,000 people to join the industry each year merely toreplace those leaving a steadily ageing industry. In addition, the Governments strong programme on hospitals,roads, schools, housing and infrastructure will require an increase in theindustrys workforce of around 11,000 a year over and above those wholeave. We did achieve this target in2002, but we need to maintain the momentum over the next four years. Current publicity over wage rates has alsodone much to raise public interest, but am I sure you would join with me inengendering a note of caution as to the general availability of such large wagepackets.

Thesecond key challenge is inextricably linked with the demanding targets set outin the Accelerating Change report for achieving a fully qualified workforce by2010. They are now being refined andtaken further by the Strategic Forum for the Construction Industry. We haveestimated that this could mean close to half a million people needing toachieve a vocational qualification at level 2 over that time period. We cannot achieve this daunting targetsingle-handed. It has to be a teameffort, with yourselves being an indispensable member of that team. It means looking at new models of trainingand assessment taking us all out of our comfort zones and into unchartedwaters. Whether or not we succeeddepends on whether we rise to the demands of a changing industry.

Thethird challenge which we have identified is to improve businessperformance. Evidence shows that only aminority of companies attach importance to proper investment in training as ameans of improving business performance.Current figures estimate that only 15% of construction companies and aneven smaller proportion of consultancy practices are recognised as Investors inPeople. A substantial programme ofskills investment will be required to aid the industry to bring about thechallenges posed in Accelerating Change and Respect for People and by emergingnew technologies.

Tacklingthese issues and achieving the targets will require tremendous commitment fromclients and all in the supply chain. Sohow do we start? Firstly, we need toacknowledge that there is much good work going on already. This can be seen by looking at yourconference programme. And this isprobably just the tip of the iceberg.One of the roles of a Sector Skills Council is to act as a focus forthis best practice and as a means to disseminate it extensively. This must involve working with yourselves toprovide the support and training needed to ensure the widest possibleimplementation.

Letslook closer at the first of the three challenges that of recruiting asufficient number of people into the industry who have the right mix ofskills. You may remember seeing in theconstruction press last year especially during National Construction Week inOctober - reference to our latest wave of advertising. It was intended to give an upbeat messageto young people about the construction industry. It used the best of 2001s ads and some new images. These appeared in youth orientated magazinesand as banner advertisements on websites.The good news is that we saw a 30% increase in the number of youngpeople expressing an interest in joining the industry at all levels. But there were also some real concerns.Firstly, we are still trying to find employers to take on some of these youngpeople as apprentices. It will onlytake one year of disappointment for keen young people and frustration forcareers advisers to undo the hard work of the past few years and risk a fall inapplications next year. So, we need towork together to persuade more employers to take part in training. One excitingdevelopment on the horizon, to which I am personally committed, is thedevelopment of a construction GCSE due to be available from September2004. Now that we have the go-ahead toproceed, we will be looking to your experience and expertise to help us inproviding a qualification which appeals to young people and is respected bytheir teachers and parents, as well as being seen as valuable by the industry.

Inmy report Constructing the Team, nearly nine years ago, I drew attention tothe fact that women and ethnic minorities were seriously under-represented inthe construction industry. There is aclear business case for the industry to diversify its workforce. It is not only a moral and ethical issue ofequal opportunities, though it is most certainly that. It is also common sense, especially for anindustry which has significant skill problems and continual recruitmentrequirements. Despite it making goodsense, not everybody in the industry either accepts that or is doing anythingabout it. We all need to repeat themessage as often as possible in articles or speeches at conferences such asthis, but practical examples are always better than words. I attach great importance to much morediversity in the industry, as a core objective of the Board. We need a construction industry which looksmore like Britain, and Britain is not all male and white. That is why CITB has placed substantialweight upon its diversity strategy as part of its 2002-2006 Business Plan. It has introduced a rolling programme ofdiversity training for all staff, appropriate to their specific roles, alongwith equal opportunities monitoring of personnel. That is the first step of walking the talk. CITB has also settargets for women, black and Asian people for new entrant starts. The achievement of these targets is linkedto a general programme of benchmarking which can lead to the payment of bonusesto all CITB staff if targets are achieved.We have also set specific targets to try and encourage a wider age rangeof women and black and Asian people into the industry. Each CITB Area Office is joining ordeveloping Local Collaborative Partnership projects, now known as Step intoConstruction, in their area or part of the United Kingdom. You can find out more about these from yourlocal CITB Area office or Di Barber, one of our Equal Opportunities Advisers.We cannot afford to ignore or marginalise 50% of the population in ourrecruitment policy. In putting togetherthe elements of this talk I was pleased to hear from CITB staff of the goodpractice which exists within your own colleges and the work that we are alreadydoing in partnership to encourage a more diverse entry into the industry. I have also seen it at colleges which I havevisited. This must continue and indeedincrease.

Wehave still a very long way to go to reach out to huge sections of ourpopulation who have seen little to encourage them to join our industry. All of our good intentions will beineffective if we cannot outreach to the small companies which form 99% of theconstruction industry and get them involved in our joint agenda. They do not have Corporate Affairs Directorsor Human Resource Managers, with the time, staff or training to read voluminousdocuments or brochures. The boss has todo the reading himself or herself, perhaps over the breakfast table beforegetting onto site to undertake a job which would be unthinkably small to largebuilding companies like mine but which is vital to the householder or smallshopkeeper client. It is our job to try and communicate vital information tothese small companies in a customer friendly way. It is never the customers fault if he or she does not understandour marketing or business message. Itis always our fault. We have to tailorour message to them, not vice versa. Weneed to ensure that we speak to people in a language to which they can relate.This is whether we are talking to them about supporting the training of newentrants or the upskilling of themselves and their workforce. Through its Advisory Teams and TrainingGroups, CITB is already engaged with many of these companies, although it isstill only a small percentage of the overall number. Recognising that many of them are specialist contractors, we arein the process of appointing a strong specialist team headed by AlistairCollin. Over the past two years CITBhas been working with Federations, professional bodies, yourselves as educationand training providers, Rethinking Construction and the Construction BestPractice Programme to develop a programme of management and supervisory coursesand workshops which are seen to meet particular needs. It has ring-fenced 1.5million pounds a yearto support this initiative and this will continue to be available to supportexisting programmes and develop others as the need is identified.

EarlierI referred to influence as being the single word which differentiates thenewly emerging Sector Skills Councils from the NTOs. As we put together our full submission to become an SSC to the Sector Skills Development Agency,where do we see the need to exert that influence in order to improve theskills, productivity and competitiveness of the construction industry? We are currently involved in contributing tothe work being carried out by QCA, SSDA and the LSC on a review of nationaloccupational standards and vocational qualifications. Our aim is to move towards a qualifications structure which,whilst not losing its rigour, exhibits a sense of pragmatism, bearing in mindthe delivery issues. We have, albeitbelatedly, become involved, at the invitation of DfES and LSC, in the developmentof the network of Construction Centres of Vocational Excellence. The network is set to double over the nextcouple of years and we need to work with yourselves to ensure proper coverageof regional and specialist needs. Thereare regular meetings with the CoVE team from DfES and LSC, along with CliveWeston, Head of Department, from the pathfinder CoVE at Accrington andRossendale College, who convenes the construction network. One of the first projects of the network isworking with CITB to produce teaching schemes for the Technical Certificate. To use SSDA speak, this is an excellentexample of a results orientated partnership.We are also involved with the work of the DfES Standards Unit, set up aspart of last years Success for All white paper. Meetings are being held with Mike Fisher, heading up theConstruction Unit, to see how we might assist in taking the work forward. We share a concern over the poor completionrate for Modern Apprenticeship frameworks and we will be doing all we can toinfluence the work of the Task Force in providing a fit for purposeframework, moving away from the one size fits all approach. I am sure that there are many other areaswhere we should be looking to exert our influence jointly to Government and itsagencies. CITB is more than happy todiscuss these with you.

If we are tomake a difference rather than talk about it then we have to increase ourinfluence. And how do we go aboutthat? We need to be able to make thecase. Do we have the evidence and clearvision to do that? We need to speakwith a single voice and accept that, in order to achieve our goal, we may haveto make some painful decisions on the way.We need to be more upbeat about the challenges and job satisfactionoffered by this unique industry the worst messages are often those which wegive ourselves. And we need to knowthat we cant do it on our own. The keyto this is genuine and active collaboration amongst all the main stakeholders. Much has already been done, but there ismuch to do. I look forward through therelationships developing as part of the Sector Skills Network to workingclosely with you to achieve the best for the industry and hence for the UK as awhole.

But above all,lets be proud of our industry. I havebeen involved in it in many capacities since 1967. It saddens me to see how little the industry sings its ownpraises, when all around us, including here in Cardiff, we can see magnificentexamples of construction, well designed and well built, which will last formuch longer than those who created them.At your colleges and on sites are the young people whose skills willlead the industry in 20 years time. Itwill not be the same industry, just as 2003 is different from 1983, let alone1963. But it will still be building,with new techniques, new challenges, new materials, new firms and new methodsof delivery. Young people are coming toyour colleges now who believe there is a worthwhile career ahead of them in agreat industry turning over 60 billion a year. We need to ensure that it is a well trained and upskilledindustry, a safe industry, a diverse industry which shows respect for peopleand which delivers satisfaction to the client, whether that client be Mrs Jonesof 21 High Street, the Highways Agency, Cardiff Council, or a massivesupermarket chain. It is an industrywhich works in every constituency, virtually in every local authority ward, andwhich commands the attention of even the most casual passer-by as they walkpast a site. A heavy responsibilityrests on us all to meet expectations all of us, whether construction firmemployers like mine, CITB as managing agent and trainer, yourselves as trainingproviders, and trade unions and the existing workforce to help and guide newentrants both on and off site. We haveto do these things because the workforce is the industry. The clients, the designers, the engineers,the cost consultants, the management contractors, the surveyors, the buyers,the materials manufacturers, the specialist contractors, the trainers and educators all of them have a vital role to play, as do others. But at the end of the day it is theoperatives on site who carry through the project, and the project is what it isall about. Quite simply, this is theindustry which has built, is building, and will always build Britain.