SPEECH BY SIR MICHAEL LATHAM, DL, CHAIRMAN, CITB,
AND DEPUTY CHAIRMAN, WILLMOTT DIXON LTD,
TO THE CIVIL ENGINEERING CONTRACTORS ASSOCIATION,
NEWCASTLE-UPON-TYNE
25 MARCH 2003
It is a great privilege to bewith you here today, particularly as CITB has long enjoyed a successfulpartnership with CECA. I was invited by your North East Director and SecretaryDouglas Kell to speak in August last year and must admit, am surprised although delighted that he has asked me back a few months later!
What I hope to share with you today are some thoughtsabout CITBs Skills Agenda and how we are working with industry to achieve ourcommon goal namely sufficient numbers of people trained and qualified in theskills needed for a world-class construction industry.
To make thatgoal easier to achieve, CITB has been working with employers and stakeholdersfrom across the sector to identify the challenges facing the industry over thenext five years. The outcome is summarised in a workforce development plan. Init we identify the three key challenges we face in ensuring we have enoughpeople with the right skills to carry our industry into the future. These haveformed the basis of our Business Plan, which looks five years ahead.
The first isimage and recruitment. With a growing industry and an ageing workforce,recruiting larger number of school leavers and mature job changers needs to beamongst our key priorities. And its not just about recruiting more people wehave to recruit more high quality people.
The second keychallenge is inextricably linked with the demanding targets set out in theAccelerating Change report for achieving a fully qualified workforce by 2010.These targets are being refined and taken further by the Strategic Forum but weestimate this means approximately half a million people need to achieve avocational qualification at level 2 between now and 2010.
The thirdchallenge is to improve business performance. Evidence shows that only aminority of companies attach importance to proper investment in training as ameans of improving business performance and a very small percentage ofconstruction companies are recognised as Investors in People. A substantialprogramme of skills investment isrequired to aid the industry to bring about the changes proposed in theAccelerating Change and Respect forPeople reports.
Tackling theseissues and achieving the targets will require tremendous commitment fromclients and all in the supply chain. So how do we start? Firstly, we need toacknowledge that there is much good work going on already. In particular, Iknow some of the industrys most innovative and successful initiatives arehappening in the North East, such as the recently established North EastRegional Skills Forum, which brings the industry together on the very issue ofskills.
Lets lookcloser at the first key challenge recruiting the right people with the rightskills our industry needs. I want to start by putting my comments in contextwith the current situation in the North East.
2002s regionalWorkforce Development Plan clearly indicates how important construction is tothe North East. It turns over 2.9 billion a year or 8% of regional grossdomestic product. And according to the recently published Northern EconomicResearch Units 2002 Snapshot, there are around 5,200 construction businessesin the North East employing approximately 79,000 people, of whom 14,000 areself-employed.
Clearly construction is a verymajor player up here. It is absolutely right that we should be using thismeeting today to discuss further action and commitment, especially as the nextfour years, up to the end of 2006, are likely to show further annual growth inthe industrys output in the region of 2%.That in itself will put pressure on the industry for morerecruitment. The fact that one-third ofthe North Easts construction workforce is over the age of 45 should also beringing some alarm bells. As with the rest of the UK, the North East needs tobe taking action to ensure it has a young, dynamic and skilled workforce formany years into the future.
Many people think that CITB isall about craft skills training and, in particular, about training of youngpeople. But we also produce a number ofthe industrys key reports into skills shortages and gaps each year. The figures in those reports become widelyquoted and well-known.
Basically, we need 300,000 new people coming intothe industry over the next four years or about 76,000 a year of which 2,500will be in the North-East - if we are to meet the challenges which theGovernment have rightly set us to build more schools, hospitals and housing,and to up-grade our transport. But itis not enough just to replace those 65,000 who retire or otherwise leave theindustry each year. 11,000 of the76,000 who are needed each year will be additional new entrants. That is notgoing to be easy to achieve year on year.
You may remember seeing one or more of our PositiveImage ads or reference to the campaign, in the construction trade, or evennational press, especially during National Construction Week in October lastyear. We launch new ads each year as part of the ongoing campaign to appeal toyoung people. The ads appear in youth orientated magazines and websites and aredesigned to play on the interests of young people namely, sport, music,money, socialising and travel. Surveyshave shown that the target audience, young people, are impressed by the adcampaign and it improved significantly their attitude towards the industry.
In 2002, we had a 10% increase in the number ofyoung people applying for a place on our Managing Agency Modern Apprenticeshipscheme. Many more applied direct to employers. And this brings me to one of themost important points I want to stress today: we need your help, the help ofall employers with this. We cant offer a young person a place on anapprenticeship scheme if they dont have a job offer from a local employer. Icant stress enough that we do have the young people well over 30,000 applyin the UK each year and many are applying as early as January for a place in anapprenticeship scheme to start in September. We need you to commit to taking onapprentices and to commit to doing this earlier in the cycle. CITB understandsthe financial commitment involved in taking on an apprentice and this is whythere are grants available.
But aside from ad campaigns, we are involved inrecruitment, education and careers work all the year round. We have 120Curriculum Centres, with employers, schools, colleges and education businesslink organisations heavily involved, to try to get the message over to youngpeople. And one exciting development on the horizon, to which I am personallycommitted, is the development of a construction GCSE due to be available fromSeptember next year. Now that we have the go-ahead to proceed, we will belooking to the industry and to educationalists to help us in providing aqualification which appeals to young people and is respected by their teachersand parents, as well as being seen as valuable by the industry.
In my report Constructing the Team, nearly nineyears ago, I drew attention to the fact that women and ethnic minorities wereseriously under-represented in the construction industry. There is a clear business case for theindustry to diversify its workforce. Itis not only a moral and ethical issue of equal opportunities, though it is mostcertainly that. It is also commonsense, especially for an industry which has significant skill problems andcontinual recruitment requirements. 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. CITB has also set targets forwomen, black and Asian people for new entrant starts. We cant afford to ignoremore than 50% of the population in our recruitment policy. Each CITB areaoffice is developing local collaborative projects known as Step intoConstruction in their area. You can find out more by speaking to CITBs NorthEast office.
My next point concerns the quality of the newrecruits the industry takes on. A strategic priority for the CITB is to attractnot only greater numbers of young people, but greater numbers of high-qualityyoung people. And this means our industry is competing against finance, IT, lawand all the other sectors which bright young people consider. We certainly donot want our industry to be seen as a last resort option for youngpeople. Some employers say that young people do not seem to have thelevel of skills on completion of their apprenticeships that past generationshave had. However, it is not just up to colleges to ensure entrants to theindustry are suitably skilled. We all bear responsibility for passing ourskills and knowledge onto our future workforce, regardless of whether we areworking in a craft, technical or managerial capacity. The time at which youtake on an apprentice can make a difference. The brightest and most motivatedschool leavers generally dont wait until August to start thinking about theirfirst career move. Many are applying at the very beginning of the year. If youare unable to commit to taking them on until September or October, good qualitypotential recruits may have given up by then and moved into another direction,and often this is another industrys gain and constructions loss.
Qualifying our current workforce is also just asmuch of an issue as qualifying our future workforce. It forms the basis of our second key challenge. Clients, theGovernment and the industry Federations are pushing for an all-qualifiedworkforce, certainly by 2010 and possibly earlier. Will we achieve this? I hopeso and we must work flat out to achieve it. The CTA plant operators schemeannounced its amalgamation into CSCS, industrys umbrella qualification scheme,last month. The new scheme will be known as CPCS the Construction PlantCompetence Scheme. I know that the CTA changes affect civil engineeringcontracting. While CPCS will come intoeffect for new entrants from 1 July 2003, existing CTA cardholders will have theircards changed in the second half of this year, with the scheme becoming validon 1 January 2004. Existing cardholders will automatically be sent new CPCScards and logbooks at no extra cost to you as employers or the cardholders. Asa result of CPCS, 500 000 people are now qualified which is very encouraging.
This is where OSAT comes in. It is a major industryinitiative to get workers qualified without them even needing to leave theirsites. There has been a tremendous increase in demand over the last year forCSCS certification, putting great pressure on our hardworking records staff atBircham Newton. We are forging aheadwith registering the workforce but we are behind our target for achieving NVQsand SVQs through OSAT. CITB will shortly announce a pilot scheme with theLearning and Skills Council to deliver OSAT via 10 new networks around thecountry. The pilot scheme will aim to qualify 10,000 people by the middle ofnext year. We then hope that OSAT will be rolled out further so that we can trainand assess far greater numbers over the next five years.
One of the OSAT networks will be based in the NorthEast and will work with 10 training providers to start. Some workers,particularly older ones, may view the tests as a lack of faith on the part ofCITB in their abilities. So I want to stress that CITB absolutely respects theexperience and expertise of your workers.But major clients, including government, are increasingly insisting onworking with qualified contractors only.So you will have to be in the position of being able to prove your workforce is skilled. OSAT isabout making this process as painless as possible. I hope we can promote it in such a way that it encourages aculture of training in your organisations and focuses on the benefits toworkers.
While trainingtradesmen and women is a key focus of CSCS, our goal is to give everyoneworking in construction the opportunity to engage in lifelong learning. Overthe past two years CITB has been working with Federations, professionalbodies, education and trainingproviders, Rethinking Construction and the Construction Best Practice Programmeto develop a programme of management and supervisory courses and workshops tomeet the needs of experienced construction managers and supervisors. 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.
I cant speak about qualifying the workforce withoutmentioning health and safety. Thisshould be at the top of everyones agenda in construction. Training is vital, but so ismeasurement. The computer based Health& Safety Test, as part of the CSCS card, is very important, and I am gladthat we have also been able to introduce the mobile test centres. It isnt easy. People are expected to revise and study for the test, just asthey have to do nowadays for the theory part of the driving test. About 13% who take the test fail it, so itisnt a doddle. Nor is it a substitutefor good training.
The industrys death and injury rates have improvedover the past 18 months, although this has followed a sudden increase in thenumber in accidents on site in 2000. Weare still behind where we would be, had the downward trend we were experiencingin the 90s continued. Obviously, we all want to work on zero-accident sites andthat must be our determined objective.We absolutely owe it to our workers and their families to provide safesites. But there is also a strong businesscase for doing so. With safer, cleaner sites and a fully qualified workforce,the industry is in that much better a position to attract new blood. It is afact that many young people list not wanting to work in dangerous and dirtyenvironments as a motivation for choosing to work in other industries. And whywouldnt they? Especially if they have key influencers, such as parents,teachers and careers advisors telling them our industry is hazardous to theirhealth.
At the heart of training provision, and indeed allpolicy based upon it, is the need for employers to understand that training isnot a cost. It is an essentialrequirement of an efficient business.Of course, it does cost, but so do labour, plant, materials andall the basic requirements of a construction business. Just as no builder or civil engineeringcontractor can get any project completed without materials and necessaryequipment or plant, so he or she needs skilled work people to deliver it. And he or she can either train them or canleave it to someone else to do so, as all too many do. But with the increasing demand for qualifiedoperatives, those contractors or sub-contractors who prefer to leave it tosomeone else may find someone else is now employing or retaining the mostskilled site craftsmen, which will then affect their ability to get any work inthe first place. CITB will always seetraining as an essential part of any competent companys business plan.
And this brings me to challenge number three:Improving the performance of the industry. A key target for CITB is to see asignificant increase in the number of construction companies registered asInvestors in People. This is also why CITB has rolled out the Training Planinitiative, which invites employers to move away from box ticking to givingreal thought and involvement to how their company allocates resources totraining. In that regard, I havestressed many times in the year that I have been Chair of CITB that we must doall we can to outreach to small and medium sized companies. Most CITB firms in scope are small or verysmall. Although the North East has a slightly higher percentage of medium-largefirms than other regions, we all know that firms with 10 or less employees makeup the vast majority of the industry (and 85% of firms in the North East.)
The boss of a small firm is usually on site, or outlooking for more work. He or shedoesnt have a Corporate Affairs Director, a Human Resources Manager, or aDirector of Training, which large building companies like mine do have. So we try to take care with our literatureand advice at CITB that it is simple, direct, eye-catching and brief anddoesnt end up thrown in the bin, along with the junk mail. Not nearly enough small employers are awarethat they are entitled to financial assistance in the form of grants from CITBwhen they train new or existing staff and thats a message we have to commitmore resources to getting out there.
I am making it my job to talk as much as possible toFederations and Associations representing firms of all sizes and, inparticular, the small and medium sized ones because I want their employers toclaim more grant. More grants mean moreindustry training and that can only be a good thing.
If we are to make a difference rather than talkabout it then we have to increase our influence. I particularly look forward toCITB becoming a Sector Skills Council because I believe that influence is thesingle word differentiating the newly emerging Sector Skills Councils from theNTOs. Since entering the development phase following submission of ourExpression of Interest last year, our comprehensive 18-month business plan isbeing worked up before we discuss it with the Sector Skills Development Agencynext month. Once they have considered our proposal, we are hopeful theSecretary of State will issue a five-year licence later this year.
Being a Sector Skills Council will provide us with astronger voice for the employers we represent and place us in a better positionto influence key stakeholders, namely government, key clients and opinionmakers. It will also give us greater access to work which the government andthe Learning and Skills Council are doing on key initiatives, such as a reviewof national occupational standards and vocational qualifications. Our aim is tomove towards a qualifications structure which, whilst not losing its rigour,exhibits a sense of pragmatism, bearing in mind the delivery issues.
So I want to conclude by asking for your support forour key initiatives in the North East, including the take-up of Investors inPeople status and the Training Plan route and we have secured European SocialFunding for both. Continued collaborative working between employers, the CITBand the LSC in the North East has also produced some good results. But there is always more we can be doing.Id also ask you to think about whether or not your workforce is fullyqualified and whether your workplace could benefit from our OSAT pilotprogramme. And please dont forget about those young people. We are doing lotsto encourage them to consider a construction career but we need you to givethem a job, support their training, pass on your expertise and provide safe andrespectful environments that offer them the opportunity to continue learningand developing as workers. Only when we can offer young people all this, willthey want to join us in our great industry, that has literally built, andcontinues to build, Britain.