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Construction Industry Training Board (CITB) Annual Report and Accounts 2013

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Construction Industry Training Board (CITB) Annual Report and Accounts 2013 citb.co.uk Construction Industry Training Board (CITB) Annual Report and Accounts 2013 Ensuring the construction industry has the right skills in the right place at the right time Construction Industry Training Board (CITB) Annual Report and Accounts 2013 Presented to Parliament pursuant to s8 (4) of the Industrial Training Act 1982. Ordered by the House of Commons to be printed 30 June 2014. HC 101 © Construction Industry Training Board 2014 The text in this document (excluding the Royal Arms and other departmental or agency logos) may be reproduced free of charge in any format or medium provided it is reproduced accurately and not in a misleading context. The material must be acknowledged as CITB copyright and the document title specified. Where third party material has been identified, permission from the respective copyright holder must be sought. Any enquiries related to this publication should be sent to us at: CITB Corporate Governance, Bircham Newton, King’s Lynn, Norfolk, PE31 6RH. Tel: 0344 994 4400 citb.co.uk/contact-us/contact-us-form Print ISBN: 9781474104715 Web ISBN: 9781474104722 Printed in the UK for the Williams Lea Group on behalf of the Controller of Her Majesty’s Stationery Office. ID 20051411 06/14 Printed on paper containing 75% recycled fibre content minimum. Contents Contents Introduction Foreword 3 The business and economic environment 4 Corporate performance 2013 7 Public benefit 9 Looking after information 9 Corporate responsibility 10 Business activities What we do and where we do it 13 CITB in England 14 CITB in Scotland 17 CITB in Wales 19 CITB yng Nghymru 21 Annual Accounts CITB Trustees 24 Financial Report 25 Industry skills challenges 28 Balance sheet 30 Remuneration Report 34 Governance Statement 37 Certificate and Report from the Comptroller and Auditor General 43 Financial Statements 45 Statistical information Statistical information for the year ended 31 December 2013 68 Appendices Appendix A: Membership of the Board and its committees 72 Appendix B: Register of interests of Board members 74 Appendix C: Employer organisations 76 Appendix D: CITB statutory basis 77 Appendix E: Location of CITB Offices and National Construction College (NCC) centres 80 Appendix F: Glossary 82 citb.co.uk Introduction Foreword ‘Transition’ is a word that is overused and all too For example: Government’s response to the often under-delivered on. But it’s a word that belongs Richards Review, the capacity required to respond at the forefront of CITB’s thinking and has already to investment in infrastructure and housing and, of characterised significant aspects of the last year. course, the impending skills shortage in the sector It is not a word that we intend to either overuse or as economic recovery quickens. to under-deliver on. At CITB, we have started a vital period of transition The last twelve months have been all about so that we are able to lead, respond to and deliver preparing for our next fifty years, while marking on the new landscape. Our structure will allow for the successes of the last fifty. We have seen the a more responsive and delivery-focused approach; departure of Mark Farrar, to whom we offer many our new executive leadership will drive this change thanks for his efforts and commitment, and the through the organisation and our revitalised arrival of a new Chief Executive, Adrian Belton, with governance will ensure that CITB sets a course sterling work from William Burton in the meantime. in keeping with modern, professional, delivery- We have been working with a focus on governance, orientated businesses. the make-up and responsibilities of the Board and, Transition is often difficult but worthwhile change is of course, on the Triennial Review, one of the most rarely easy and we are determined that the work we significant in our recent history. All this change is to started last year will be completed and embedded. deliver the transition from CITB at fifty to CITB of the Our Levy payers deserve it, our employers require future – an organisation that prides itself on being it and our status as a Levy-by-statute organisation ahead of thinking on training and skills, leading the demands it. industry in its areas of competence and attuned to The last year has been about beginning the work its Levy payers. of changing CITB and the next twelve months will One particular sign of this is the determination to be about securing those changes and ensuring that return more of the Levy to employers so that, as the the transition from fiftieth birthday to future-facing economic upturn gains momentum, the sector is training provider is complete. skilled up and fit for purpose with employers feeling the real benefits of a properly trained workforce. James Wates This is always important of course, but as the industry transitions from the burden of recession to Chairman the opportunity of growth we need to engage with, and deliver on, some very specific issues. 3 Introduction The business and economic environment Industry profile New orders have largely stabilised during 2013 At the end of 2012, it still seemed that the road to (but remain well below pre-recession levels) and sustained recovery for the UK economy as a whole, figures released in January 2014 by construction and the construction industry in particular, was a industry analysts Glenigan reveal that the value of long way off. However, since the second quarter of UK projects put on hold during 2013 was the lowest 2013, growth has accelerated strongly and indicates since the start of the recession in 2008. However, that the outturn for the year as a whole is likely to CITB’s recent Employer Panel research (September have been much better than most analysts had 2013) revealed that the key business challenge anticipated. 2013 now looks as if it will show a small for employers remains the need for higher sales, plus for construction output rather than the minus a factor mentioned spontaneously by two in five many forecasters had predicted at the beginning of construction firms (43%). This is a fall compared the year when (in the opening three months) output with the previous five waves of research conducted was at its lowest level since the end of 1998. since February 2009, when around half mentioned this issue, but remains well above the period A significant boost for the economy seems to have 2005–2008, when around 20%–30% of employers been the consumer confidence engendered by the typically mentioned the need to increase sales. Government’s Help to Buy scheme, which has kick-started the housing market quite substantially. Several other results from CITB’s Employer Panel There is little doubt that the scheme provided a research point to continuing tough economic major boon, not only to the private house building conditions but there are some signs of these easing. sector but also to the economy as a whole. A third of firms saw their turnover fall in the previous However, there are fears that the recovery is being twelve months (33%), compared with 26% saying it fuelled largely by consumer spending growth – had increased. This picture is more positive than in despite a continuing decline in real household 2011 and 2012, when almost half said turnover had disposable incomes – with business investment, decreased in the previous 12 months. However, the especially in the SME sector, still muted. signs of recovery are most apparent in larger firms and over two-fifths of employers with more than This suggests that consumers are reaching into 100 staff have reported higher turnover over the savings and/or increasing debt to drive spending; last 12 months (43%). this will not be a sustainable trend unless real disposable incomes start to expand again. Indeed, Also, the rate at which the construction workforce continuing pressure on wages and job uncertainties is decreasing has slowed: only 1% fewer direct presents a serious threat to growth, both in terms of employees and 11% fewer labour-only sub- demand and supply. contractors were reported compared with the number employed 12 months ago. Previous waves The Construction Products Association reports of research have seen far greater annual reductions: that rising costs are becoming a key issue for for direct employees, the reduction in November the industry. With activity starting to recover, cost 2009 was 15%, in August 2010 and 2011 it was pressures have increased. While mainly driven by 8%, and in 2012 it was 5%. energy and fuel costs, wages and salaries are putting an increasing pressure on costs. As a result, building Encouragingly, half of all companies (49%) feel that contractors reported that tender prices rose during the worst of the recession is over, a sharp rise in Q3 of 2013: the first rise in four years. However, the optimism compared with the previous two waves of impacts of labour and material cost rises have put research, when only 13% of employers felt that the pressure on profit margins. worst of the downturn was over. The Construction Products Association also Of course there are concerns for the future, but a continues to report widespread problems of late positive end to 2013 points towards brighter times payment, which remained the single most important ahead. The mood is perhaps best described as one adverse effect on contractors’ businesses. The of cautious optimism. impact of reduced cashflow is that many firms are unable to invest in future growth, and remain at risk of insolvency. 4 Introduction Workforce profile All regions are expected to see employment growth Construction employment now stands at about except the West Midlands, where output growth 1.72m people, or 2.44m if the wider supply chain of of just 0.8% a year on average is not enough to building professional and mechanical and electrical drive expansion of employment, given anticipated M&E services are included.
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