One million NEETs aged 16-24 182,000 construction jobs to be filled by 2018 Yet just 7,280 completed a construction apprenticeship last year We have to do better No more lost generations Creating construction jobs for young people

HOUSE OF COMMONS A cross-party parliamentarians’ inquiry LONDON SW1A 0AA February 2014 2 3 Section 1 Section Contents04 Foreword 20 Section 3: By Rt Hon Nick Raynsford MP and Lord Richard How to get more young people into training Best OBE, joint chairs of the inquiry and employment 20 3.1 Analysis of the problems and solutions 06 Executive summary 22 3.2 Strengthening leadership in construction 05 Members of the commission 24 3.3 Using public-sector contracts to 2 Section boost employment for young people

07 About the inquiry 27 3.4 Attracting the best talent 31 3.5 Improving apprenticeship experience 08 Section 1: 32 3.6 Matching skills and training with The emerging skills gap changing industry need 33 3.7 Making it easier to employ and train

08 Section 2: young people 3 Section Structural barriers to training and employment of young people 34 Section 4: 12 2.1 Structure and culture of the industry How organisations are getting young people 13 2.2 Routes into construction as a career into training and work 15 2.3 Training and funding for training 16 2.4 How funding structures might 39 Section 5:

change – the Richard Review reforms Recommendations 4 Section 18 2.5 Traineeships 42 Acknowledgments We would like to thank all of those who contributed and helped inform this inquiry, including the many witnesses who gave oral evidence and the List of those who provided submissions, gave organisations and individuals that provided written submissions. There is a full evidence and offered advice list at the back of the report. Production of this report was supported by the Chartered Institute of Building and the Construction Industry Training Board. Section 5 Section

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By Rt Hon Nick Raynsford MP Forewordand Lord Richard Best OBE, joint chairs of the inquiry his report summarises the work, findings and recommendations of our inquiry into one of the most important challenges of T our time. That is: how to make better use of the massive opportunities We cannot tolerate continuing presented by our country’s very substantial construction programme, worth £100bn-plus mass unemployment among young a year, to secure training and work for the unacceptably large number of young people in people in Britain, when there is Britain currently neither in employment nor Rt Hon Nick Raynsford MP Lord Richard Best OBE education and training. As the construction such scope for increasing training, industry recovers from recession, we ought conclusions. On the contrary, it demonstrated to see a significant growth in training and clearly that we already possess the necessary apprenticeships and employment employment opportunities for young people. ideas, enthusiasm and expertise to make Instead we hear increasingly dire warnings of transformational changes in how we link in our construction industry looming skill shortages, amid expectations employment opportunities in construction drop-out rate from apprenticeships and other that vacancies are most likely to be filled by with the pool of unemployed young people in training courses. We have to use the levers migrants from other European countries. need of training and work. available through public-sector procurement and the planning system to require of The five parliamentarians who conducted There are many inspired initiatives already employers both realistic and effective training this inquiry all share the same conviction under way in various parts of the country. and employment commitments. We need to that it is simply unacceptable to allow this But, sadly, their limited scale and geographical secure much greater commitment and buy-in pattern to be repeated. We cannot tolerate coverage mean they can have only a limited from industry leaders to implementing the continuing mass unemployment among effect on the number of young people being step change that is needed in the numbers young people in Britain, when there is such helped into work. The challenge, we believe, is of youngsters helped to secure worthwhile scope for increasing training, apprenticeships to build on the experience of what is working employment in construction. and employment in our construction and to scale this up to the point where it is industry. The inquiry set out to identify and making a real impact on the problem of youth No one has any doubt that at its best the examine the barriers standing in the way of unemployment. British construction industry is world- the common-sense outcome we want to see class. The huge success of the 2012 London – namely, a step change in both the quantity There is no single magic bullet: a number Olympics provided a high-profile showcase and quality of training and a consequent of different strategies will be required. for the industry, which not only delivered all expansion in employment opportunities We have to improve an understanding in the stadiums and sites on time and in budget, for young people seeking work in one of schools of the hugely exciting and varied but did so without any construction fatalities our country’s largest and most important opportunities available for those who want – the first time this had been achieved in any industries. to make a career in construction. The range comparable international event. We hope that is enormous: from traditional craft skills, this report will help motivate Government We took evidence from a variety of different through a range of organisational, logistics and industry leaders to aspire to match that organisation and individuals with a wealth and management roles, to sophisticated performance in training and employment of experience in construction and training. design and IT opportunities. We have to make for the industry. We are some way from that Members of the commission We are very grateful to all those who took the it easier for youngsters to find an appropriate target at present, but it is not unattainable. Rt Hon Nick Raynsford MP (Labour) (joint chair) time and trouble to give us the benefit of their route into the industry, whether through With political will and commitment across Lord Richard Best OBE (Independent) (joint chair) expertise and their ideas. While inevitably apprenticeships or degree-level qualifications. the industry, we can raise the bar and Peter Aldous MP (Conservative) this evidence exposed many of the difficulties We need to ensure that training programmes deliver much better opportunities for our Annette Brooke MP (Liberal Democrat) and obstacles that currently prevent us from are better linked to the nature of the jobs that unemployed youngsters, and stop them Baroness Angela Smith MP (Labour) doing better, it did not lead us to pessimistic are likely to be available and to reduce the becoming another lost generation. Denise Chevin (commission secretary and report author) 6 No more lost generations:creating construction jobs for young people 7

About the inquiry With the support of the Chartered Institute of Building and the Executive Construction Industry Training Board, the Rt Hon ● summaryhe purpose of this inquiry was a whole. Only about 10% of those working in the We have to use the levers available through create more opportunities by mandating an Nick Raynsford twofold: to investigate the barriers industry are aged between 19 and 24, with 1-2% public-sector procurement and the planning appropriate and effective level of training and MP and Lord to training and employment of our aged between 16 and 18. system to require realistic and effective employment of young people through planning Richard Best jointly young people in the construction training and employment commitments from obligations and then ensuring the requirements chaired a group of T industry; and to find ways to ensure Our view is that we must capitalise on the upturn employers. But raising aspirations will need are properly monitored. We have seen that such parliamentarians investment in the sector leaves a lasting legacy in the sector and skill up a generation of people committed support from Government, social a strategy works best when there is buy-in from comprising for our communities and creates a sustainable, who could otherwise face a bleak future. The task landlords and local authorities too. Although the very top of councils.. Peter Aldous better-skilled industry. With £100bn or more of is particularly pressing, considering that all the local authorities and social landlords are (Conservative), investment in the sector every year, we believe the major parties are looking to promote employment increasingly using these levers to push for ● Leadership from social landlords and public Annette Brooke (Liberal Democrat) industry has the capacity to do more to train and as an alternative to benefits for those under 25. training, success is patchy. bodies: We regret obligations from the HCA and Baroness employ young people. have been dropped but we believe it is vital Angela Smith ● Encouragingly, during our inquiry we came across We need to secure much greater that organisations like housing associations (Labour) to look into The structure and culture of the industry – many construction firms and individuals who commitment and buy-in from industry leaders and councils should routinely leverage their how construction in which nearly four in 10 of the two million were passionate about providing good career in securing the step change that is needed investment in construction work in order investment could be workforce are self-employed – and the pathways to young people and were prepared to help young people secure worthwhile to set out appropriate and realistic demands used to generate uncertainty over workload have produced a to overcome the hurdles this may involve. We employment in construction, and in doing for training and employment opportunities more training and situation wherein training of local people has given highlight some of these initiatives in the report. so lay the foundations for a sustainable and for young people as part of the procurement jobs for young way to a reliance on migrant labour, particularly modern industry. process. Again, it is vital this is in partnership people. The inquiry from eastern Europe. But we need the pace of cultural change to pick with their contractors and properly enforced. was also supported up if we are to avoid more “lost generations” in by the Construction Youth Trust, the The downturn in the economy had a devastating the construction industry, as it turns to migrant Specific actions we would like to see to bring ● A step change in careers advice: The quality Youth Build Trust, effect on construction, with 400,000 job workers to cope with growth. The engineering about some of these improvements include: and standards of career advice must be made to Youth Build UK, ● losses and one of the highest redundancy rates sector has already begun a push to get 100,000 A training summit: The Construction attract a wider breadth of young people to work and the Prince’s of any sector. The impact was particularly new engineering technician apprentices on board Industry Training Board (CITB) and the in construction. It may be worthwhile for the Trust. Written and felt on recruitment of young people, where – some of whom will find a career in construction. Department for Business, Innovation & Skills, sector, via the Construction Industry Council oral evidence was apprenticeships have plummeted. For 2013 the Construction organisations need be to be equally with backing from the Construction Leadership and the CITB, to come together to explore obtained from a number of construction apprentices completing ambitious. Council, should convene a high-level summit whether a comprehensive careers service – or at wide range of those their apprenticeship in England fell to just 7,280, with contractors and specialist contractors the very least a careers portal for construction in the construction half the figure for 2008/09, while employment and house-builders, local authorities and – could be established to provide a gateway into industry and from There is no single solution. A number of different forecasts show that more than 182,000 social landlords to get momentum behind the built environment. This could encompass local government, strategies will be required: construction jobs are set to be created in the next Construction Jobs for Young People. This more imaginative career tools (an Xbox game the social housing sector four years. ● We have to improve an understanding in echoes a similar summit for industry leaders for construction, for example) to engage young and educational schools of the exciting and varied opportunities back in 2001 on the theme of safety: by raising people with the breadth of construction careers. establishments. So, as construction comes back into growth, for those who want a career in construction, from the profile of that issue, huge progress has We welcome moves by the Construction there is already the spectre of looming skills traditional crafts, to management, to computer- been made on construction sites to reduce Leadership Council to explore how a cross- The report was shortages potentially holding back house- based modelling. significantly fatalities and accidents. industry career portal might be implemented. researched and building. Meanwhile, insufficient skills in the new written by technologies increasingly being adopted by the ● We have to make it easier for young people ● A revitalised apprenticeship strategy: A The challenge, we believe, is to build on the Denise Chevin. industry (such as building information modelling) to find an appropriate route into the industry, refreshed CITB should spearhead a new experience of what is working and to scale it Support was and expertise in green construction could further whether through apprenticeships or degree-level apprenticeship strategy that would include an up to the point where it is making a real impact provided by David hamper construction growth. qualifications. overarching vision for apprenticeship training, on the problem of youth unemployment and Barnes, Marie Kirk, setting out plans to increase numbers, simplify thereby avoid lost generations in the future. Kate Myronidis and Ian Woodcroft. Yet the number of young people in the UK who ● We need to ensure that training programmes funding arrangements, and ensure qualifications Sub-editing was are not in employment, education or training are better linked to the nature of the jobs that match the changing needs of the industry. by Kate Ahira and (NEET) remains stubbornly high, at just under one are likely to be available and to reduce the drop- A full list of our recommendations are listed in section five of this report (page 39). design by million. Construction employs a lower proportion out rate from apprenticeships and other training ● Local authorities to leverage planning Mark Bergin. of younger people than does the UK economy as courses. obligations: Local authorities should help 8 No more lost generations:creating construction jobs for young people 9 Section 1 Section fter one of the worst recessions need more young people with relevant skills; for construction, planning and the built on record, the industry is at last meanwhile, many young people are in desperate environment, in England were under 14,000, showing growth. House prices are need of a job. It makes sense to marry up a fall of 33% in two years. Specifically looking rising, projects are being dusted demand with potential supply. at construction, in 2012/13 there were 13,610 A down, companies are once again apprenticeship starts in England, 50% down on beginning to recruit, and in London there is In the face of this youth employment crisis, the number for the peak of 2006/07.( Adding already talk of skills shortages possibly holding we as a group of parliamentarians have come in Scotland and Wales boosts the figures by back house building. In the latest survey from together to investigate how it could be better about 4,000) Again, the numbers completing the Royal Institution of Chartered Surveyors, tackled. What could be changed to generate their apprenticeships continue to decline, with 36% of surveyors said that labour shortages more opportunities for youth employment in construction completions in England falling

were restricting building, particularly in trades housing and construction, which is after all to just 7,280 in 2012/13 half the number for 1 8 Construction connected to the housing sector, including one of Britain’s biggest and most important 2008/09 when numbers peaked . Market Survey, bricklaying1. The picture appeared the same in industries and into which around £40bn of RICS, December 2013 earlier research from the Chartered Institute public money is invested each year? Not surprisingly, perhaps, respondents to 2 of Building (CIOB). Some 82% of construction the May 2013 CIOB skills survey blamed the Skills in the Construction professionals who took part highlighted the lack We believe it is critical that this money should industry’s overall skills shortage on the scarcity Industry, CIOB, of skilled domestic construction personnel as an leave a lasting legacy for young British people of high-quality training and investment from April 2013 3 issue2. as well as create a sustainable, better-skilled both Government and industry. Trade and Construction Skills industry that is less reliant on migrant labour. technical skills were considered the areas Network Survey, CITB, January 2014 4 More than 182,000 additional construction jobs Speed is of the essence, as the industry will be experiencing the highest demand relative to Office for will be created in the next four years, according seeking to recruit new employees as order books supply. The report warned that insufficient National Statistics, November 2013 to new research by the Construction Industry expand. skills in the new technologies increasingly 5 Training Board (CITB)3. being adopted by the industry (such as building Sector Skills Insights: The industry employs fewer young people, information modelling) and expertise in green SectionThe emerging skills gap 1: Construction, Yet in contrast, the number of out-of-work relative to its size, than does the UK economy construction could hinder construction growth. Evidence Report young people aged between 16 and 24 is at as a whole. Only about 10% of those employed 50, UK Commission historically high levels. in construction are aged between 19 and The survey found that efforts to build a for Employment & Skills, July 2012 5 6 24, while 1-2% are aged between 16 and 18 . sustainable workforce were being constrained BIS, UK In the period from September to November Yet construction is one of the UK’s largest by a lack of firms recruiting apprentices. Construction, 2013, some 920,000 young people (aged from industries, employing two million people and Although 90% of respondents said they Economic Analysis 16 to 24) in the UK were categorised as NEET with an output of over £100bn6. believed apprentices were key to filling skill of the Sector, July 2013 7 (not in education, employment or training). gaps, just 51% said they were actively recruiting Comparison of Although this is a decrease of 39,000 from the The industry also suffers from a distinct lack of apprentices. On a more positive note, the Industry Downturns, previous three-month period, it still amounts to diversity. Fewer than 2% of employees at trade research found that 72% of apprentices were Office for National one in seven young people. Of these, 55% were level are female, and women make up only 13% being offered permanent employment within Statistics, October 2013 8 seeking and available for work and therefore of the workforce overall. Ethnic minorities are their organisations beyond completion of their BIS/ Skills Funding classified as unemployed4. similarly underrepresented. apprenticeship. Agency, updated February 14, 2014. Our view is that we must capitalise on the At the crafts level, even during the last boom of Undoubtedly, construction has been through a The sharp fall in starts across recent upturn in the construction sector to the mid-2000s onwards, the number of craft period of great hardship. Around 400,000 jobs construction, ensure it benefits society as a whole, by enabling apprentices taken on was low – but in England were lost in the sector over the course of five planning and the a generation of young people now facing a bleak it has almost halved since then, as output has years. Having to make people redundant and built environment future to acquire useful employment skills. The fallen by 16% in five years from its peak in the uncertainty over workloads makes it difficult by 33% could in part 7 have something to task is particularly pressing, given that all the second quarter of 2008 . to take on and train new recruits. But as stated do with an element major political parties are looking to promote above, the industry does appear to have turned of reclassification. employment as an alternative to benefits for Across the wider built environment the a corner. According to the latest report from At the time of going those under 25. The industry will increasingly number of apprenticeship starts in 2012/13 the Office for National Statistics, construction to press BIS were looking into this 10 No more lost generations:creating construction jobs for young people 11 Section 1 Section output grew 4% between August 2012 and young people. Half of respondents added that We appreciate that we are conducting our August 2013 – the strongest growth in output more careers advice was needed to inform inquiry against a backdrop of other important since December 20119. young people about careers in the construction changes and a stream of Government initiatives industry. geared at trying to tackle the problem of youth This year (2014) Experian forecasts growth of unemployment and its causes. Some of these 4.2%, up from 1% in its summer forecast, with How can the industry equip itself with the are long-standing issues on education, such as 4.4% growth expected in 2015 – up from the skilled workers to support sustainable growth? literacy and numeracy standards and the thrust previous 2.5% forecast – before growth falls to And, even more fundamentally, will it actually of schools to push academic over vocational 2.7% in 201610. Over the three years from 2014 do so? qualifications, about which employers have to 2016, Experian forecasts total construction long complained. The setting-up of university output to rise by 7.3%, which is equivalent to an As the CIOB told us: “The construction industry technical colleges, many of which have special £8.5bn increase in output. This is slightly less contributes 7.4% towards GDP and equates to construction and engineering specialisms, is than the Construction Products Association’s around 2.04 million workforce jobs in the UK, one new initiative that is welcome14. So too revised forecast, published in January 2014, or 6.4% of all workforce jobs. Allied with the is the change for students to remain in full- which anticipates growth of 9.9% between 2014 number of young people who are unemployed, time education and training until they are 17 and 2016 – or around an £11.5bn increase11. we believe that the industry should be capable in 2014, then 18 the year after. In addition, of employing at least 75,000 to 100,000 of children aged 14 will be allowed to move to a Experian has forecast that infrastructure will be the one million 16- to 24-year-olds currently further-education college to study a vocational

the biggest growth sector over the period, rising unemployed.” programme alongside their core GCSEs. 9 Construction 24% between 2013 and 2016, with total output Output August expected to hit a record high of £16.4bn in 2016. But the outlook for this actually happening One of the most important changes is the way 2013, Office for The Chancellor, George Osborne, has pledged is not promising, according to a survey13 that funding for training will be made available. National Statistics, October 2013 £100bn worth of infrastructure investments published recently by City & Guilds, the training The Government is planning to put employers 10 UK Construction that will directly benefit the construction accreditation organisation chaired by Sir John in the driving seat in this regard, as part of Winter Forecasts, industry. Armitt. the implementation of the Richard Review’s Experian, January 2014 wide-ranging recommendations to improve 11 As well as needing to recruit for growth, the apprenticeships across all of industry15. Construction ●The City & Guilds report found that: Industry Forecasts, industry also needs to restock with skilled 61% of businesses had not offered any Construction people to replace those that are retiring. unpaid work experience in the past 12 months; Our intention in conducting this inquiry is Products Construction has an ageing workforce, with to hone in on construction-specific areas and Association, January 2014 450,000 expected to retire over the next 10 ● 42% did not currently employ apprentices; make practical suggestions that can improve 12 CITB survey, years. As mentioned earlier, the CITB research employment prospects for young people and December 2013 13 anticipates that the industry will need 182,000 ● 40% had a workforce comprising only 1% create a smoother pathway to employment. Building Futures on new recruits over the next five years. apprentices; and Construction has demonstrated itself to be a Shifting Foundations leader on the world stage – as an industry it report, City & ● Guilds, November A survey of 300 contractors by the CITB showed 56% did not plan to take on any apprentices has plenty to offer young people with differing 2013 14 that two-fifths of contractors were struggling in the next 12 months. talents and interests. A university to recruit workers with the right skills, and one technical college in 20 firms said they were at risk of collapsing This is disappointing, and particularly so as it is for students 12 aged 14 to 18, due to the lack of talent joining the industry . has become apparent during our inquiry that which specialises in In the survey, nearly one in five contractors said there is a widespread passion for training among technical studies that a skills gap had hampered their growth construction companies and clients. Many of and is sponsored by over the past two years, while one in 10 said our witnesses were on a personal crusade to a university. There are currently 50 they had lost work to competitors with a more increase training for young people. Clearly, the UTCs open or in skilled workforce. The survey also revealed challenge is how to scale up this enthusiasm. development. 15 that two-thirds of contractors thought there The Richard Review should be more incentives to help them employ of Apprenticeships, BIS, November 2012 12 No more lost generations:creating construction jobs for young people 13

means that the big contractors who win the work Technical occupations in the UK require GCSE 2.1 Structure and culture do not directly employ the skilled tradespeople qualifications or vocational equivalents, either of the industry who do the actual building. Instead these large initially or through on-the-job apprenticeship o understand the difficulty of getting firms subcontract to smaller, specialist companies, training. Graduate roles are filled by people more people trained in the sector, it is and it to these that the hiring and training of staff with foundation degrees in subjects such as necessary to reflect on the structure falls. construction management, architecture and civil and culture of the industry. engineering. T In fact, 85% of construction employment is Construction is a complex and fragmented concentrated in companies with fewer than 250 Some young people may be taken on as casual

sector, central to the UK economy. Contributing employees; SMEs account for 74% of turnover workers, but they would still need to pass a 2 Section around 7.4% to Britain’s GDP, it covers a wide in the sector19. Analysis carried out for the competency test, which is explained below. spread of activity, including design and planning, Department for Business, Innovation & Skills by While there is nothing to stop employers taking construction, civil engineering, and maintenance EC Harris20 and published alongside the Industrial on 16-year-olds, employers are often concerned and refurbishment. The sector employs Strategy for Construction has shown that for a that this could push up insurance premiums, and approximately two million workers with different typical large building project (in the £20m-£25m they can therefore be reluctant to hire such young roles and responsibilities. range) the main contractor may be directly people for jobs involving construction site work. managing around 70 subcontracts, of which a The Health & Safety Executive has produced new The industry suffered the second-highest large proportion are worth £50,000 or less. For a guidance for firms employing those aged under 18, redundancy rate of any sector in the UK during regional project, the subcontract size may be even and the Construction Leadership Council is keen the latest downturn, peaking at 32 people per smaller, and it is not uncommon for perhaps 70% to promote this to dispel the myth that under-18s 1,000 employees in the first quarter of 200916. The of subcontracts to be below £10,000 in value. cannot be employed on site. impact of the recession varied across the country. SectionStructural barriers to training2: and In London there was actually a rise of more than But as we touched upon above, the number of 5% in the number of construction jobs during the 2.2 Routes into construction young people employed is low. Recruitment employment of young people same period. Before the crash, London accounted as a career of young people by construction employers

for about 11% of construction jobs in the UK. That here are a number of different routes in any given year breaks down as follows, 16 figure is now above 14%17. Half of all construction to a career in the built environment with comparisons to proportions in the wider UK Contractors 21 Group, prepared jobs in Great Britain are now in the South (London, for 16- to 24-year-olds, and a economy : for BIS Committee, the South East, the South West and the Eastern range of occupations into which November 2012 17 region). This compares with about 45% before the T they might go. Craft industries ● 3% of employers recruited 16-year-olds into Brickonomics, December 2013 recession and about 44% back in the 1990s, when offer opportunities for employees to train and their first job straight from school 18 Skills in the UK the industry was pulling its way out of the previous gain qualifications while they work, through (compared with 4% across the whole economy); Construction recession. apprenticeships and similar training schemes. Industry, CIOB, April 2013 19 As mentioned in the introduction, the cyclical Sector Skills Insight, UK and seasonal nature of the industry makes skill Giving young people a a number of young people select a trade suitable to their Commission for shortages a frequent problem in construction. taste of construction in the work environment skills and aspirations. To date, Employment & The CIOB’s 201318 research into skills found trade, Skills, July 2102 --- prior to any hiring decision. approximately 500 young 20 technical, and construction management skills Supply Chain During 2012 the CITB Prior to and during the work people have entered this Analysis into the to be most in demand. Furthermore, the advent launched a pilot pre- experience programme, programme, and 70% of these Construction of new digital technologies and innovations in employment programme, young people were given have transferred into full-time Sector, EC Harris for sustainability and energy are likely to increase BIS, 2013 Experience Construction, support and guidance by the apprenticeship employment 21 demand for a higher level of skills. Information from: to provide a vehicle for CITB’s construction careers with the employer upon Sector Skills Insights employers unsure of making advisers and apprenticeship completion, with a minimal Construction, An aspect of the industry that restricts the an employment commitment officers to ensure they had all drop-out rate during the Evidence Report 50, July 2012,UK opportunities for skills training is the culture with the opportunity to assess the necessary information to subsequent apprenticeship. of subcontracting with long supply chains. This Commission for Employment & Skills 14 No more lost generations:creating construction jobs for young people 15

What is an apprenticeship in their work (with the assistance of a There are additional qualifications construction? grant from the CITB), funding for the aimed at demonstrating --- educational costs is provided by the competencies in specific areas. The Construction apprenticeships are Skills Funding Agency. However, this Construction Skills Certification considered to be among the most is fully funded only for those aged 16 Scheme (CSCS) covers 220 beneficial in any sector in terms of to 18, whereas those aged 19-23 are occupations, and different training quality, and most last at only 50% funded. From August 2013, qualifications (known as CSCS cards) least two years. They also pay 32% advanced or higher apprenticeship are available depending on the job 30 more than average . (The Building & for those aged 24 will no longer be type. To qualify, applicants must ● Allied Trades Joint Industrial Council eligible for Skills Funding Agency pass an appropriate CITB health and 3% of employers recruited 17- to 18-year-olds an 18-month level-two apprenticeship, he or she agreed wage rates, for example, are funding at all. It is expected that safety test. into their first job straight from school (compared will often be over 19 years of age. Those in level- £4.35 per hour for 16-year-olds rising employers will continue to make a with 5% across the whole economy); three apprenticeship training are very likely to to £7.65 per hour for those at NVQ contribution towards the costs of the How construction compares with be aged 19 or over and thus subject to a reduced ● level two; however, not all employers apprenticeship, with the remaining other sectors on apprenticeships 3% of employers recruited 17- to 18-year-olds rate of Government funding, which deters both would pay these rates.) costs met by the individual. The number of apprenticeships into their first job straight from further-education businesses and individuals from level-three starts, broken down by sector, college (compared with 5% across the whole apprenticeships. The National Apprenticeship can be seen below. The figures for economy); and ●Construction apprenticeships are: paid jobs; Service, which provides a centralised England only have been rounded up This continues to provide a significant barrier ● 31 ● 4% of employers recruited new graduates into to up-skilling people across the construction 2 Section open to anyone aged 16 or over; portal for all apprenticeships, to the nearest 1000 (see table). 22 ● their first job from university (compared with 7% sector, which works against the Government’s CITB Employer seen as the gold standard in will provide up to 40,000 Panel: Employer apprenticeship terms, in that apprenticeship grants to employers In 2011, the Coalition Government across the whole economy). aim to encourage the acquisition of higher-level Attitudes and they last between one and four with up to 1,000 employees invested £1.2bn into apprenticeship qualifications across the workforce. Motivations in Learning years, according to specialism recruiting 16- to 24-year-olds, with programmes; that year, 457,200 It is far more common for employers in 32 and Training an additional £1,500 to encourage people started as apprentices . construction to have apprentices than is the case Employers to whom we spoke said they viewed ● and level; (unpublished) paid a minimum wage of £2.65 employers to take on new in other sectors: some 12% do so, compared with the construction apprenticeship as a gold standard 30 apprentices. Research from the National Audit 5% in the economy as a whole. However, 78% of and felt the current funding arrangement to be The Richard ● (around £100 per week); Office (NAO) has suggested that construction apprentices are at NVQ level two, unduly penalising the sector at a time when it is Review of industry-led with some college Apprenticeships, Apprenticeship levels many of these apprenticeships have around three times as many as level three – which supposed to be receiving additional skills support ● learning and assessment; BIS, November 2012 Under the Qualifications & been created in fast-growing areas is seen as the gold standard in apprenticeship. by Government as an enabling sector for growth. 31 ● at least 16 hours a week; Apprenticeship required to follow an appropriate Credit Framework, two-year such as IT and telecoms, and that a Apprenticeships are growing across the economy They want Government to accept some of the Statistics,(sourced from BIS Data curriculum for work to meet apprenticeships provide fifth of the apprenticeships lasted as a whole: starts increased by 58% between 2010 unique challenges faced by construction, reviewing 33 and 2011. apprenticeship funding to take account of the later Service) House of competencies as assessed; qualifications at NVQ levels less than six months . There has also Commons Library, ● start of apprentices compared with other sectors. required to furnish technical and one or two (equivalent to GCSE been widespread concern that many February 2014. The theoretical knowledge; qualifications); advanced are merely re-labelling existing sharp fall in starts ● 2.3 Training and across construction, designed by the sector apprenticeships are level three jobs and diluting the worth of the The construction industry uses the CITB as a funding for training vehicle to fund the fulfilment of its own skill needs. planning and the skills councils (working with (as a comparison, degree-level apprenticeship brand. built environment Because the entire industry benefits from people business representatives qualifications are level five). Around rants and funding are available to by 33% could in part from the relevant industry three-quarters of apprenticeships in help construction employers take being trained and yet it often falls to the smaller have something to do with an element sector to develop the course construction are at level two. on apprentices. These are provided firms to actually do so, the industry is subject to a by both the Skills Funding Agency, training levy paid by all eligible employers with an of reclassification. content), while the National At the time of going annual wage bill greater than £80,000. The CITB Apprenticeship Service helps to Apprenticeship starts in England across different sectors G which gives money to training to press BIS was providers such as colleges (although this is set to has statutory powers to collect these annual levy looking into this. fund the training; 2012/2013 Change since 2009/10 ● But apprenticeship required (from October 2012) change, as described below), and the CITB, which payments, which are reinvested to provide access Agriculture, horticulture and animal care 7,000 25% gives grants to cover employment costs and does to training grants for employers. Up to 60% of all numbers have to include completion of GCSE undoubtedly Arts, media and publishing 1,000 155% apprentices in the sector are employed by firms Maths and English (functional not differentiate by age. declined with 22 skills), with the support of Business, administration and law 160,000 109% with fewer than 10 employees . construction starts at 13,610, 50% fewer employers, for apprentices not Construction, planning 14,000 -33% Construction employers remain concerned that Government, through the Skills Funding Agency, The CITB pays up to £6,000 for a two-year than 2007/2006 already so qualified. and the built environment peak provides reduced funding for apprentices over 19 apprenticeship and £10,250 for a three-year Education and training 8,000 836% 32 Apprenticeship funding years of age. Very often a young person will not apprenticeship. Those firms that pay the levy are Apprenticeship Engineering and manufacturing technologies 66,000 56% Statistics, House of Apprentices not only work with the be accepted onto a construction site below the also eligible for an additional 22% funding; in Health, public services and care 123,000 179% age of 18, because of the fear it might contravene addition, top-up funds are available from other Commons Library, 8 employer but also get day release to February 2013 Information and communications technology 14,000 12% 33 attend a college or else undertake health and safety requirements – even though government programmes. Adult block training at a college. While the Leisure, travel and tourism 14,000 -2% with proper supervision that is not the case (as Apprenticeships, National Audit employer pays the apprentice for Retail and commercial enterprise 101,000 64% we touched upon in the previous section). By the time a construction apprentice has completed Office, 1 February 2012 16 No more lost generations:creating construction jobs for young people 17

In 2012, figures for the CITB training levy were as ● Summit Skills represents building services route apprenticeship funding direct to employers leaflet detailing what it sees as the advantages of follows: engineering, including industries such as heating, and consult on the technical details of the system a PAYE-linked scheme, including that it would ● levy income was £143.8m (slightly down from ventilation and air conditioning; in early 2014, and on the option of an alternative help link apprentices to other aspects of business £144.4m in 2011); funding route for the smallest businesses” 26. planning and could incentivise employers to make ● the Engineering Construction Industry Training The intention is that employers pay upfront for sure apprentices complete their courses, while ● grant expenditure was £78.2m (up from Board (ECITB) operates the grant levy system in the their apprentices’ training at a college or other recouping costs would be straightforward. £65.7m in 2011) engineering construction subsector; and training provider, then claim the money back from Government via the PAYE system. But fears are growing that the Government’s ● grant helped to support 17,073 apprentices, ● Asset Skills covers housing, property and move towards employer control of apprenticeship

2,068 training and development plans, 22,591 VQ facilities management. Jon Spencer, group training manager at Costain, funding could result in a drop in the overall number 2 Section achievements and 20,287 plan tests; and told us that this was the right approach for large of apprentices trained – just as output starts pick employers. Costain is one of several construction up. The Federation of Master Builders has said it ● 14,267 employers claimed the grant (down from 2.4 How funding structures might firms that have been piloting direct funding under is worried about a system of funding that would 15,648 in 2011). change – the Richard Review reforms the Employers Ownership of Skills Initiative and is mean significantly greater upfront costs for small ne big change in the pipeline is involved in setting up an apprenticeship in building builders and more administrative work to reclaim As well as overseeing qualifications and training that Government looks set to give information modelling (BIM) as part of an employer the money spent26. It has said there should be the standards, the CITB is also one of the largest funding directly to employers rather consortium with other contractors. BIM has become choice for smaller suppliers to keep working with managing agencies for apprentices – and one than trainers, to ensure that training important in the building industry as a means of their local college. This concern has been raised of the few rated as “outstanding” by Ofsted. O is more in line with what employers making the design and construction of buildings by smaller companies in other sectors too28. Firms It is currently responsible for around 12,500 need. This follows recommendations set out in more efficient (see case studies in section 4). getting payment for apprenticeship training could apprentices across Great Britain. The CITB the Richard Review23, which sought ways to make be subject to Ofsted inspections as well. There is recently announced it was making an extra £30m training in further-education colleges match The UK Commission for Employment & Skills, speculation that there will be another consultation available in grants from levy underspending to employers’ needs more closely by letting them which supported the switch to tax-system funding, on the matter, with alternatives set out for smaller kick-start skills provision as the industry seeks to purchase training or pool their purchasing power to has welcomed the Government’s plans as “putting employers29. recruit in the economic upturn. set up their own courses. employers in the driving seat”. It has published a 23 The Richard Many employers told us that they found the raft In its response24 to the Richard Review, Review of of recommendations to to have reached NVQ level Apprenticeships, of different Government funding opportunities, Government accepted many of its The Richard Review – BIS, November 2012 make the apprenticeships two in English and maths 24 combined with additional opportunities to access recommendations, including the change of funding key recommendations The Future of funding through the CITB, excessively complex. regime, and went on to consult the industry on the --- programme more rigorous before they can complete Apprenticeships Employers repeatedly said they were confused best way of administering this25. Reaction to the In June 2012, the Government and more responsive to ● their apprenticeship; and in England: Next Steps from the by all the different pots of money and called for proposed changes has been mixed. Large employers commissioned entrepreneur employers’ needs. These ensuring that Government included: funding creates the Richard Review, funding arrangements to be simplified. seem to welcome the move, if not so warmly in and business incubation Consultation specialist Doug Richard right incentives for March-May 2013 some cases, while on the whole the smaller firms ● 25 Every three years the CITB is subject to a review that train a large portion of apprentices believe it to undertake a review of redefining apprenticeships apprenticeship training, The Future of Apprenticeships involving a widespread consultation of the will be disastrous for the industry. They say it will apprenticeships in England, to be targeted only at with the purchasing those who are new to a power for investing in in England construction industry to establish whether the not only bring extra bureaucracy but also comes with the aim of ensuring Implementation they meet the needs of job or role that requires apprenticeship training Plan, October 2013 training levy system remains desirable. Just such a with a sting in the tail in the form of the review’s 26 review is in progress at this time (January 2014). proposal for employers to make contributions the changing economy, sustained and substantial lying with the employer. construction- consistently deliver the high- training; manager.co.uk, 11 to training costs – which could be around 30% ● October 2013 using recognised industry The Government accepted 27 Not all areas of skills are the responsibility of the for 19-plus apprenticeships and 15% for 16- to quality training and skills that Ibid 28 CITB – there are altogether four bodies in charge 18-year-olds. employers and apprentices standards as the basis of the Richard Review principles John Hyde, of training for the various aspects of the built need, and maximise the every apprenticeship and and published a consultation chairman of HIT Training, The environment: A consultation on the proposed shift closed on impact of Government linking to professional document in March 2013 registration in sectors seeking views on the Guardian, January 1 October 2013. In his Autumn Statement, the investment. In his November 2014 29 ● the CITB covers the building and civil Chancellor announced that “the government will 2012 report, the Richard ● where this exists; practicality of implementing construction- engineering aspects of construction; develop a model which uses HMRC systems to Review, he made a number requiring all apprentices the recommended reforms. manager.co.uk, 13 December 2013 18 No more lost generations:creating construction jobs for young people 19

There have been suggestions that SMEs could form companies were advertising construction-related training groups, using Government funding to 2.5 Traineeships traineeships on the National Apprenticeship purchase training at further-education colleges n addition to a changed funding Service website in the middle of January 2014. of their choosing. The funding changes may regime for apprenticeship training, However, traineeships are expected to gather more also impact on the CITB, which is currently the another further potentially political impetus as the school-leaving age is raised managing agency for 12,500 apprentices across important development is the to 17 in 2014 and 18 in 2015. Great Britain and receives a percentage of the I introduction of traineeships during training costs from colleges. 2013. These are intended to provide young people Traineeships are aimed largely at young people We hope that Government listens to the concerns aged 16 to 24 with a tailor-made package of aged between 16 and 19; those with learning

voiced by construction SMEs – which make support designed to give them the confidence, disabilities up to the age of 25 are also eligible. 2 Section up the vast majority of firms in the sector – skills and experience to compete in the labour The Department for Business, Innovation & in its forthcoming consultation on funding market. Traineeships are intended to form a crucial Skills is badging traineeships in the same family arrangements for SMEs under the new funding bridge between school and an apprenticeship or as apprenticeships, and employers are being reforms. other job, for those who lack the necessary skills. encouraged to consider in the round how many So far traineeships have been introduced in a very apprenticeships and traineeships to offer as part of low-key way and do not appear to have registered their workforce development. on the construction industry’s radar. Only five Traineeships for those aged 16-19 will be funded by the Department for Education, while youngsters Advanced Engineers, the Institution of Both David Cameron and Ed aged 19 and older will be funded by BIS, all from apprenticeships in Engineering & Technology Miliband have recently been existing budgets and at no cost to participants. engineering and the Gatsby Foundation, speaking up in support of The length of a traineeship will reflect the specific --- in response to an emerging apprenticeships. Launching needs of participants, but is expected to be around The Government has skills gap in the engineering National Apprenticeship six months – with some of that time spent in the announced a new initiative and construction sectors. Week in March 2013, the workplace and the rest in training at a college or to create 100,000 Included in the initiative are Prime Minister said that other training provider. engineering technicians by the apprenticeships set up taking an apprenticeship 2018, giving them structured by the pioneering Technician should become the new norm Companies offering traineeships are not obliged on-the-job experience Apprenticeship Forum, made for those who did not want to to pay their trainees anything, and concern has built upon a recognised up of consulting engineers go to university. And at the consequently been raised that trainees could academic qualification. On specialising in infrastructure. Labour conference in 2013, be exploited as free labour. It is vital that BIS successful completion of We highlight the work of this party leader Ed Miliband ensures the focus of traineeships is as a pathway their apprenticeships, and group in our case studies pledged that if Labour to an apprenticeship. If traineeships emerge as an by ensuring the appropriate section. were elected, companies alternative route to direct entry into employment skills and competencies are employing over 50 staff in construction, there is a risk that the reached, each apprentice will Current estimates suggest would be required to take apprenticeship brand could be devalued and skills be able to attain the globally that the UK needs to on an apprentice for every on-site reduced, as employers and individuals opt recognised professional double the pipeline of new worker outside the UK they for a less rigorous and less costly route into the registration designation recruits into engineering, employed. Labour has said it workplace. of engineering technician construction and is also committed to making (EngTech). manufacturing professions apprenticeships mandatory We fear there is a danger that the scheme could fail by 2020 in order to avoid a as a requirement across to provide people with the skills to forge a career The initiative has been severe skills shortage that public-sector contracts, and for life in the industry, thus preventing the sector created by the Institution could inhibit the growth of has talked about obligations from addressing long-term issues in reducing the of Mechanical Engineers, these vital UK sectors. for employing one apprentice numbers of young people not in education, training the Institution of Civil for every £1m of contract or employment. value. 20 No more lost generations:creating construction jobs for young people 21

has successfully been implemented through the remarked: “I have too often seen what can happen 3.1 Analysis of the section 106 system (whereby planning obligations to young or vulnerable people being placed on problems and solutions are imposed on developers to offset negative less than adequate schemes of all sorts; schemes e were presented with a variety impacts of construction), by including conditions specifically designed to ensure targets such as of reasons why the construction that stipulate a framework for management and reducing benefits claim applicants and/or achieving industry is not doing as much as a measurement of outputs in terms of training. training outcomes for training providers are met. might be expected to train and However, we also heard from witnesses how All the while, the administrators of these schemes W employ young people. As explained training requirements that stipulated the need for are happily patting themselves on the back, but in the previous chapters, the severe downturn has apprentices and local skills sometimes seemed these schemes often fail in getting the trainees any taken its toll. But even during the last boom the little more than tick-box exercises, which were closer to actually gaining employment.” opportunity for training more young people was never checked up on once the project was under not seized, as evidenced by the fact that almost way. Encouragingly, however, there is good practice to half the workforce is now aged 45 or over34. Firms build on. Throughout our inquiry a number of were content to rely on migrant labour, which has Susan Hayter, affordable housing manager at excellent initiatives to train and employ young left the legacy of an ageing workforce. The culture Balfour Beatty, told us: “We are working with people were brought to our attention – some of and structure of the industry, in which one in four organisations which rigorously enforce section which we have highlighted in our report. Social is self-employed, militate against training young 106 conditions. The use of section 106 conditions landlords are certainly showing more interest, and people. makes things happen – we can’t start on site until the Local Government Association provided us our employment and skills plan is in place and we with excellent examples from councils. Section 3 Section Of the 32 biggest contractors in the industry, only have to report quarterly on progress.” 12 have been training apprentices, according to Geoff Lister at the Cross Industry Apprenticeship She is a firm believer in having contractual We have broken down our suggestions for change into the following key areas: SectionHow to get more young 3: people Task Force35. And from our experience, the major arrangements in place to drive the agenda. ● Strengthening leadership (section 3.2) – house-builders have traditionally done less “Although attitudes in the construction industry creating a culture of commitment to training, into training and employment than they might to train young people – though have improved in recent years, there is still galvanised by strong industry leadership and a this may be starting to improve. Firms such as an overwhelming lack of engagement around refreshed CITB to create a partnership between Barratt and Persimmon now have substantial employment and skills issues, particularly on site, employers and young people and a more apprenticeship programmes, for example. where training is still considered to be a nuisance sustainable future for the sector. and something to be avoided if at all possible. The From the employers’ perspective, young people’s result is that unless employment and skills targets ● Using public-sector contracts to boost deficiencies in literacy and numeracy and lack are included as contractual responsibilities, they employment for young people (section 3.3) – of work-readiness are common complaints. are in the majority of cases unlikely to be fully shoring up contractual mechanisms in the public Government initiatives are being put in place to embraced. The phrase ‘use our best endeavours’ sector that reward suppliers and developers which tackle some of these problems, though some are so still crops up regularly and is basically seen as a offer greater opportunities for 16- to 24-year-olds deep-rooted that improvements will take time to get-out-of-jail-free card for contractors who won’t and ensuring that these obligations are delivered. filter through. commit to meeting targets. ● Attracting the best talent (section 3.4) – While major factors such as unpredictability “But if young people are to benefit from attracting and keeping the best people, by better of workload and certain structural aspects of employment and skills initiatives it is important promotion of careers in the built environment and the industry are bound to prove difficult to that they do not just become part of a tick-box improving the sector’s image. change, other impediments to greater youth exercise. Programmes should be specifically unemployment can more readily be challenged and tailored to address issues such as motivation, ● Creating a better apprenticeship experience overcome, as we discuss in the following pages. timekeeping, personal presentation and working (section 3.5). with other people, as these are things that young 34 Steps can be taken to ensure that training people can find difficult when they first start work.” ● Matching skills and training with changing Labour Force Survey, 2010 and employment form part of the contractual industry need (section 3.6). 35 requirements for construction projects. This Joe Brennan, director of Joe Brennan Training, building.co.uk, 24 August 2012 22 No more lost generations:creating construction jobs for young people 23

● Making it easier to employ and train young Construction Industry Leadership Council38, in by the CITB in England go on to achieve a full internal restructuring and changes to its people (section 3.7) – ensuring that red tape is not order to implement the aspirations of the strategy. framework. This is 10% above the national average governance and in January 2014 appointed a new a barrier to employment Key themes of this are the need for the industry for construction and 5% above the national average chief executive. We also acknowledge that the to improve its image and the need to attract more for all apprenticeship provision across all sectors.” organisation is working with Government as part talented people. These elements are vital to the of a triennial review to provide a road map for its 3.2 Strengthening leadership future success of the industry, but this has been However, the comments of John Gray, chairman of future in supporting the construction sector’s s Lord Heseltine wisely pointed out stated time and time again over recent decades London-based builder Diamond Build, were typical skills needs. We would hope that the changes in his No Stone Unturned report36, without resulting in lasting solutions. of those not entirely happy with the CITB: “The which follow will produce a more agile operation government can set national policies CITB is too inefficient – the administration costs that is able to respond to the needs of employers and create an environment that will So we believe there is an urgent and pressing need are too high and the application for grant too time- and to galvanise greater commitment from larger A enable business to flourish, but to take a more visible and higher-profile approach consuming.” firms and house-builders to throw their weight success depends on companies and individuals to the agenda on skills and young people. We behind a training campaign. However, the time working together. Nowhere is this sentiment more are calling on Government, the Construction There is no doubt that the CITB has taken the may have come to help modernise the organisation apt than in the issue of training and employing Leadership Council and the CITB to come together initiative on many fronts, including promoting through a change in the Industrial Training Act to young people. and pledge to tackle the issue at a high-profile shared apprenticeship schemes and the National allow the CITB to respond more dynamically to industry summit. Construction College. However, Jon Spencer, head industry’s skills needs. There is much to be tackled in terms of getting of training at Costain, said: “CITB needs to be from where we are now to where we want to be, but In the CITB, the industry already has a champion more responsive and agile. But it plays an essential The introduction of direct funding to employers most fundamental is the need for industry itself for training and a leadership vehicle, but one has to role, making sure the grant process works, that will also affect the operation of the CITB, and Section 3 Section to step up its commitment to training. As one ask: could the organisation be more effective? standards and requirements are met and that there this needs to be thought through carefully, given senior construction figure remarked, the industry’s is a properly developed coherence attached to the importance of the CITB in developing the attitude to training is largely one of “not really The CITB has a strong relationship with them. That role will always be needed. construction sector’s skills base. One option would needing to do anything, as it can always get the the construction sector. Some of those who be to utilise its network of 88 employment and people it wants from overseas” – which frankly, provided evidence to us pointed to the need for “The biggest restriction with the CITB is that it skills groups to help smaller employers bid for has often been done. As the CIOB report said: “It improvements, but there was no groundswell of tends to deliver what employers wanted last year training grants under any new scheme. is generally known that the construction industry opinion in the industry for the organisation – or – rather than next year. This really is the nature employs a large number of migrant workers. We indeed its training levy – to be abolished. CITB of the beast. They are entrusted with a hugely Key support from Government would also help

36 have evidence that a large number of contractors research shows that over 73% of the industry important task, and they want to go for a belt-and- the industry step up its training efforts. The No Stone actively favour employing staff from the EU and supports the apprenticeship services the braces approach to satisfy a wide spectrum. I think main issue construction employers described Unturned – In although this is well within legality, it is not the organisation provides. the CITB needs to listen to employers more and as reducing their ability to train was a reduction Pursuit of Growth, best solution for improving youth employment.” have the ability and agility to do what is required.” in post-19 apprenticeship funding. One way in Lord Heseltine, BIS, March 2013 37 Where comments were made about the which this issue could be addressed within the HM Government We were delighted to see several examples of organisation, the main areas of concern were its A number of employers told us that the current funding arrangements is through the Industrial Strategy: construction employers stepping up to the plate, operating efficiencies and its need to be more construction of buildings was becoming more introduction of what is being described as flexible Government driven by the desire to grow, strengthen and forward-thinking, agile and adaptable to the advanced, with high-tech facades and integrated apprenticeship. This would enable apprentices on a and Industry in Partnership, sustain their business, in some cases underscored changing needs of the sector. There were also components manufactured off-site, and building level-two course to progress to a higher, level-three Construction 2025, by the need to adapt to the changing business questions asked about its recruitment role and information modelling now at the heart of qualification without losing funding. July 2013 38 environment in which companies do take corporate whether this was the most appropriate use of the design and construction. Yet there are often no The Construction social responsibility obligations more seriously. levy. qualifications to match, with too much focus on Flexible apprenticeship would allow construction Leadership Council is a new 30-strong But these examples of good practice remain the the traditional crafts, like bricklaying. We expand employers, apprentices and training providers to cross-industry exception rather than the norm. The CITB, which has been awarded an on this in section 3.6. have more confidence that they would successfully group tasked with “outstanding” Ofsted assessment for its training achieve an apprenticeship qualification in delivering the Establishing a culture of commitment will need provision, says of its activities: “We currently However, the CITB told us it was restricted in what construction, while at the same time creating a Government’s new industrial strategy strong leadership, with a view to persuading and manage around 12,500 apprentices in Great it could do by constraints placed on it through the significant incentive for the construction sector and is being jointly cajoling others to follow. We are aware that BIS Britain and 7,000 in England, and achieve a Industrial Training Act. to up-skill, meeting Government’s ambitions for chaired by the has commissioned a new Industrial Strategy better completion rate than the industry at large. increasing the number of level-three qualifications business secretary for Construction37, and set up an accompanying Approximately 80% of all apprentices managed We understand that the CITB is undergoing across the UK workforce. At the moment, and Sir David Higgins. 24 No more lost generations:creating construction jobs for young people 25

witnesses told us they believed the sector was either safeguarded or created as a result of HCA that a company which gets a major contract should losing out to less rigorous, shorter apprenticeships 3.3 Using public-sector contracts investment programmes. Since 2011 the HCA has be the one employing, not passing the obligation in other sectors. to boost employment for young had no national target on apprenticeships. “Instead down the line. As a minimum they should employ people it is for individual areas to decide locally on the somebody to help their supply chain by seeking approach they wish to adopt. The guidelines say funding for them and monitoring the apprentice.” ●Recommendations: A training summit: The Construction Industry Therehy it is isnecessary a clear need for clients and that partners working in consortia are encouraged Training Board (CITB) and the Department for local authorities to drive training to take a group approach to the provision of However, another of the main problems with Business, Innovation & Skills, with backing from in the construction industry. Most employment and skills opportunities, including setting contractual obligations has been that the Construction Leadership Council, should W witnesses told us they thought that the creation and safeguarding of apprenticeships.” requirements can bear no relation to the actual convene a high-level summit with contractors using procurement and section 106 agreements39 skills and needs of a project. and specialist contractors and house-builders, to mandate employment and training were a good We note that there does seem to be more local authorities and social landlords to get idea. momentum gathering among social landlords Similarly, employment and training clauses in momentum behind Construction Jobs for and councils to try to leverage their construction section 106 agreements which make demands of Young People. This echoes a similar summit for However, what was also apparent was that in some investment to create more jobs for their residents, developers ( thus ensuing private companies like industry leaders back in 2001 on the theme of instances such requirements were not always though this is still patchy. We were encouraged to house builders have to play their part in creating safety: by raising the profile of that issue, huge being followed through. If clients stipulate training hear that the Local Government Association was employment opportunities for young people) progress has been made on construction sites to and employment requirements in contracts, then intending to run two surveys in the spring, one are often inadequate. Joe Brennan of Joe Brennan reduce significantly fatalities and accidents. proper enforcement and monitoring must go with with officers and the other with elected members, Training said: “Historically, I think it is fair to say it. to assess the extent to which councils are using that section 106 agreements have been worded Section 3 Section ● A revitalised apprenticeship strategy: A their procurement and spending power to leverage in a vague and ambiguous way. The use of the refreshed CITB should spearhead a new There are currently two key mechanisms for this new jobs and apprenticeships in their areas. term ‘best endeavours’ is well known to those apprenticeship strategy that would include an leverage in the public sector: as part of section 106 familiar with them and it has not been helpful in overarching vision for apprenticeship training, agreements in the planning process, or as part of a But we very much regret the downgrading of the achieving tangible outcomes. However, in recent setting out plans to increase numbers, simplify contractual obligation under the Social Value Act. HCA guidance. A number of contractors and social years the agreements seem to have become more funding arrangements, and ensure qualifications landlords told us that the framework worked well prescriptive with more definitive targets set.” 39 match the changing needs of the industry. The Public Services (Social Value) Act 2012, which and called for something similar to be rolled out Section 106 came into force at the end of January 2014, requires across other department contracts. Another of the main difficulties in attempting agreements are ● planning elements Flexible apprenticeships: The Government public authorities to have regard to economic, to deliver apprenticeships through section 106 designed to ensure needs to reconsider funding for “flexible social and environmental well-being in connection Diamond Build’s Gray said: “The answer is that no schemes is that the developer or contractor is that developments apprenticeships”, to cover those who have with public services contracts. It is a grey area, publically funded work should be placed with any obligated to take on apprentices from the local complement and reached 19 years old but have still to complete and there has been some confusion as to what organisation that doesn’t meet minimum training area for the duration of that scheme or contract. benefit the local labour market and their training. This would help boost higher, can be stipulated without contravening European standards – that would shift the whole emphasis The drawback is that a project timescale in one economy. Specific level-three qualifications across the industry procurement law. However, things should be overnight. Also, I believe suppliers should be asked local authority area is often not long enough to contributions and encourage an increased uptake of clearer going forward, given that in January the to provide evidence.” He added that firms failing to complete an apprenticeship, which often results in include training, construction apprenticeships generally. European Parliament voted to reform the EU Public comply should be fined and struck off the list: “If it the apprentice being laid off at the completion of employment advice, interview Procurement Directive – including a requirement becomes the norm across the country then people the scheme. guarantees and ● Greater collaboration between training boards: that contracting authorities consider social aspects will actually engage.” work placements. We think it would make sense to have greater among other criteria when deciding which bid is If the developer or contractor moves onto another Developers and collaboration, sharing of ideas and best practice economically advantageous. Other witnesses voiced their concern that scheme or contract in a different borough, for contractors are required to submit between the different training bodies covering contractual obligations are simply passed down the instance, the obligation is to take on apprentices plans for their sites the built environment: the CITB, Summit Skills, The Homes & Communities Agency also supply chain, often to firms with the least resource from that area for the duration of that scheme or and demonstrate the Engineering Construction Industry Training introduced guidelines for introducing and to shoulder such obligations. contract. The trainer or supplier can be left with that they will work Board and Asset Skills. monitoring employment commitments in housing redundant apprentices who are not fully qualified, with local training and apprenticeship contracts for projects that were partly funded using Roy Cavanagh, training and education executive scattered throughout different local areas. providers. 40 social housing grant40. For 2008-11 the provision of Seddon Construction, which has a tradition of HCA employment of apprenticeships was contractual, and in this training apprentices, said: “Clients – and of course The emergence of the CITB’s shared and skills guidance period more than 4,000 apprenticeships had been Government is a major part – should really insist apprenticeship schemes, national skills academies for partners, April 2011 26 No more lost generations:creating construction jobs for young people 27

for construction and apprenticeship training producing well-trained and qualified apprentices, rather than on-site trade activities. ● Performance indicators: National Government academies have been seen as ways of addressing but more importantly are not helping them achieve departments should consider including some of the issues raised in the previous section. their goal of gaining employment. ● Local authorities need to be made aware of mandatory employment key performance the document Working Together to Boost Local indicators for all centrally funded schemes, and Apprenticeship training academies (ATAs) “With a financial contribution verified, developers Construction Apprenticeships through Public the public-sector audit inspectorate ought to “employ” the apprentices, then hire them out will be able to make an informed choice as to Procurement, published in 2013 by the National include performance against the Public Services to various employers for the duration of their which training scheme or ATA they would prefer Apprenticeship Service and supported by the CITB (Social Value) Act 2012. apprenticeships; this often means that they may to use, based solely on the merits of the given and the UK Contractors Group. work for more than one contractor and or at more organisation, as it is going to cost the same ● Set up employment and skills groups: Local than one development site. A number of witnesses whoever they use. But more importantly, the ● There is no consistent approach to setting and employment partnerships should take a lead in – including those from local authorities – told apprentice receives a decent training wage as well measuring targets. setting up employment and skills groups (ESG) us that shared apprenticeship schemes can work as good support in the areas previously mentioned. to agree targets, manage initiatives and monitor well, as long as the apprentice is properly looked outputs for local jobs for young people. The after. With ATAs it is imperative that the trainer “This would also be fairer to those developers who ●Recommendations: Local authorities to leverage planning obligations: ESG is formed of a core of key stakeholders – genuinely finds apprentices contracts to move have traditionally prided themselves on providing Local authorities should help create more contractor, client representative, local authority on to and is not simply employing them for the excellent training and employment opportunities. opportunities by mandating an appropriate and economic development team, JobCentre Plus and duration of a contract won. This type of system would also lend itself to fairer effective level of training and employment of local training providers. It would also make a great scoring when awarding contracts to developers in young people through planning and then ensuring deal of sense for local enterprise partnerships to Other witnesses felt the industry was short- the future.” This would seem to be something local the requirements are properly monitored. We have someone with a construction or housing Section 3 Section changing young people by passing them from authorities and developers might like to consider. have seen that such a strategy works best when background on their boards who could provide a employer to employer. “We should be able to do there is buy-in from the very top of councils. clear focus on skills issues. much better,” said one. “There can be all sorts of cultural problems – in London, working across ●In summary,Contracts the still issues tend raisedto be won were: on cheapest price, ● Leadership from social landlords and public borough boundaries is fraught with difficulties and those that invest in training still do not benefit bodies: We regret that the HCA has dropped for young people, including gang territories and in terms of winning work. its obligations, but organisations like housing 3.4 Attracting the best talent transport difficulties. We’ve had instances where associations and councils should routinely hroughout our inquiry we were we can’t even get the apprentices/trainees to cross ● Public bodies can lack appetite to push for leverage their investment in construction presented with what on the surface the main road because of gang territories.” genuine training and local employment in their work in order to set out appropriate and seemed to be conflicting evidence. projects. realistic demands for training and employment On the one hand, it was a common It is also apparent that there is some inconsistency opportunities for young people as part of the T complaint that the industry was in how targets are set. ● However, changes to the benefits system, procurement process. Again, it is vital this is in unable to attract young people; on the other, local authority cut-backs and introduction of the partnership with their contractors and properly that construction courses in further-education Social Value Act are creating a desire among social enforced. colleges were oversubscribed, and that 6,000 ●Examples one (or of three) targets apprentices set are: per £1m build cost; housing providers to create more employment. apprenticeship places received 40,000 applicants. ● Adopting consistent guidance for employment So it is not totally accurate to say there is no ● a fixed number of training weeks; or ● Some section 106 agreements are worded demands: The construction industry would find it interest in construction. According to the National in a vague and ambiguous way – public bodies beneficial if clients adopted consistent approaches Apprenticeship Service, specialist construction ● a fixed sum of money paid to the council if no can sometimes ask for requirements such as to setting out training, education and employment apprenticeships are now among the most training takes place. training and employment for local people, but requirements and monitoring them. The HCA competitive across all industries, with more than then not enforce or monitor adherence to these skills and employment guidance was highlighted 20 applicants for each vacancy in the three months Joe Brennan told us: “Where, however, there is requirements. as working well, and we regret that this has to May 201341. a stipulation for a number of training weeks or been dropped from the HCA’s requirements for a number of apprenticeships to be delivered, ● Targets are being set by people with limited funding. Public clients would also benefit from The problems appear to stem from not having the developer/contractor may tend to look at, understanding of what can realistically be adopting guidance produced in the document enough of the “right” people knocking at understandably, the cheapest option. The cheapest achieved on a live construction site. Targets do Working Together to Boost Local Construction construction’s door, coupled with a diminishing 41 option may not serve the apprentice well, i.e. we are not take account of the fact that construction Apprenticeships through Public Procurement. appetite for the industry once the reality of National dealing with just ticking boxes and not necessarily spend may be largely on off-site manufacture working on site kicks in. Apprenticeship Service, May 2013 28 No more lost generations:creating construction jobs for young people 29

To enhance skills within the construction industry ● providing extra help to those who need it and this has been made harder by the scrapping of you talk to anyone within the industry, they fell it is necessary to attract high achievers as well as improving the apprenticeship experience; and the Connexions careers service and the onus on into it and then progressed in a haphazard manner those who are not so academically inclined. This schools and teachers, who do not always have the to where they are now – myself included. can be difficult, as many schools do not consider ● ensuring colleges provide the right sort of necessary knowledge, to provide careers advice. “For a young person – now required to stay in that construction can be a profession. It has long training. education or formal training for an extra year since been recognised that more needs to be done to Such negative perceptions were thrown up yet – the options are not straightforward, either in educate teachers and to attract high-achieving pupils. Attracting candidates with good GCSEs (at least a again in a comprehensive new survey by Pye Tait determining where there are vacancies or needs C grade) in numeracy and literacy is essential but Consulting, commissioned by the CITB42 to find in the industry and what is the right route to take. Construction, we were repeatedly told, is a skilled can be difficult. Common reasons cited for the out what careers advisers and teachers thought With diplomas, apprenticeships, traineeships, industry and is only going to get more so as the difficulty were that construction is often perceived of construction, and how best the industry might college courses, UTCs, NVQs and frameworks, it is industry embraces building information modelling to be a dirty, difficult and dangerous industry. change their opinions and support their work. It just too confusing. and modern methods of construction. Construction, in its entirety, encompasses a large was found that more than eight out of 10 felt they number of roles and professions and these are not did not have the appropriate knowledge to advise “The industry needs a gateway or route-of-entry reflected through careers advice and advertising. It pupils on construction careers. map of how to get into construction. The Industrial ●Matching improving people the withattractiveness need involves: of the industry to can be really difficult for young people to navigate Strategy provides the opportunity for CITB and schoolchildren and students; their way round the different opportunities, and The survey also revealed how careers advisers were the industry to address this and get across-the- desperate for more help from companies to provide board sign-up. If you picture an egg timer, with the information and materials for young people. This industry at the top and the pool of young people opportunities can Instead the guidance is particularly the case with schools, which are and other potential workers at the bottom, there Apprenticeship 3 Section procurement feasibly be delivered on recommends accepting already struggling to fulfil legal commitments to should be a row of turnstiles in the middle that guidance projects, and to ensure apprentices part-way offer impartial careers advice to pupils in years show the options to enter the industry with the --- that any opportunities through their training nine to 11 – that is, 14- to 16-year-olds (only 14% right qualifications in the right way. Over recent months are sustainable. In as valid when agreeing say they have the resources to comply) – and are the UK Contractors particular, it aims to procurement targets; now having to extend this to younger age groups. “You could then show a career path starting with Group (UKCG) has tackle the difficulties and better collaboration Previously, careers advice was the responsibility of the first step. As a 16-year-old, you and your worked with BIS, the caused by some between local local councils through the Connexions service. parents could look at where you would like to get National Apprenticeship common procurement authorities in providing to and how to start: is a university technical college Service, the CITB and clauses which require all training opportunities. Research conducted on behalf of the Association or an apprenticeship right for me? And if it is an 43 the LGA to develop apprentices recruited The guidance also of Colleges in 2012 found that 82% of school apprenticeship, how long will it take, where do I go, best-practice guidance on a project to be new highlights the shared teachers did not feel they had the appropriate what will I get paid and where can I get to in five, 10 for local authorities and from a specific local apprenticeship schemes knowledge to advise pupils on their careers and the or 20 years? on apprenticeships postcode. These clauses run through the CITB, same proportion were calling for better guidance and procurement. The can create problems for which are an excellent on advising pupils about their options after the “It sounds simplistic, but at the moment many guidance, published apprentices trying to example of programmes age of 16. Furthermore, 57% of school teachers felt young people take the wrong decision at 16, waste as Working Together to complete their training, that allow apprentices to obligated to encourage pupils to stay on at their two years, and then your mate’s dad gets you a job Boost Local Construction as often projects are work across a number of school after 16, with 26% ascribing this to pressure and the employer tries to work out what he can 42 Apprenticeships through shorter than the two- to different local schemes in from management, while 16% feared losing their do with you. Often they don’t know, so you learn Pye Tait Public Procurement, was three-year duration of order to gain the practical jobs if students were to leave school. a trade without any formal training that doesn’t Consulting for the a construction-based experience required to give you transferrable skills, doesn’t give you a CITB, February launched in July. 2014. This was apprenticeship. What complete their training. Suzannah Nichol, the chief executive of the recognised qualification – until you have to get an based on the views The guidance promotes happens when the National Specialist Contractors’ Council (NSCC), NVQ or a CSCS card to get on a site and then you of 745 careers the need for effective project finishes and Geographically linked told us it was impossible for schoolchildren and are forced through an inappropriate route just to influencers in the apprentice cannot boroughs could work young people to navigate their way through the get the tick in the box. schools, further- dialogue between local education and authority clients and transfer to projects in together to provide cross- construction industry career possibilities. She professional careers other local authority borough opportunities, is involved as part of the implementation of the “If a 14-year-old is interested, they should be able advisory bodies. contractors to determine 43 what skills and training areas? enhancing the apprentice Industrial Strategy for Construction, looking at to look ahead and make the appropriate choice Association of experience. ways to boost skills in the sector. She told us: “If at 16, enter the industry through the right path, Colleges, November 2012 30 No more lost generations:creating construction jobs for young people 31

get properly skilled and rewarded with a job that initiatives highlighting other aspects of the sector vocational training needs to be more mainstream interests them or pays them the salary they want, that might capture young people’s imagination – than it is at the moment, with greater acceptance 3.5 Improving the apprenticeship or at the very least a job that the industry needs such as environmental and social aspects, topics among schools that going to university is not experience and that they can do competently.” that are frequently covered in geography studies always the best route for young people to take. The raining and employment for young at school, for example. The industry desperately setting-up of university training colleges for 14- people in construction would be needs to develop more imaginative ideas to engage to 19-year-olds is a highly welcome move, which boosted if employers were more TheHow need improvements to attract a diversecould be range made of young people with girls and young women in particular. will help address the current bias for academic confident about youngsters’ skills with different skills and aptitudes has been a rather than vocational training. This new type of T and if more able young people were constant refrain. It is clear from our evidence- Aligned with this, the Big Bang Science and education establishment provides a common path interested in construction as a career. gathering that better careers information is needed Engineering Fair for primary and secondary school at 14 for both the university and the vocational to help the industry attract the breadth of talented children has proved a huge success since being set route and will break down barriers between the Construction employers are not alone in people it needs to meet the challenges it faces. It up by the UK Engineering Council. Is there scope two. We hope this programme will continue to be complaining that too many school leavers cannot has clearly not been helped by the lack of resources for a similar fair for the built environment? rolled out and scaled up. write properly, add up or appreciate the need in schools and colleges as a result of what we think to turn up on time. The Federation of Small is a short-sighted cut to careers services. Another way of engaging with young people Businesses (FSB), which represents nearly 200,000 is through award schemes showcasing the ●Recommendations: A step change in careers advice: Tthe quality companies, and the British Chamber of Commerce The Construction Industry Council and the CITB achievements of youngsters, often from very and standards of career advice must be made to have both made the same claims. could come together to explore the possibility challenging backgrounds, who have done attract a wider range of young people to work of setting up a comprehensive careers service, or well. The Youthbuild Awards could play a role in construction. It may be worthwhile for the Following the Richard Review, the Government has Section 3 Section at least a careers portal, for careers in the built in this, particularly if expanded into an annual sector, via the Construction Industry Council put in place changes to apprenticeship programmes environment. We understand that the possibility showcase of good practice in training, engaging and the CITB, to come together to explore so that those without good grades in maths and of a careers portal is being explored by a work and motivating young people. The awards are whether a comprehensive careers service – or at English will continue to study these subjects as stream as part of the Industrial Strategy for organised by the Youth Build Trust, which the very least a careers portal for construction part of their apprenticeships. Construction, which we welcome. has been successfully promoting the use of – could be established to provide a gateway into construction projects to engage with young people the built environment. This could encompass But we consider it unrealistic to expect some We are also witnessing how different approaches from disadvantaged backgrounds. Its Youthbuild more imaginative career tools (an Xbox game young people who are from disadvantaged to engaging with schools are reaping rewards. The programme is a pre-employment scheme that for construction, for example) to engage young backgrounds to be able to adapt to the world of Budding Brunels pre-apprenticeship programme could work well for social housing providers keen people with the breadth of construction careers. work without additional support. Extra funding organised by the Construction Youth Trust has to engage their residents in work. Most projects We welcome moves by the Construction needs to be channelled into personal development been highly successful in reaching out to 500 used construction skills training as a vehicle for Leadership Council to explore how a cross- and motivation programmes, especially for those pupils across London from diverse socioeconomic improving the employability of trainees, usually industry career portal might be implemented. young people who do not have a strong family backgrounds to help them become engineering hand-in-hand with developing other employment network to support them. With the school leaving technicians within the Technician Apprenticeship skills – literacy, numeracy, motivation, punctuality ● Create a construction careers ambassador for every age rising, there is more opportunity and need Consortium (see case studies in section 4). The and so on. All provided additional support to school: We would also back the extension of other to do this. This will help lower drop-out rates on Budding Brunels programme is being rolled out for trainees to help them overcome their lack of career initiatives that have proved successful, work experience placements and apprenticeship a number of infrastructure projects and clients. We experience, confidence or personal difficulties with including the CITB’s construction ambassador programmes. More importantly, it will help young wonder if this programme could be extended to moving into jobs. scheme. It seems to us that this programme, people to develop the confidence and skills needed other types of professions to help boost the gender whereby construction professionals volunteer to secure and maintain full-time employment. and ethnic diversity of new recruits. Charities like The CITB Construction Ambassador Programme, to visit schools and inspire schoolchildren and the CYT have built up an enormous trust in schools whereby construction professionals act students, is an excellent idea which could be Jean Duprez of K&M Decorating told us: “Young and colleges and this should be capitalised on. as volunteers to visit schools and inspire expanded in a co-ordinated and targeted way British people are totally capable of rising to the schoolchildren and students, could be expanded with other industry bodies; again, something that challenge. They most certainly can and will work Engaging schoolchildren through building with other industry bodies. This is something we we understand is being considered as part of an given a decent chance, and we have seen this with information modelling is proving very successful understand is being considered as part of a work Industrial Strategy for Construction work stream. our own eyes. Of course there can be issues with through A Class of Your Own, another example stream of the Construction Leadership Council. One aim might be to ensure every school in the behaviour and attitude, but give them a bit of of best practice we discuss in section 4, and we country could be provided with a construction respect, show them you expect them to deliver but wonder whether the industry could develop similar Ultimately, to quicken the pace of change, careers ambassador, if they wanted one. then meet them halfway by making sure your offer 32 No more lost generations:creating construction jobs for young people 33

means they will very likely get a job: this is the like the Prince’s Trust and the Construction David Rowbotham, director of safety and combination to make it work.” Youth Trust to run programmes for them) as a socioeconomic services at Mace, said: “There has been 3.7 Making it easier to employ and feeder for apprenticeship schemes run by their a large shift in the types of skills and workers required train young people Consultant Colin Gilfillan pointed out that suppliers. on site owing to modern methods of constructions, mall and medium-sized businesses accessing schemes and funding to support including off-site manufacture. We are working with account for over 80% of construction disadvantaged young people was overcomplicated. ● Getting residents into work: Generally we some very proactive colleges – but others seem to be companies. SMEs are the most risk-averse “Even we, so-called experts, are confused by the see a greater opportunity for more housing satisfied to deliver what was always delivered.” when it comes to recruiting and training 35-plus national schemes currently available for associations and other social landlords to S new staff, particularly during austere this age group. instigate pre-employment training, and However, the change in funding regime to give training economic times. Financing an apprenticeship is expensive; to provide a pivotal role in the way that funding directly to employer groups should help the Warwick Institute for Employment Research found “As we understand it, from next year the direction organisations like Peabody, Nottingham Homes colleges and training providers adapt more quickly to that the average net cost to a construction employer of a of most Government and EU funding to combat and East Thames are doing in leveraging their the needs of industry. The slow pace of change in this three-year apprenticeship was £22,000, compared with youth unemployment will be in the hands of the construction spend to provide opportunities in regard at present is seen as a huge problem by some of £2,300 for a similar scheme within retail44. It is unclear local enterprise partnerships, each of which is construction training for their tenants. These the larger firms. That said, we are concerned that the whether this figure takes into consideration the grant from developing its individual local plans at breakneck schemes work well when set up in partnership need for industry to contribute to funding the training the CITB available to employers within scope. speed. If they take this on without a good with contractors. component may discourage training in smaller understanding of what has gone before or what organisations. Tax breaks for SMEs could counteract works, they will inevitably reinvent wheels, and ● The need for a living wage: Many construction this extra cost. ●Construction There is too employers much bureaucracy complained and to duplication us that: we can expect a two- or three-year period of poor firms already pay more than the minimum wage – employers can recruit trainees through a variety Section 3 Section provision whilst they make mistakes and work out for apprenticeships (on average construction of schemes. Although the CITB carries out a large what does actually work.” apprentices are paid 32% more than apprentices ●Recommendations: Match training with industry need: One of the proportion of these through the levy system, there are in general). We would encourage construction vital changes that needs to be brought about is the still a plethora of schemes, adding to bureaucracy and firms to consider paying more than the need to match training provision with changing confusion on the part of employers. Additionally, those that do get apprenticeships minimum, which we believe would help reduce demands of the industry. The Government’s hope can find it difficult to keep going for a number of drop-out rates and make it easier for those is that by putting employers in the driving seat ● Short-termism of policies (such as recent changes reasons:● Paying apprentices the minimum rate of £2.68 who are forced out by financial hardship to stay there is more chance of this happening. So, with to the spending commitment on energy efficiency an hour can make it difficult for them to sustain the course. Employers told us that after a few changes being made to funding for training, we are measures under the Energy Company Obligation) creates their apprenticeship, with tools being unaffordable months, apprentices become productive and add in a bit of a wait-and-see situation. Though the a lack of confidence. – and can explain a drop-out rate of nearly 30%. value rather than cost. new regime could work well for larger employers, as we have said, doubt remains as to what ● The fact that funding is halved for those over ● NEETs (young persons not in education, compromise arrangements may be forthcoming 19 makes it far more costly for employers to take employment or training) run the risk of losing from Government for smaller employers, and how on apprentices to NVQ level three. Also, because of benefits if they engage with training for more 3.6 Matching skills and training quickly training providers will adapt to the needs insurance issues with younger people working on site, than 16 hours a week, which limits their capacity with chang ing industry need of industry. Again, as touched upon earlier in this construction apprentices may not start until 18 rather to enrol in training courses or take unpaid work ne of the most frustrating aspects document, we do see a role for the CITB to lead in than at 16. (However, some employers told us that this placements. that we could see was the mismatch this area and look for ways to work with colleges was a something of a myth.) of college courses to employment to be more forward-looking in anticipating how 44 prospects – thousands of people industry innovation will drive new skills and The Net ●Recommendations: Expand pre-employment schemes: There would O are doing diploma courses with qualification requirements for the future. SimplifyRecommendations: the funding regime: We were told repeatedly Benefit to Employer seem to be a great opportunity for more use little prospect of becoming fully trained or throughout our inquiry that accessing funding was Investment in to be made of pre-employment programmes, desirable in the workplace. A second aspect is that difficult for many employers. Access to training funding Apprenticeship as these can help prepare young people for colleges have been slow to adapt courses to how should be streamlined and simplified as much as possible. Training, work. Government could consider channelling the industry is changing. They may continue to We would like to see the CITB review this as part of a Terence Hogarth, funding from other streams – like the Work offer bricklaying when the real skills need is in new apprenticeship strategy, but appreciate that these Warwick Programme – through organisations such as facade fixing, for example. Often this would mean complicated processes are in the hands of other agencies, Institute for social landlords, which can use it to run their developing a new course and investing in new including the Skills Funding Agency, which is working to employment own programmes (or commission charities equipment, which is not always possible. develop a simplified funding system for 2013/14. Research, July 2012 34 No more lost generations:creating construction jobs for young people 35

hroughout our inquiry, and types of construction activity. Since the more) also struggle, as the actual work is often organisations and individuals told launch, employers in the scheme have created carried out by the SMEs which are unable to us about many exciting schemes and supported over 80 apprenticeships, from commit. across the country to get young which 75% of the young people have succeeded T people trained and working in in gaining employment within the construction We agree with critics of training academies the construction industry or engaging with industry. that they should not be seen as a universal the industry as a career. Here are just a few solution, partly because apprentices are not highlights demonstrating the breadth of work Calico Group’s set of legal clauses insisting always well looked after and are not found under way. on the creation of apprenticeships through continuous employment to allow them to procurement activity have been inserted in all finish their training. But what struck us about contracts. They include financial penalties for Building Lives was the successful partnership Case study 1: non-compliance. Calico said: “We consider and working with local authorities and housing Calico Homes treat employment key performance indicators associations, which effectively commission a Pioneering shared apprentices across as a non-negotiable and fixed cost, which is scheme to be set up. Building Lives also ensures Lancashire and Cumbria included and detailed within the early stages of that its apprentices, many of whom have had The Calico Group ably demonstrated that the tendering process. Suppliers are expected difficult lives, are well looked after throughout you do not have to be a big social landlord to to submit appropriate costs in order to deliver their training experience. Building Lives has drive the creation of apprenticeships, not just them.” pioneered a model whereby apprentices gain a for your own organisation but for a whole level-two NVQ in 18 months (in multiple skills) region. The Lancashire-based organisation rather than two years – which gets them into manages 4,600 homes and employs 350 Case study 2: the workforce more quickly, albeit at a lower people. It was instrumental in developing one Building Lives apprenticeship level – and are guaranteed a job afterwards. training academies SectionHow organisations are 4:getting young of the first shared apprenticeship schemes in the UK, working with the CITB. It also Working in partnership with social landlords people into training and work developed, ahead of other firms, a set of and local authorities Case study 3: standard contractual clauses to ensure that One of the most impressive initiatives we heard Nottingham City Homes employment requirements do not contravene about was the Building Lives apprenticeship Using the Homes & Communities Agency EU procurement rules, and it has made these training academies. These centralise the delivery model

available free to other organisations. What is whole recruitment and training process for Nottingham City Homes (NCH) is an arm’s- 4 Section more, it has also created systems to ensure that young people, who are employed by Building length-management-organisation (ALMO) requirements are religiously followed through – Lives and hired out to different projects to do employing 1,000 staff and managing over too often the Achilles heel of using construction their apprenticeships. There are currently five 28,500 tenant and leasehold residential investment to lever employment. academies open in London with another six or properties on behalf of Nottingham City so in the pipeline. Council. It has been levering construction The Lancashire and Cumbria Shared investment to create new apprenticeships, and Apprenticeship Scheme was set up in June Traditionally apprenticeships are for about also employing social enterprises in minor 2010. This is a shared apprenticeship model three years, and these are difficult to sustain construction projects to create work for the that directly recruits and employs apprentices within the construction industry as project long-term unemployed. and places them with host contractors for the work tends to be short-term and fragmented. duration of the development contract. These are Small to medium-sized construction companies Nottingham ranks 20th most deprived out not just housing projects but a variety of public often do not have the guaranteed work streams of the 326 districts in England, as recorded buildings across the two counties, including to commit to long-term employment for in the Government’s 2010 Index of Multiple a new health facility for the East Lancashire apprentices and feel unable to take on the Deprivation. Many deprived areas in the city Hospitals NHS Trust in Burnley. During an additional responsibility. Larger construction have higher than average levels of social housing. apprentice’s time with the company, he or she firms that have access to framework contracts As well as setting up in-house apprenticeship will work with a number of host organisations (multiple work packages over a period of three schemes for a number of different careers, NCH and will be exposed to many different job roles to five years for a value typically of £5m-£15m or has championed the Homes & Communities 36 No more lost generations:creating construction jobs for young people 37

Agency employment and skills strategy model recruiting apprentices. Over a three-year period still recruiting. The firm is training people in a subjects) to inspire and raise awareness in the on a number of major contracts, including the the consortium has grown and flourished, and variety of disciplines, from bricklaying to steel- project’s next generation of employees. David Decent Homes programme, whereby its “One in from 40 people starting on the programme in fixing to accounting. It is also part of a group Rowbotham, director for socioeconomics at a Million” scheme legally binds subcontractors 2010, this had risen by 2013 to 240 trained in 10 of 10 major contractors, convened by the CITB, Mace, said: “Hinkley Point C’s socioeconomic to train an apprentice for every £1m worth of colleges. to develop a new apprenticeship for building approach should be a template for future business. The programme is currently on target, information modelling (BIM). The government projects. Major projects should leave a skills with 114 apprenticeships created to date. This scheme illustrates how employers, colleges is demanding that BIM be used in the design and legacy in the community, with training facilities and professional bodies can partner to provide construction of all new publicly funded building that span the life of the project and post- NCH and its partner organisations and new types of training and reach out to young contracts from 2016 onwards, to help improve project.” contractors work in partnership with an account people who might not have considered an efficiency and reduce costs. It has created an manager at the Nottingham City Council engineering career. The project, managed by urgent need for the industry to become highly employer hub. The hub acts as a central point Sheila Hoile, involved developing a whole new skilled in this area. Case study 7: of contact for employers, contractors, training qualification. The Construction Youth Trust, London Legacy Development providers, and those seeking employment, to working with the consortium and funded by the Corporation promote vacancies with key partners. National Apprenticeship Service, Transport for Case study 6: Joined-up apprenticeship delivery London, the Royal Academy of Engineering and Mace and EDF Since October 2012, the London Legacy NCH also engages with local social enterprises the Gatsby Charitable Foundation, successfully Hinkley Point C Development Corporation (LDDC) has been to train and encourage them to be in pole recruited and supported a number of young Planning for the future delivering a large programme of construction position to tender for minor works. One people from non-traditional backgrounds for Preparations for the construction of Hinkley C works at Queen Elizabeth Olympic Park to of these is BESTbuild, which employs local apprenticeship positions in London, through nuclear power station demonstrate the sort of prepare the way for developments on the site. people, many of whom were previously long- its Budding Brunels schools engagement joined-up approach that can be taken to ensure The £292m regeneration programme, known term unemployed. BESTbuild is helping in programme. local people benefit by having the right skills for as Transformation, has prioritised jobs and the regeneration of the Broxtowe Estate, one when construction eventually gets under way. apprenticeships for local young people, and of Nottingham’s unemployment hot spots. As Sheila Hoile told us: “Having set the Mace has been working with EDF to map the particularly those from underrepresented For every £1 NCH spends with BESTbuild, £2 ball rolling, there was soon a lot of interest workforce required, then overlapping it with the groups who face significant barriers to entering of spending is generated within the City of from other companies who were beginning skills available and bringing together statistics or returning to the labour market. Nottingham. This strong multiplier effect is due to recognise the benefits of technician locally, regionally and nationally to identify to the local nature of the social enterprise, so apprenticeships. The latest estimate is that the gaps in labour provision. Mace drafted the The LDDC has commissioned Reds10, a

that nearly all of every pound NCH spends with across the UK over 50 companies are involved curriculum for the university technical college National Apprenticeship Service-approved 4 Section BESTbuild is reinvested in jobs for local people. at a local and national level. The beauty of being set up in Somerset, driven by evidence- apprenticeship training agency (ATA), to work the consortium approach is that it works for based data so that local providers and national with prime contractors and subcontractors to companies of all sizes, from the micro to global bodies can provide people with the right skill broker apprenticeship and job opportunities Case study 4: engineering consultancy practices.” sets for this highly technical project. In addition: for local people in Transformation. As an Engineering firms unite to recruit ATA, Reds10 takes on the apprentices, paying technician apprentices ● “Hinkley Champions” have been set up in their wages and providing training, and then Skilling up for infrastructure Case study 5: local Jobcentre Plus locations to work with hard- places them with subcontractors, allowing the In March 2010 Mott MacDonald was Costain to-reach groups. apprentice to complete his or her training across instrumental in establishing a consortium Training for the future different projects. To date, the model has seen of six of the largest UK engineering Costain, like a number of big UK contracting ● Mace has also put in place an employment a peak of 60 apprentices on site, the highest consultancy practices to plan and deliver an organisations, has not traditionally employed brokerage – so that there is less staff churn, as number on a single site in London, and probably advanced technician apprenticeship in civil many apprentices in its recent history. But employees can be monitored and retrained as in the UK. engineering. The impetus was a requirement it has utilised the momentum created by the skill sets change over the lifecycle of the project. of the Transport for London Engineering and Employer Ownership of Skills initiative to The project has now moved into its follow- Project Management Framework, under which expand its apprenticeship programme. As one ● An education programme targeting further on phase with the legacy corporation, and companies had to accept the Greater London of the UK’s major contracting and engineering and higher education, as well as schools, was Reds10 is currently working closely with prime Authority’s strategic labour needs and training firms, in 2009 Costain employed fewer than 10 introduced to drive an interest in science, contractors that have recently commenced work commitment, which included a target for apprentices, but it now employs nearly 80 and is technology, engineering and maths (STEM on site to secure opportunities for existing 38 No more lost generations:creating construction jobs for young people 39

apprentices completing initial placements with level one and two certificates in designing, hroughout this report we have contractors. As of 3 September 2013, some engineering and constructing a sustainable built set out the barriers to creating 15 apprentices had been successfully moved environment. These qualifications are based on training and jobs for young people to new placements, and two into permanent coursework, with a grading exam for level two, in the industry and ways that employment. and from 2016 will count in headline school T improvements might be made. league table points. Here is the full list of our recommendations. To maximise opportunities for local people and underrepresented groups, the job and Working their way through an online workbook, apprenticeship brokerage project uses a bespoke learners develop knowledge and skills by Section 3.2 Strengthening leadership in online portal to which contractors upload undertaking a sustainable building project ●construction A training summit: The Construction vacancies that are then visible to local borough and, through the complementary workshops, Industry Training Board (CITB) and the brokerages, Jobcentre Plus and key specialist are guaranteed face-to-face engagement with Department for Business, Innovation & Skills, referral organisations such as Women into industry professionals. As part of the course, with backing from the Construction Leadership Construction. students design an “eco classroom” to help their Council, should convene a high-level summit own local community learn how to look after the with contractors and specialist contractors This allows agencies to refer local people for planet. and house-builders, local authorities and jobs at short notice, and Jobcentre Plus has social landlords to get momentum behind provided a key resource that filters those There are many opportunities for cross- Construction Jobs for Young People. This referrals, thus ensuring that businesses have a curricular learning, including opportunities echoes a similar summit for industry leaders sole point of contact and that only candidates for maths, English and science, as well as for back in 2001 on the theme of safety: by raising with the requisite skills are placed in front of other aspects of the wider curriculum such the profile of that issue, huge progress has employers for interview. as citizenship and PHSE. Young people are been made on construction sites to reduce encouraged to adopt a professional attitude significantly fatalities and accidents. throughout the programme and develop a wide Case study 8: SectionRecommendations 5: ● range of employability skills. A revitalised apprenticeship strategy: A Class of Your Own A refreshed CITB should spearhead a new Engaging schoolchildren in design and As one example of its growing success, A Class apprenticeship strategy that would include an construction of Your Own recently launched a Sheffield and overarching vision for apprenticeship training, As we have stressed in this report, one of the Rotherham programme for 30 local schools. setting out plans to increase numbers, simplify biggest tasks that the industry faces is how It was supported by the councils and local funding arrangements, and ensure qualifications to enthuse schoolchildren about working in education authorities, as well as by local match the changing needs of the industry. construction. One new initiative we heard industry (Amey, Arup, Keepmoat, Kier, Mitie, about is using computer-based technologies Mott Macdonald and NG Bailey). Nick Clegg ● Flexible apprenticeships: The Government to do just that. A Class of Your Own is a attended in his capacity as Sheffield MP and needs to reconsider funding for “flexible relatively new social business that seeks to make Deputy Prime Minister. apprenticeships”, to cover those who have schoolchildren and students aware of the careers reached 19 years old but have still to complete that construction offers. Working in partnership their training. This would help boost higher, with schools, Government and industry level-three qualifications across the industry

organisations, it has been delivering one- and encourage an increased uptake of 5 Section day workshops and other built-environment construction apprenticeships generally. student-engagement programmes to schools and colleges since 2009, and from September ● Greater collaboration between training 2012 onwards has offered the full and accredited boards: We think it would make sense to have “Design Engineer Construct!” qualification. greater collaboration, sharing of ideas and best practice between the different training bodies This innovative, project-based approach covering the built environment: the CITB, to learning results in students achieving Summit Skills, the Engineering Construction 40 No more lost generations:creating construction jobs for young people 41

Industry Training Board and Asset Skills. ● Set up employment and skills groups: Local ● Getting residents into work: Generally we employment partnerships should take a lead in see a greater opportunity for more housing Section 3.7 Making it easier to employ and train setting up employment and skills groups (ESG) associations and other social landlords to ●young Simplify people the funding regime: We were Section 3.3 Using public-sector contracts to to agree targets, manage initiatives and monitor instigate pre-employment training, and told repeatedly throughout our inquiry that ●boost Local employment authorities forto leverage young peopleplanning outputs for local jobs for young people. The to provide a pivotal role in the way that accessing funding was difficult for many obligations: Local authorities should help ESG is formed of a core of key stakeholders – organisations like Peabody, Nottingham employers. Access to training funding should create more opportunities by mandating an contractor, client representative, local authority City Homes and East Thames are doing in be streamlined and simplified as much as appropriate and effective level of training and economic development team, JobCentre Plus leveraging their construction spend to provide possible. We would like to see the CITB review employment of young people through planning and local training providers. It would also opportunities in construction training for their this as part of a new apprenticeship strategy, obligations and then ensuring the requirements make a great deal of sense for local enterprise tenants. These schemes work well when set up but appreciate that these complicated processes are properly monitored. We have seen that such partnerships to have someone. in partnership with contractors. are in the hands of other agencies, including a strategy works best when there is buy-in from with a construction or housing background on the Skills Funding Agency, which is working to the very top of these organisations. their boards who could provide a clear focus on ● The need for a living wage: Many construction develop a simplified funding system for 2013/14. skills issues. firms already pay more than the minimum wage ● Leadership from social landlords and public for apprenticeships (on average construction bodies: We regret the HCA has dropped its apprentices are paid 32% more than apprentices obligations, but organisation like housing ●Section A step 3.4 change Attracting in careers the advice: best talent The quality in general). We would encourage construction associations and councils should routinely and standards of career advice must be made to firms to consider paying more than the minimum, leverage their investment in construction attract a wider breadth of young people to work which we believe would help reduce drop-out rates work in order to set out appropriate and in construction. It may be worthwhile for the and make it easier for those who are forced out by realistic demands for training and employment sector, via the Construction Industry Council financial hardship to stay the course. Employers opportunities for young people as part of the and the CITB, to come together to explore told us that after a few months, apprentices procurement process. Again, it is vital this is in whether a comprehensive careers service – or at become productive and add value rather than cost. partnership with their contractors and properly the very least a careers portal for construction enforced. – could be established to provide a gateway into the built environment. This could encompass Section 3.6 Matching skills and training with ● Adopting consistent guidance for employment more imaginative career tools (an Xbox game ●changing Match trainingindustry with need industry need: One of demands: The construction industry would for construction, for example) to engage young the vital changes that needs to be brought find it beneficial if clients adopted consistent people with the breadth of construction careers. about is the need to match training provision approaches to setting out training, education We welcome moves by the Construction with changing demands of the industry. The and employment requirements and monitoring Leadership Council to explore how a cross- Government’s hope is that by putting employers them. The HCA skills and employment guidance industry career portal might be implemented. in the driving seat there is more chance of was highlighted as working well, and we regret this happening. So, with changes being made that this has been dropped from the HCA’s to funding for training, we are in a bit of a requirements for funding. Public clients would Section 3.5 Creating a better apprenticeship wait-and-see situation. Though the new also benefit from adopting guidance produced in ●experience Expand pre-employment schemes: There would regime could work well for larger employers, the document Working Together to Boost Local seem to be a great opportunity for more use to as we have said, doubt remains as to what Construction Apprenticeships through Public be made of pre-employment programmes, as compromise arrangements may be forthcoming

Procurement. these can help prepare young people for work. from Government for smaller employers, and 5 Section Government could consider channelling funding how quickly training providers will adapt to ● Performance indicators: National Government from other streams – like the Work Programme the needs of industry. Again, as touched upon departments should consider including – through organisations such as social landlords, earlier in this document, we do see a role for the mandatory employment key performance which can use it to run their own programmes (or CITB to lead in this area and look for ways to indicators for all centrally funded schemes, and commission charities like the Prince’s Trust and work with colleges to be more forward-looking the public-sector audit inspectorate ought to the Construction Youth Trust to run programmes in anticipating how industry innovation will include performance against the Public Services for them) as a feeder for apprenticeship schemes drive new skills and qualification requirements (Social Value) Act 2012. run by their suppliers. for the future. 42 No more lost generations:creating construction jobs for young people 43

We would like to thank all of those individuals John Gray, chairman of Diamond Build York Minster Acknowledgmentsand organisations who gave oral evidence, sent AGRenewablesWritten submissions Youth Build Trust in written submissions and offered advice, David Hall, assistant director for building and Aspect Construction guidance and support. commercial at Newcastle City Council Balfour Beatty Building Lives SirGuidance John Armitt, and help chair of the Olympic Susan Hayter, affordable housing manager at Calico Homes Development Authority Witnesses who Balfour Beatty Carmarthenshire Council Rodney Bennion, chair of the Construction Carolinepresented Aaron, e headvidence of learning and Chartered Institute of Building Youth Trust development at Nottingham City Homes Sheila, Hoile, director of Hoile Associates Coast & Country Housing Michael Brown, deputy chief executive of the Construction Industry Training Board Chartered Institute of Building Councillor Tony Ball, vice chair of the economy Kate Jansen, director of human resources at Diamond Build Stephen Burns, executive director for and transport board at the Local Government Willmott Dixon Durkan community investment at Peabody Association East Thames Housing Group Roy Cavanagh, training and education executive Phil Jones, head of regeneration at Calico Homes EMQ Consultancy of Seddon Construction Mike Bialyj, employer services director at the The Gilfillan Partnership Dermot Finch, director for the South of England Construction Industry Training Board Moira McKerracher, deputy director of the UK Henry Brothers (Magherafelt) at the Prince’s Trust Commission for Employment & Skills Hoile Associates Geoff Lister, chair of the Cross Industry Chris Blythe, chief executive of the Chartered Interserve Apprenticeship Task Force Institute of Building Suzannah Nichol, chief executive of the National Joe Brennan Training Andrew Pace, head of HR operations for Europe Specialist Contractors’ Council James Hackett at Laing O’Rourke Joe Brennan, director of Joe Brennan Training Just Housing Mark Richardson, HR director at Laing O’Rourke Pam Perry, assistant director for human Kier Sheffield Jon Spencer, group training manager at Costain Paul Brickell, executive director for regeneration resources at Newcastle City Council Kotuku Rob Tansey, group HR director at Barratt and community partnerships at the London Local Government Association Christine Townley, executive director of the Legacy Development Corporation Steve Rawlings, chief executive officer at London Legacy Development Corporation Construction Youth Trust Building Lives Lubetech Charmaine Young, chief executive of Berkeley Richard Bush, deputy managing director of Kier Mace Foundation and chair of the UK Contractors Group David Rowbotham, director of safety and Newcastle City Council socioeconomic services at Mace North Somerset Council Monica Chatterton, trustee of the Youth Build Nottingham City Homes Trust Caroline Taunt, head of business development The Prince’s Trust at the Prince’s Trust Six Town Housing Robert Clark, chief executive of Durkan Skills Solutions Martin Wheatley, independent housing adviser South Gloucestershire Council Brian Duffy, faculty director at the Leeds College and visiting fellow at the Smith Institute South Lanarkshire County Council of Building Southdale Gary Whittaker, assistant director for The Sovini Group Jean Duprez, affordable housing manager at commercial delivery at Nottingham City Homes Thomas Vale K&M Decorating Sian Workman, development director of Town & Country Housing Group Building Lives UK Commission for Employment & Skills Colin Gilfillan, director of the Gilfillan UK Contractors Group Partnership Wallsall Housing Group Wellingborough Borough Council John Graham, business development manager at Willmott Dixon the Construction Youth Trust Wolverhampton City Council You and Me Altogether in Construction HOUSE OF COMMONS LONDON SW1A 0AA