This government’s shift into a higher gear has presented many positives for the industry but there are still question marks around apprenticeships. How can we best deliver a new generation of skilled construction workers?
This autumn has been a time of many changes for the construction industry. We are seeing it across the industry as the Conservative government moves into high gear to implement manifesto commitments, following the clear majority won in May’s general election. Within the context of huge challenges in meeting demand for more housing in the UK, the recently introduced Housing Bill will extend Right to Buy and promote starter homes, among other provisions. And following quickly on the heels of the introduction of the Immigration Bill, the Home Office’s “week of action” targeting illegal immigration in the construction industry is shining a very bright light onto the sector. I’m pleased to see industry groups and the Home Office working so closely on this issue.
More changes for the future are hinted at by the government’s recent announcement of the National Infrastructure Commission, chaired by the now-crossbencher Lord Adonis. This move bodes well for a de-politicised approach, suggesting the government recognises that investing in infrastructure must transcend political lines and be driven by expertise, not ideology. If the commission is successful in its remit of guiding policy, setting priorities, and holding government to account for delivering on its promises, I am optimistic that it can have a tremendous long-term impact, not just on our sector but on the whole of the UK economy.
All these developments are significant, but one that I would like to focus on is the government’s initiatives to boost the number of apprenticeships - with a target of 3 million new starts in this parliament. A key tool for the delivery of this goal will be the apprenticeships levy, on which the Department for Business, Innovation and Skills recently concluded its public consultation.
My belief is that the sector needs a strong CITB, not just for ensuring quality apprenticeships today, but for retraining and upskilling the workforce in years to come
The consultation paper was met with some concern in our industry, not least because of the uncertainty it created surrounding how the new levy would work alongside the one currently run by the Construction Industry Training Board (CITB). At the time of writing, many questions remain unanswered, with discussions between industry representatives and the government ongoing. While I applaud the government’s efforts to boost apprenticeships generally, it is manifestly the case that the construction industry is structurally different from many other sectors, with a huge percentage of the workforce being employed by small and micro employers, and it needs to have an apprenticeships solution which is different. One size does not fit all.
In addition, the sector is a critical enabler to virtually every element of economic growth for which the government is responsible.
While the CITB’s existing levy system is not perfect, it has a tremendous advantage in that it ensures employers of all sizes contribute and benefit - not just the “large employers” that will be subject to the apprenticeships levy. Significant questions remain about how the government plans to involve smaller firms, keeping in mind that in the construction sector, 60% of apprenticeships are delivered by companies with fewer than 100 employees.
Other questions remain as to how the government will ensure that the system is not just used for cheap labour but is actually used to invest in young people’s development and drive economic value. Notably, the CITB is working with employers to investigate how a “general to specialist” apprenticeship could give young people a broad base of skills before they specialise. This has numerous advantages, including increasing their capacity for seeing other perspectives on the building site and thereby contributing to efficiencies and risk management. And, significantly, it could help prepare young people not just for their first job but for their second and third ones as well.
The Treasury recently published the National Infrastructure plan for Skills, which said that 250,000 existing workers will need retraining in the next five years to respond to future needs. In such an economy where skills in demand will be ever-evolving, can apprenticeship programmes, no matter how rigorous they are, really meet long-term skills needs on their own?
My belief is that the sector needs a strong CITB, not just for ensuring quality apprenticeships today, but for retraining and upskilling the workforce in years to come.
Over the coming weeks, some of the questions hanging over the industry will become clearer. We may soon know, for example, what exactly the government means when it says that the apprenticeships levy will be paid into by “large employers”. We may even know how much that levy will be.
But many other questions will remain, such as how 16-18 year old apprenticeships and SMEs investing in apprenticeships will be supported. I urge the government to resolve, as quickly as possible, much of the uncertainty that is hanging over the sector.
James Wates is chairman of Wates, the CITB and Build UK