The incentives for employers to train and directly employ are impacted by a fundamental lack of stability at workforce level and the 'free rider' concept referenced above. The wide-scale incidence of self-employment is a reflection of a desire for flexibility, with little confidence in long-term employment prospects and a feeling that opportunism around inflated market labour rates in booms offset risks of low utilization, poor wages and no employment benefits in a downturn. There is often an unfair burden placed lower in the supply chain to train. It is clear though that despite the financial risk, some parts of the supply chain have actively embraced long-term thinking around skills and training (see Case Study 6). This seems to be often led by a non-financially motivated sense of collective responsibility to do the right thing and maintain a sustainable level of resources for the industry in the future. Unfortunately, this is not the industry-wide approach and is not inherently scalable.
Construction's trade training crisis has without doubt been exacerbated by a widespread and possibly misplaced fixation in this country with progressing to Higher Education (HE) rather than a fuller consideration of more apprentice based or vocational courses. The sea change shift to HE in the last 20 years has disproportionally damaged the depth of the resource pool that construction draws from.
Current low industry attraction levels (see more on page 40) are being further compounded by a funding regime for Further Education (FE) Colleges which is acting against wide-scale investment in modern, fit for purpose courses that are producing workers with the right skills in the right locations, including a new generation of digitally aware multi skilled workers. There are some notable exceptions (see Case Study 5). Future projections of declining numbers of new entrants and the structural funding issues highlighted above are also in themselves perpetuating a decline in training courses which may become critical if left un-arrested.
Perhaps contradicting the assertion that the industry is struggling with low numbers of new entrants, there also appears to be some evidence that it is actually the capacity and appropriateness of the FE sector, not the number of potential apprenticeship candidates, which is creating an exaggerated bottleneck of new resource development. There is also a major problem with the level of attrition between people starting courses, completing them and ending up in employment.
The implications of the new Apprenticeship Levy and moving purchasing power to employers via digital vouchers while focusing on longer-term outcomes and industry alignment remain to be seen in relation to impact on current skills planning and the Area Review process being undertaken in the FE sector. It is hoped they can only be positive.
Current investment in training and innovation is also not supported by the industry leadership fragmentation referenced on page 20. above. Separate training initiatives, borne out of representing members' interests, are not conducive to a single joined up strategy that will drive collective transformational change and reflect the needs of the industry as a whole, not just silos within it. This is important when there is so much transferability of skills within different parts of the industry.
Where exemplar activity in training and skills development has been observed by this review it is tending to be associated with longer-term programmes of activity or major infrastructure projects where the visibility of demand is longer-term and enables assessment of return on investment (see Case Study 7). These scenarios are the closest the industry gets to a reasonable level of demand planning and even then are often still linked to planning or regulatory obligations.
This review has also seen evidence of some interesting and high opportunity activity in the field of trade and professional re-training and re-skilling which has rightly been supported and embraced by industry. Such initiatives include ex armed forces training programmes (see Case Study 4) and initiatives looking to target workers from declining industries.
It has also been noted by this review, that the town planning system, through Section 106 agreements, often imposes insular training and employment related obligations on clients at a local borough level. There is clear evidence that such a geographically constrained approach is not leading to desired outcomes in terms of long-term permanent career opportunities and the supply chain is in many instances navigating the system to 'tick a box' including through flexible use of apprenticeship training agencies
Lastly, turning from trade based skills to professional services, there are some parallel observations that reflect a growing structural lack of skills availability. Many consultancies are now dealing with peak resource needs by increasingly relying on agency labour or by 'off-shoring' services to cheap international locations. A professional services equivalent of the casualisation of the trade work force has therefore begun to emerge in the latest cycle. The implications of this trend may not be as severe for UK construction as a reducing trade work force as digital enablement could make international labour substitution easier than for pure physical production. It does however bring into question the appropriate value add professional skills that we will need in the future to retain security of structural capacity in the UK and that we should therefore be nurturing domestically.