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A government-backed independent review into skills has called for a radical overhaul of the CITB and an increase in offsite manufactured homes as as part of a package of measures to halt the “inexorable decline” of the sector.
The review, carried out by property consultancy Cast boss Mark Farmer, paints a gloomy picture of the construction industry, blighted by low productivity, an ageing workforce, a lack of innovation and collaboration as well as a non-existent research and development culture.
Surging costs, driven by a shortage of skilled workers, have stalled numerous housing schemes that have become too expensive to build, such as Galliard Homes’ Capital Homes project in east London.
“The prognosis for the industry, if action is not taken quickly, is that it will become seriously debilitated,” Farmer warns.
He highlights the “ticking timebomb” posed by a shrinking workforce, which could decline by 20-25% within a decade. More people are leaving than joining the industry each year and Brexit is likely to exacerbate the situation by restricting the inflow of foreign workers.
Mark Farmer
The report calls for an overhaul of training by reforming the Construction Industry Training Board’s grant funding model, along with a joined-up construction strategy pursued by the government, construction industry and clients.
Farmer puts forward an action plan to modernise the industry and boost housebuilding, including a “carrier bag charge-style” penalty which envisages levying a tax of 0.5% of a scheme’s construction cost on businesses that commission work that does not support industry innovation and skills development.
Construction minister, Jesse Norman, said: “This government is determined to support more house building, more quickly and in the places people want to live. Given the launch of the £3bn Home Building Fund, Mark Farmer’s important review in this vital sector is very timely. It makes a strong case for change in the industry, identifies areas where it needs to improve, and sets out areas for action. We will now carefully consider his recommendations.”
The review also calls on the government to increase the construction of social and affordable homes by registered providers. It argues that much of this housing can be built more quickly and cheaply using pre-manufactured modules rather than traditional bricks and mortar.
One example is Legal & General’s new factory in Sherburn, Yorkshire, the largest modular housing factory in the world, which will produce homes through automated processes used to make cars and other consumer goods.
Another is the drugmaker GlaxoSmithKline’s “factory in a box”, which contains multi-coloured components packed in reverse order for quick assembly. It has been developed for emerging markets and cuts the construction time from 12 weeks to four.
Farmer said: “If you buy a new car, you expect it to have been built in a factory to exacting standards, to be delivered on time, to an agreed price and to a predetermined quality. This needs to happen more in construction.”
Offsite construction is one way of dealing with the housing crisis says the report (Cartwright Pickard)
Farmer says the recommendations need to be taken up in full and put into action by the Construction Leadership Council.
Andrew Wolstenholme OBE, co-chair of Construction Leadership Council said: “The recommendations are well framed in recognising other work currently taking place. In July the government announced it will review the Construction Industry Training Board (CITB). That is a key organisation for this agenda, and the Council would like the review to be radical – to be the force for the changed industry that we need requires a changed organisation, with a remit centred on developing the skills of the future, and efficient and effective delivery and use of its resources.”
Responding to the Farmer review Stephen Radley, director of policy at the CITB, said: “The Farmer review sets out a compelling vision of how our industry needs to change and what CITB can do to support it. We are already reforming CITB to give it a laser-like focus on careers, qualifications and standards and training and development, backed by a revamped grants scheme. Employers have the opportunity to create a more profitable, innovation and sustainable construction industry and we look forward to helping them to do this.”
Ray O’Rourke, chairman and chief executive at Laing O’Rourke, said: “Laing O’Rourke has invested heavily in innovation and continuous improvement, and therefore I welcome many of the findings and recommendations of the Farmer review. The report shines a light on the serious and systemic issues in UK house building and the wider construction industry, and we cannot afford to ignore them any longer.
“There is significant scope for radical transformation through the adoption of new technologies and advanced manufacturing approaches. This will deliver the quality housing stock the UK urgently requires and directly address the acute skills gap that threatens our very future. Government, developers and deliverers need to invest collectively to achieve these shared goals and future-proof the industry.”
Mace chief executive Mark Reynolds said: “Farmer’s review makes it clear that the construction industry needs to invest in training and R&D to boost productivity and ensure we have adequate capacity to deliver the UK’s economic and social infrastructure. It underlines the importance of introducing new skills and technology to the sector. We all need to embrace this catalyst for change to attract a new breed of talent to revolutionise our industry.”
The 10 recommendations in full
Recommendation 1
The Construction Leadership Council (CLC) should have strategic oversight of the implementation of these recommendations and evolve itself appropriately to coordinate and drive the process of delivering the required industry change programme set out in this review.
Recommendation 2
The Construction Industry Training Board (CITB) should be comprehensively reviewed and a reform programme instituted.
Recommendation 3
Industry, clients and government should work together leveraging CLC’s Business Models workstream activity, to improve relationships and increase levels of investment in R&D and innovation in construction by changing commissioning trends from traditional to pre-manufactured approaches. The housing sector (spanning all tenures) should be used as a scalable pilot programme for this more integrated approach.
Recommendation 4
Industry, government and clients, supported by academic expertise and leveraging CLC’s current Innovation workstream activity, should organise to deliver a comprehensive innovation programme. This should be fully aligned to market, benefits case led and generate a new shape of demand across industry (with a priority on residential construction). It should quickly define key measures of progress and report regularly against these as a check on the possible need for more radical measures. It should, in turn, also help to shape CITB reform proposals in relation to technology and innovation grant funding initiatives.
Recommendation 5
A reformed CITB should look to reorganise its grant funding model for skills and training aligned to what a future modernised industry will need. Industry bodies and professional institutions should also take a more active role in ensuring that training courses are producing talent which is appropriate for a digitally enabled world, making sure that the right business models are evolved with appropriate contractual frameworks.
Recommendation 6
A reformed CITB or standalone body should be challenged and empowered to deliver a more powerful public facing story and image for the holistic “built environment” process, of which construction forms part. This responsibility should include an outreach programme to schools and should draw on existing industry exemplars and the vision for the industry’s future state rather than just ‘business as usual’.
Recommendation 7
Government has recently reaffirmed its commitment to having a strong industrial strategy. The government should recognise the value of the construction sector and be willing to intervene by way of appropriate further education, planning and tax / employment policies to help establish and maintain appropriate skills capacity.
Recommendation 8
Government should act to provide an“ initiation” stimulus to innovation in the housing sector by promoting the use of pre-manufactured solutions through policy measures. This should be prioritised either through the conditional incentivisation of institutional development and investment in the private rented sector; the promotion of more pre-manufactured social housebuilding through Registered Providers; direct commissioning of pre-manufactured housing; or a combination of any of the above. It should also consider planning breaks for pre-manufactured approaches.
Recommendation 9
Government, as part of its housing policy planning, should work with industry to assemble and publish a comprehensive pipeline of demand in the new-build housing sector. This should be along the same lines as the National Infrastructure Pipeline, seeking to bring private developers and investors into this as far as possible to assist with longer term innovation and skills investment planning.
Recommendation 10
In the medium to longer-term, and in particular if a voluntary approach does not achieve the step-change necessary, government should consider introducing a charge on business clients of the construction industry to further influence commissioning behaviour and to supplement funding for skills and innovation at a level commensurate with the size of the industry.
If such a charge is introduced, it should be set at no more than 0.5% of construction value, with a clear implementation timetable. Clients should be able to avoid paying this by demonstrating how they are contributing to industry capacity building and modernisation by directly or indirectly supporting skills development, pre-manufacturing facilities, or other forms of innovation and R&D.
I agree there should be a overhaul within the CITB it’s about time there was some balance between the rich and the poor. Mick you make a very good point. I myself am 30 years of age and have decided that after being in the motor trade for the last 14 years that it was the right time for a career change. But trying on many occasions to enter the construction industry in the last 14 years at different levels I have now had to begin a BTEC course and will be working towards a HNC/HND in construction management.
This will probably take up to 5 years to complete. I also assume there are many others doing the same thing and I have to say I am very concerned that there may not be a job for me by the time I am qualified. Even more so if Mr Farmer and the government believe that building more houses offsite in a factory environment at high volume is the right answer to address the housing crisis.
The other thing I find a little ironic is in order to build these houses in this environment it means using wood a lot like America – yes there are a few man-made products available but overall you’re talking of chopping more trees down: sustainable or not is it not destroying a form of greenbelt land? We all know what it is like trying to build on greenbelt land don’t we? Sustainable employment is the right way to go… you’re right Mr Barnett.
This is terrible news for the industry seeking higher skilled labour. Farmer’s response to the current problem is not to point out the absolute failure of the CITB, but to try to dumb down the skills required for tradespeople to match those of factory workers. And if we don’t comply, higher taxes! One failing quango now managing another failing quango…..and when this fails, rather than invest in training, let’s invest in another quango to manage the quango that is failing to get the first quango to do what it is suppose to do. Train people.
This is an example of a preconceived report reviewing an incompetent organisation, with the goal of raising more money from SME’s and redistributing it to the big boys in the industry.
Let’s get this straight, UK has a large existing stock of buildings and the construction industry needs higher skilled people on site. Not factory workers. An example is the quality of construction coming out of the net gainers from the CITB levy. Extremely poor quality works due to using British Standards as the quality benchmark, not what it is, which is the lowest possible quality before you can be easily sued.
My company is small, but we spend a lot on training, we have between 4 and 6 apprentices at any one time, we invest in our tradesmen to go into further education to become the future industry professionals. But, last year I still paid out £10,000 to the CITB after rebates, which they then sent off to the big boys so they can produce terrible tradesmen.
So yes, Farmer paints a gloomy picture of the current industry, but his ideas are bureaucratically tosh that won’t help train a single person in the higher skills necessary to be a good tradesman. His response, just make it easier and cheaper to build, forgetting of course the billions spent of existing stock properties where the skills are needed.
The CIOB needs to step in here an call this the rubbish it is.
Mick Barnett
Construction Director
OLF Construction
Although I agree with a lot of the recommendations stated above, there is however a distinct lack of innovative thinking by many construction and civils companies.
The main problem how I see it, is that unfortunately the main driver behind the majority of projects is cost, and those placing the orders for materials, products and service having little or no insight into the benefits that a lot of the more innovative designs and materials that if used effectively on site, can save costs and bring a whole honest of benefits to a project, unfortunately the bottom line cost is looked at before the benefits are..
One further point I wholeheartedly agree with is that their is a lack of focused and effective training within the industry and, to be brutally honest, too many people that couldn’t care less that is only dragging the reputation of the industry even further down.
There certainly doesn’t seam to much pride in doing a good job anymore these days, with corners being cut and mistakes being covered up or hidden.
The industry does need a big shake-up, with a tightening up of quality and control to bring the industry back to a point where people with the right skills set and knowledge are knocking down doors to want join a professional industry with an ideal reputation of being the best in the world.
This was a government backed independent review?
It really saddens me to read that £3bn of government funding is set aside for the innovative marketing of buildings that will not be sustainable, or for that matter last for very long at all.
There are no references for the facts that Farmer put forward as the “inexorable decline of the industry”, or the lack of collaboration etc. Or any suitable meaningful explanation for why he thinks this. Only that the industry lacks innovation. Really? What about the existing workforce, and what about buildings that already exist? Here is where many of the skills are needed.
These skills come from time-served craftspeople that learn to ‘build’ with accuracy, precision, with different materials using different tools/machines – and then they develop speed. The skills of the industry can’t just be learnt by creating “new innovative training” – it’s far from reality, and it’s not effective. Construction materials and methods do change but we can’t just ignore our buildings that already are standing!
Where is RICS in all of this review? And where are the industry stakeholders who contribute to the broader landscape of construction, and the workers? UCATT for instance. Why are reviews always geared towards the benefit of big profits, expedient building? And the blame is always placed on the lack of skills?
The UK has a wonderful heritage of historic buildings, and traditionally built properties, that need repairs, or upgrading, these will far out last the flatpack houses that Farmer is encouraging.
What’s quite worrying is that he recommends that the CITB look at training, and skills that relate directly to the construction industry. The epic fail that Farmer falls down with is that the construction industry currently runs in an iterate fragmented manner that can’t even define the meaning of competency within in its own legislation as such to date there are over 400 accredited courses, and over 300 card schemes (Pye & Tait consultancy, 2011).
The CITB are restructuring the grant funding, and it’s important that the industry of construction workers speak up. Otherwise surely the likes of property consultants will be rubbing their hands together at the prospect of a government that will funding the big corporates that love to capitalise on.
Shortage of skilled workers doesn’t mean that the construction of homes should made of materials that are just simpler to construct.
Register an interest to the CITB people!
C’mon industry speak up!
Hi, I totally agree CITB needs to change but the whole method of training in the construction industry needs to change. How you can produce a trade’s man/woman in less than two years is farcical. Whilst the young individuals show enthusiasm and drive to join our industry they don’t get the benefits of long term commitment from employers or CITB under the current apprenticeship routes.
I appreciate I’m old school, but an apprentice many years ago was guaranteed a position for 3-5 years and developed their trade by shadowing a quality tradesman/women. They learnt everything to know about the chosen trade, they went on to develop their skills and knowledge of other trades and the integration of other trades in to the projects they were building.
Sadly this no long happens, which is why the industry has been delivering substandard building projects. The training and development of our industry is responsible for delivering poor quality and a low level of professionalism within our trades.
Finally whist moaning, how can CITB promote the need for SMSTS training courses for our site managers yet CSCS doesn’t recognise this as a Site Managers qualification and wont issue CSCS card with the SMSTS accreditation on the managers card unless the individual person is forced down the route of an NVQ 6-7.
We have very competent site managers who have developed the knowledge/experience and more importantly the life skills through 20-30 years’ experience of being in the industry working within their chosen field.
These guys do not want to go through NVQs as well as all the statutory training and development they have to do to carry out their duties correctly.
It is farcical to think my site managers have a basic operative’s card but can and do very well manage construction projects. YES WE NEED CHANGE