Farmer review: an honest appraisal of industry’s problems
Andrew Wolstenholme OBE, co-chair of the Construction Leadership Council, on the Farmer review.
At the end of last year the government asked the Construction Leadership Council to identify actions to reduce the industry’s structural vulnerability to skills shortages, taking account of the Council’s wider work including that on business models and offsite housing.
The Council welcomed this invitation. Our task is to be ministers’ go-to source of senior industry advice on the sector’s major issues, and there is no more important question for construction than this one.
This review has been carried out for the Council by Mark Farmer, CEO of Cast Consultancy, and I am very pleased to present his report. It does not, however, make for comfortable reading. It is not the first report to set out the shortcomings of the sector’s labour model, and prevailing business model, though few have done so in such a cogent and compelling way.
What is new, though, is the force of the conclusion that – given workforce attrition exacerbated by an ageing workforce – we simply cannot go on as we are. The report focuses in particular on housing, reflecting the original commission.
In fact, while different parts of construction have different features, this issue is to be found throughout the sector. In infrastructure and commercial property the skills challenges arising from previous underinvestment are similarly pressing, and the imperative to act similarly strong.
Here too we find the survivalist business model, the absence of alignment between industry and client interests, and of the incentives and means to invest, that Mark recognises are the heart of the problem. Put simply, much of the industry does not make enough money, or, where money is being made, feel enough confidence it will stay profitable into the future.
The consequence is underinvestment in training and development, in innovation, in raising productivity. The challenge the report sets us is to do things differently – to reduce the reliance on building in the same way that we have for decades if not centuries, with its heavy demand for on-site labour.
We will not have the labour force to deliver what the country needs by working in those ways, and those ways will not create enough added value for clients or suppliers to allow construction firms to prosper, and make those investment in our people and performance.
As the report says, this is a challenge for all – the industry, its clients, and government. Its recommendations are focused on finding and unlocking the drivers of change, including action to support predictability of demand, and on leadership to own the change. That is in part a role for the Leadership Council and its workstreams, though it will depend on the industry and its clients joining the journey. 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.
Since we were asked to carry out this work the country has voted to leave the EU. This has highlighted again the growing reliance of some trades in some regions on migrant labour, and only un1derlined further, if that were necessary, the imperative to make our industry one that trains and develops the people we need.
Last, I should like to record the Council’s gratitude to Mark Farmer and the colleagues who have supported him. We are enormously grateful for all the time and hard work and insight he has brought to the task. Perhaps the best thanks we as an industry could give him would be to make this report the moment when the recognition that we cannot go on as we are reached its tipping point.