Select Committee on Public Accounts Second Report


35. The construction workforce needs appropriate skills to design and construct good quality buildings that are efficient; cost effective; and safe to construct, maintain and operate. The workforce also needs to be able to take advantage of latest advances in technology which have good potential to improve all aspects of construction. Between 1994 and 1998, however, applications for construction-related courses run by universities for professional staff fell by 26 per cent. In addition, the Construction Industry Training Board's Business Plan for 1999—2000 estimated that, over the next five years, 300,000 people will need to be recruited just to replace those leaving the construction industry. There is a risk therefore that the industry is becoming reliant on a less skilled workforce.[31]

36. We asked the Department of the Environment, Transport and the Regions whether greater national economic stability would mean that construction companies had more incentives to invest in developing the skills of their work force, because the risk of having to shed labour and waste such investment in the event of an economic recession every few years was reduced. The Department said that the construction industry's low profit levels provided little incentive for companies to train and develop their staff. The industry's workforce was also ageing: only nine per cent were women and only two per cent from ethnic minorities. That balance had to change if the industry was to attract and retain people.[32]

37. In the context of what they were doing to avoid the cost of construction projects increasing because of a skills shortage, the Department said that the initiatives they had underway to improve the performance of the construction industry were also intended to make it an attractive employment opportunity so that those who joined would want to stay. The Department for Education and Employment were responsible for promoting industrial training. The Committee asked whether the construction industry recognised that it was in its own interest to train its staff. The Department said that a leading number of companies in the industry recognised the need to improve their performance in recruiting and retaining staff. But to do so the industry needed to improve health and safety and site conditions and welfare as well as training. In February 2001 action to improve standards of training had been agreed by the Confederation of Construction Clients and representatives of major contractors, whereby they committed themselves to having a fully qualified workforce on their projects by the end of 2003.[33]

The construction industry's capacity to meet the growth in departments' expenditure on construction

38. Government departments' spending on construction is planned to increase following the Spending Review 2000, which doubled net public investment in infrastructure on transport, schools and hospitals over the next three years to 19 billion. We asked the Office of Government Commerce and the Department of Environment, Transport and the Regions what action they were taking to ensure that the construction industry had the capacity to carry out the work required by this increase in public expenditure. They said that it was important for departments to have an open dialogue with the construction industry so that they knew of departments' construction spending plans well in advance . The Office of Government Commerce said that their initiatives to drive out waste in the construction process should free up significant amounts of companies' resources to allow them to cope with the planned increase in construction expenditure.[34]


39. The Committee welcomes the commitment made by the Confederation of Construction Clients and major contractors to work to achieving a fully qualified workforce by the end of 2003. The Department of Environment, Transport and the Regions should work closely with the industry to develop and monitor plans to improve technical and professional skills so that it can recruit, train and retain a skilled workforce.

31  C&AG's report HC 87 (2000—2001), para 1.15 Back

32  Qs 14—15 Back

33  Q64, and Evidence, Appendix 2, pp 18—19 Back

34  C&AG's report HC 87 (2000—2001), para 1, Qs 66—67, 69  Back

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