Examination of Witnesses (Questions 240
- 259)
MONDAY 23 FEBRUARY 2004
MR TREVOR
WALKER, MR
ANDREW PEGG,
MR CHRIS
JONES, MR
STEPHEN RATCLIFFE,
MR NORMAN
MACKEL AND
STEPHEN ALAMBRITIS
Q240 Chairman: You would be welcome.
We should be very interested to know whether you are getting in
more women.
Mr Mackel: We do a national survey
biannually of our members and we get about 20,000 responses: only
9% of businesses are run by females exclusively, as opposed to
about 43% run by males; about 25% are mixed, then there are partnerships
and all sorts of other things. Yes, there is an imbalance and
that almost knocks on into cultural attitudes which I think it
is important we change. Moving away from the Federation now to
my personal role running my own business, of the businesses I
come into contact with, two of the best engineering businesses
are in fact run by female managing directors. I am not drawing
any significant conclusions from that, although it shows that
they are perfectly able to cope and compete on an equal footing
with men. There are some reasons, either the way we have developed
in society, or the cultural attitudes, or the constraints of family
life, which must all play a part in diverting women away from
the opportunities and challenges of running their own businesses,
but there is no evidence that I have seen which says there is
any capability gap between the two genders.
Chairman: We have opened the batting,
we have warmed you up.
Q241 Mr Jackson: I want to pursue
the point about the skills which business thinks it needs, particularly
the CITB. I was very interested in the observation from Mr Walker
about the Government having an idea that 50% should go to university
and that that represented an endorsement of academic as opposed
to vocational education. My understanding of the government's
policy is that they want a lot of that higher education to be
vocational in character. That is what they have said is their
intention and policy, so there is a question there. Is the implication
that the sort of skills which might be developed in that process
are not of much interest to your industry? What sort of skills
do you actually need?
Mr Jones: We need a balance of
skills. It is a very diverse industry and we need people at the
craft end who can perform tasks; we also need managers to lead.
What is happening now is that degree people are going into management
without the understanding of the technical side of the industry.
That is a problem for us because traditionally we have had people
coming through the craft trades and moving into managerial positions,
acting as mentors for the graduates to develop them so they can
then go on to become the managers of the future, but we are losing
those people with the dearth of apprenticeships and we are losing
out at both levels.
Q242 Chairman: Who are you losing
to what?
Mr Jones: There are fewer apprentices
coming through because fewer youngsters are being encouraged to
go down the vocational route. More and more children are being
encouraged to do GCSEs, to stay on at school to do A-levels and
then go on to do degrees. There are fewer apprentices coming through,
which was an alternative route to management. Our managers used
to come from two streams: there are good practical managers who
understand the industry at one level and there are degree people
coming through with different skills but lacking this understanding
of the industry. In the past we had the balance of those people
who complemented each other and we are losing out.
Q243 Mr Jackson: I was wondering
to what extent it might be possible to look at things like foundation
degrees and actually influence their development in a way which
might help to address your problems, or do you see those as irremediably
slotted into the concept of training white-collar workers?
Mr Jones: We are aware of the
development of foundation degrees. The structure of the industry
has made it difficult for many of us to get involved in their
development. Our industry operates very nationally, we are a very
transitory industry, we move around from site to site. For people
to engage in long-term relationships with further educational
establishments to develop and promote the foundation degrees,
a company like BAE, which has a static workforce and a number
of trainees coming through each year, is able to do this successfully,
but because of the nature of our industry we cannot do that. Take
my own company as an example, a major contracting organisation,
we have sites spread throughout the country and when I am recruiting
trainees it may be for one in Bristol, two in Birmingham, three
in Manchester, all over the country, according to where our current
workload is and the next year that may change considerably. So
it is very difficult for us to engage in the development of the
type of initiative the foundation degree is, which the Government
has been promoting.
Q244 Mr Jackson: There might be a
role for the CITB there.
Mr Jones: There is and they are
working to it. What we will need is a more flexible approach to
the development of training so young people, wherever they happen
to be working, can engage with the local establishment and take
their training passport around with them; wherever they happen
to be working they are able to receive training. At the moment
that is very difficult, there is not a lot of co-operation between
the further education establishments to make the transfer of training
possible.
Q245 Mr Jackson: The message I am
getting from this is that you think the key skills problem is
in the area of the future of craft skills and in the way in which
people with craft skills get recruited into supervisory and managerial
functions on the basis of having experience of doing the job.
Mr Jones: Yes, craft is important.
What we like about Tomlinson is the bridging between vocational
and academic. What we would find difficult would be when people
at 14 or 16 get pigeon-holed into either a vocational route or
an academic route and that seems to be the message young people
get. If they go for a craft apprenticeship, that is it for life.
It is good training and for some people that will be their career,
but some of those people will want to make bridges and go over
into the more academic side. We have to make sure that whatever
system or framework we put in place, there are those bridges at
certain points where people can cross from vocational to academic
training and that what they have done is recognised, that their
vocational training or experience are given some recognition,
so when they cross over to the academic side they do not have
to start again at the bottom and work their way through, which
is what very often happens at the moment. People will work for
a number of years, decide they need to better themselves and find
that the only route is to go back and start a degree from scratch,
because there is no recognition of what they have been doing up
until then. That needs to be built into the framework and that
seemed to be implicit in the Tomlinson proposals, without the
detail being explained.
Mr Mackel: We have a broader view
because we do not have any sectoral interest and I cannot speak
for the construction industry. In terms of apprenticeships,
if we take that as a source of technical and craft skills coming
through, for me the underlying problem—and I went through
an apprenticeship -is that if you look back 40 years, we had many
large companies who had a base. I was taken on as one of six apprentices
in my year, we were given no guarantee of employment, just a guarantee
of an apprenticeship with low wages, but you accepted it because
you received training. Those companies are now just as big in
profit terms, but they are very small in employment terms. When
I was running a big company for Racal, I closed down the machine
shop, the metal fabrication shop, the paint shop, the tool shop
and I subcontracted them, saved a lot of money, provided a lot
of work for local small businesses, but none of those individually
is in a position to provide for an apprentice. It is the demographic
change within companies and the shape and size and distribution
of businesses which then creates the problem. That is where we
need to be innovative and creative in reversing that and maybe
looking for clusters of small businesses, bringing them together
perhaps in a linear role through the main big business saying
to its sub-contractors that it will pay for an apprentice and
he will spend half a day a week with you, half a day a week with
you and in that way it can provide the breadth. A small business
who only has a milling machine cannot teach a guy to mill, to
turn, to grind, etcetera. They then give them the breadth and
at the same time give the depth and match that in then with the
vocational centres which can provide the theoretical. That way
you get a good mix and you provide apprenticeships. If we rely
on the old system it is just not going to happen because there
are no employment opportunities in the big companies in sufficient
numbers. I was talking to the operations director of one of my
bigger local builders—and I am now treading on other people's
turf—and the average age of his bricklayers currently is
56; last year it was 55. That gives you an idea of the size of
the problem and the kind of problem. We have to be creative in
the way we solve it, because you cannot rely on the FE colleges
to organise all of this or COVEs or any of the other establishments.
We have to look at creative ways of solving that. One final thought
is: take off the lid on the age. If we are talking about life-long
learning, why should someone of 40 not be included? I did it the
other way round: I came out of engineering and went into senior
management. You can do it the other way round and say you have
been made redundant and you fancy being a plumber now because
the wages are good. You then need the opportunity and mechanism
to get back into the chosen trade.
Q246 Mr Jackson: We are going to
come back onto modern apprenticeships, but my understanding is
that the idea behind modern apprenticeships, which began in 1993
and have carried on, was precisely to address that problem. I
wonder whether we could have a comment on modern apprenticeships.
Just to put it in a wider context, I understand the Government's
strategy as being to promote higher education, not simply as an
academic exercise but with a growing component of vocational higher
education, particularly in the form of foundation degrees which
are really up for grabs. Then in parallel to that to have the
modern apprenticeships system developing as a route into craft
training and that kind of training particularly for people who
are going to be working in rather fragmented smaller-scale businesses,
as you were saying. It seems to me that would be quite a powerful
strategy if it were to work. I wonder whether somebody could comment
on that and particularly on the modern apprenticeships point.
Mr Walker: May I answer a point
raised earlier? Of that 70,000 to 80,000 by which we need to increase
our workforce each year, probably at least four fifths of that
are likely to be crafts-related people. It is those people who
will have to come from the vocational side of the business. They
will have to have skills, manual skills, matched to high levels
of numeracy and literacy and IT to help this industry to continue
to develop and stay as a leader in this particular field. The
Government's policy is fine. In reality, if you look, and we surveyed
our workforce a year or so ago, one in five of our 16-25-year-olds
had difficulty filling in application forms. That is a reality.
It may well be that the government's policies are now directed
towards trying to rectify that, but it is not going to happen
overnight. Unless we put considerable emphasis on the core skills
being still directed—and in this regard we support Tomlinson,
who has hit the button right on the head—key skills being
developed and led into the vocational people as well as the academic
people, we are not going to get anywhere near solving the problem.
I shall let somebody else take the apprenticeship issue.
Mr Alambritis: There has been
a recent survey, and I can let you have the details later, which
shows that over 70% of graduates wanted to become civil servants.
Obviously that is not working. A more encouraging survey by National
Opinion Poll (NOP) showed that the vast majority of 14-19-year-olds
is beginning to prefer to work for smaller businesses, to trust
smaller businesses as employers more than the larger companies.
Then when we ask our members, small employers, what they are looking
for in youngsters, they do go a step below to attitude. 77% talk
about punctuality, attitude and appearance. What they are looking
for is one below, in terms of a firm handshake, a friendly manner,
good approach to customers, good manners. That is what they are
looking for first. After that, they are quite happy, where there
is support, to train in-house. A lot of small employers do train
in-house and they do worry about certificates and IIP and marks
and auditing and so on. It is important that we try to recognise
what smaller employers do in-house. They are certainly looking
for that core approach to punctuality, work, turning up and that
obviously breeds confidence that they will retain that member
of staff, if they spend money on training them. They go that one
step below.
Chairman: I do not want to leave this
section on skills and productivity but you can come in now, Jonathan,
and then colleagues will come back.
Q247 Jonathan Shaw: Gentlemen, listening
to your commentary in response to questions from my colleagues,
one cannot help but think that your view is that the Government
is to blame for everything and the construction industry has no
fault in this at all. Coming back to Mr Mackel's point that the
workforce is ageing, who stopped the apprenticeships?
Mr Pegg: It would be wrong and
incorrect to suggest that the construction industry was not involved
at all in what has happened. As an industry, we can only work
within the framework which is there and we did have a fairly well-established
apprenticeship scheme which unfortunately has suffered the McDonald
syndrome through modern apprenticeships. If you go into McDonald's,
you cannot buy a small drink, but you can buy a regular drink.
We used to have an apprenticeship scheme; we then developed modern
apprenticeships which take about three years as opposed to five
years. Now we have foundation modern apprenticeships. You can
get a foundation modern apprenticeship doing something which a
lot of people would not class as being a skilled trade. Inevitably
the original apprenticeship was subsequently devalued. The other
problem is that trying to do everything simultaneously is a one-size-fits-all
scenario. You get similar funding whether you are doing construction
or something which is much easier, shorter and simpler to organise.
Consequently, construction, previously having had a good time-serving
apprenticeship which worked, has suffered and been brought down
by the modern apprenticeships route to make it level with some
of the other industries.
Q248 Jonathan Shaw: Do you think
Government should just get out and leave it to the construction
industry?
Mr Pegg: No, we should look at
the modern apprenticeships scheme and the funding of it and make
it more flexible so that it is appropriate for each particular
industry. I am sure this problem is not unique to construction,
so it is merely a matter of making the system work and making
it flexible rather than pulling out of it altogether.
Q249 Jonathan Shaw: Describe it to
me then. If you can possibly imagine I am a young man, thinking
of leaving school at 16 and thinking about going into the construction
industry and taking a modern apprenticeship. How would your flexibility,
your idea of a flexible training programme for me to get my apprenticeship,
work in practice? What would be my experience, if you were designing
a course for me and funding was available in the way you think
it should be?
Mr Pegg: Broadly speaking the
target should be for it to be longer and on the NVQ side of it
there should be an element of realism as to how difficult it is
to assess on site. An infrastructure needs to be set up to do
the assessment in the workplace. That is where the difficulty
lies and that is the flexibility we need. In other industries
you can do an assessment in the further education establishments
but in construction—and I am talking purely about manual
trades, I do not want to take away from the other side—the
only way you can actually learn a manual trade is by doing it.
The only way you can assess the person doing the manual trade
is by observing them in the workplace.
Q250 Jonathan Shaw: And that is the
difficulty.
Mr Pegg: That is the difficulty.
Q251 Jonathan Shaw: How do you get
round that?
Mr Pegg: Sadly, it comes down
to funding.
Q252 Jonathan Shaw: If you had the
money, what would you do and how would it be done? If you were
advising the Secretary of State for Education, saying "You
have all this money. Don't spend it there, spend it here to get
the Andrew Pegg flexible modern apprenticeship scheme for all
the 75,000 people we need", how would you do that?
Mr Pegg: Looking purely at the
training side of it, you would need to make it attractive to employers
to recruit and train people to be workplace assessors. You would
need to make it attractive to employers with the right sort of
funding to support somebody during five years' worth of training
or four years or however long it might take. That is really the
simplistic approach to it, but in reality it is much more complicated.
Q253 Jonathan Shaw: What about in
terms of the contribution from the employer? You have all of this
taxpayers' money. In your memorandum you have said the Government
is spending £200 billion on construction of roads, schools,
hospitals, railways. What would be the share from the employers?
Mr Pegg: What you will find, looking
at it philosophically, is that there is a huge advantage for employers.
At the moment the wage rates are rising because of lack of skilled
people. If you look at it from an individual company's point of
view, it is costing them money to train for other people to use.
You really are looking for some central funding.
Q254 Jonathan Shaw: That is the British
problem, is it not? I hear it so often from employers: I am not
going to pay for this person to be trained because someone else
will poach him. No-one sees beyond the immediacy of their organisation,
that if they are taking part in this it will encourage other people
and what comes around is that they will be able to recruit people
into their company or even keep people.
Mr Pegg: In the construction industry
there is a good heart and because a lot of the people in the industry
have come through this sort of route, there is still a keenness
to do it. If it had not been for that, we would have been in a
much worse condition than we are now. We need to keep this attitude
going forward: educate people, develop them but make things much
easier to deliver. I also support one of the things said by the
Federation of Small Businesses that we need to get people to work
together to do this, rather than just looking at it as being an
individual company's problem.
Mr Mackel: We need to be creative
in the way we set it up. For example the FEEs have a lot of contact
with a whole range of small businesses and they could act as the
mediators for setting up clusters and arrangements for apprentices
to get the breadth of training they need by pulling on a number
of small businesses to take part in their training. The interaction
there is another way. To go back to the point about the funding,
I was lucky and I worked for a big company and got an apprenticeship,
but it always surprises me that we feel it totally correct to
take someone through to a degree—and we have just had the
debate about funding—and there is a consistent feeling throughout
society that it is right to fund that kind of training. If we
look at modern apprenticeships, which should be just a similar
route, and say "Oh, no, hang on, somebody else has to pay
for that because they end up with a vocational skill", that
seems to be a contradiction and it is devaluing it, or putting
it in a different category, a different range of skills, yet most
of our best, innovative management is coming through from engineering
backgrounds in manufacturing and in industry. We need to encourage
that stream and if we are going to encourage it, then that provision
should, to my mind, run alongside.
Q255 Jonathan Shaw: Do you have any
examples of where bringing people together, clusters, etcetera,
has worked that your organisation is aware of?
Mr Mackel: Yes, one in South Wales
is working in industry not far from Newport. There is a cluster
of woodworking related industries, working with forestry, etcetera.
They are related businesses but they are also providing a mechanism
for developing people with a broad range of skills and also feeding
off each other. So they have a book-keeper who then supplies book-keeping
services within the group. They are growing people and they are
developing a synergy between the different members of the cluster.
Where they have commonality, then that is used.
Mr Alambritis: A potential area
where there are similar businesses in one area is the jewellery
quarter in Birmingham for example. If we had the idea of clusters
for modern apprenticeships, someone could go to three or four
businesses and collect their modern apprenticeships at jewellery
headquarters in Birmingham and with bookbinding, those kinds of
skills, where we could get small businesses talking to each other
and being trustful of each other. Also through the supply chain:
Marks & Spencer for example through their supply chain could
say that their staff needed a greater knowledge of small firms.
They would pay the wage if the apprenticeship could be done through
the supply chain of Marks & Spencer with three or four of
their smaller suppliers. Those are some of the innovative ideas
we have. It is best not to be too harsh on employers because we
do have very low unemployment and in the last ten years, according
to our figures, small firms in particular have created two million
new jobs whilst the larger companies are shedding labour or offshoring.
Certainly there is still a long way to go in terms of getting
that balance between academic skills and vocational skills.
Q256 Jonathan Shaw: That is the second
example we have had in two weeks from Wales. They must be doing
something right in Wales.
Mr Jones: Just to give you another
example from the construction industry and picking up a point,
traditionally in the past the construction industry has not been
very good at thinking long term. That has mainly been because
of the uncertain nature of the economy in the boom or bust. Construction
has always been the first to suffer, which has meant a lot of
companies have not traditionally invested long term and training
was always very much the first thing to go when the industry was
struggling.
Q257 Chairman: You have had the longest
period without a down that anyone can remember.
Mr Jones: Yes, we are now in a
much more stable period and what we are seeing is construction
being much more long-term in its thinking and in investment. Certainly
my own company and a lot of the other major contractors put a
lot more investment into training at all levels. We do suffer,
there is a structural imbalance in the industry and a lot of the
major contractors do not do a lot of the work themselves, they
sub-contract out in packages. Companies like the one I work for
do not employ large numbers of operatives and therefore are unable
to employ apprentices because we cannot supply the experience
for them. We have to look at different ways of getting involved
in that aspect of training. One of the things which Carillion
have done is to set up training colleges, so these are colleges
where they will train young people and they do not just train
young people, they train mature people as well, coming into the
industry. They provide the training but they then place those
trainees wherever they can. Some are taken up by Carillion, but
they also form a network around the college which can provide
apprentices to the local businesses for whatever period they want.
Some of them go for a year; some of them go for a few weeks. They
can act as an agency in placing these guys. At the end of it,
these people have the experience they need in order to fulfil
their training. Carillion acts as an agency. It is a good example
and what we would like to do is to promote more of this and a
lot of the funding for that comes from the CITB who are funding
and promoting that, but also additional funding from the LSCs
and areas like that.
Q258 Helen Jones: I am somewhat confused
about the evidence you are giving us from the construction industry
at the moment. The Construction Confederation complained in its
evidence to us about a tendency to direct those less well-qualified
or those with lower levels of academic attainment into the manual
trades. Yet we heard from Mr Walker a complaint about the Government's
policy of 50% going into higher education. Perhaps you can clarify
something, because it seems to me that if you want to attract
well-motivated, highly skilled people, you are going to have to
give them the opportunity, not only to get their basic training,
but if possible to move on from that later in their careers and
that may well be done through foundation degrees or through some
other form of higher educational training later. What exactly
is your view about this?
Mr Ratcliffe: I speak also as
the father of two 14-19-year-olds, so there is a bit of prejudice
here, having gone into schools and attended parents' evenings.
One of the problems is that when I was a lad at a grammar school,
we did metalwork and we did woodwork and I realised that I was
not very good at metalwork or woodwork and hence I went into a
more academic career. At the moment, when my children have done
design and technology in school, it has largely been about design
and there has not actually been a very big opportunity for them
to demonstrate that they have a propensity to be skilled and good
with their hands. The first problem we have with the system is
identifying those people who are really going to be good and who
can be put into modern apprenticeships and go on to foundation
degrees because of their very good manual dexterity. What I find,
going round and talking to schools, which we do a lot of, is that
they are always being steered down the GCSE path and then into
A-levels. There is very little talk about going another way and
getting some experience in manual skills and then taking it from
there. Amongst careers officers it is just not something which
comes up very often as an option. They are just steered down this
one pathway. The trick for us is to find ways in which we can
be much more active in getting into schools and demonstrating
to people the real opportunities in construction and somehow finding
means of identifying the best people for us. There are some green
shoots. Talking to a lot of our member companies this year, partly
because we have now had seven years of successive growth in construction
and people read stories that plumbers can earn £70,000 a
year in London, suddenly we are getting people with five GCSEs
at grade C and above talking to us about opportunities in construction.
That is good news.
Q259 Helen Jones: I do not disagree
with that, but my point was that if you want them to keep those
people in the industry, you have to offer them opportunities to
develop later on. Perhaps you could give the Committee a little
more detail about how you think that should work, how you can
get involved in foundation degrees, bearing in mind what Mr Jones
said is a very fragmented industry, and how you can influence
the development of those, so that you not only recruit the right
people, but keep them there in later years and inculcate a culture
of life-long learning. If you do not, your good people are just
going to go, are they not?
Mr Walker: The industry itself
did not stand back and say "Woe is us. Government must help
us. The education system must help us". What we are looking
for is support for the approaches we have already taken. Mr Shaw
questioned what we had actually done. The answer was that we set
up a self-development system on sites, on our contracts, founded
upon NVQs. For the last three to four years, we have been solidly
training and developing our workforce into an NVQ skill base,
to upgrade its capability. Up-to-date, we have pushed something
like 630,000 operatives through that route. It is fair to say
that a lot of them in the initial phase came from grandfather
rights, but nevertheless that occurred. We have another half a
million more in training and progressing down the NVQ development
route and that still leaves us something like half a million to
attend to, which in truth are probably the hardest ones which
we have left until the end. In the space of three or four years
we have managed to take on board a training process which effectively
has started already to train or has in training over two thirds
of our workforce as it currently stands. We are committed to that
route. We are also committed to using CITB, because of the nature
of our particular industry, to be the focus of our industry's
centralised needs in skills and in workforce training and development.
We are committed both to helping ourselves and to focusing down
a route we believe is the best route. I guess we hope that the
CITB will be able to focus its attention as a sector skills council
specifically on what we as a sector require. What I think we are
looking for is the support of Government, not necessarily for
additional resources, but perhaps to channel resources through
to fit that model and to help supplement the routes we have already
taken to try to put our own house in order.
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