Examination of Witnesses (Questions 160-177)
CONSTRUCTIONSKILLS
27 NOVEMBER 2007
Q160 Mark Hunter: Can I take us to
the issue of the Government, as policy-maker. In your own submission
to this inquiry, you have called for real power to deliver employer-led
skills and training solutions. Could you perhaps tell us a little
bit more about what you mean in this context by the term "real
power"?
Mr Rogerson: First of all, we
are told by SSDA (Sector Skills Development Agency) that ConstructionSkills
is a high-performing sector skills council and understands the
needs of its employers and also its employees and, therefore,
we have made some significant progress down our sector skills
agreement. That includes both awareness, making the industry aware
of the changes that we are trying to introduce, and we have certainly
increased entry demand, and of course we are looking now at a
sound future for employment which sometimes has not been the case
for construction which helps our endeavours here. Our difficulty
is the sort of plethora of different types of training available
and also we have some issues to do with devolution because we
have to deliver into different methods in Scotland and in Wales
than we do in England. Obviously that causes us some concern,
and it causes confusion. Some of our members who come from Scotland
or Wales come to meetings and say, "This is all UK-dominated
and I have no interest", and it is quite a task for the Chairman
and myself, chairing the Training Committee, to ensure that we
get buy-in from all people at present and they do not switch off
and we are talking just England, just Scotland or just Wales.
Despite the introduction of Train to Gain, the funding arrangements
in England are still very complicated and quite difficult for
SMEs to understand. As the Chairman has said, the vast majority
of our employers are SMEs and they get to do their administration
at night after they have done a day's work on site. If we then
have to take them through extremely complicated methods of funding,
I am afraid they would probably either just fall asleep or close
the book and say, "It's too difficult for me", and I
am sure that causes many of the problems we have with employer
engagement. What we need is the maximum flexibility for us to
direct the cash into the areas where people require training,
and there are some very specialist areas, and the rigidity of
funding regimes works against us. In fact, to train someone to
operate a tower crane or a bulldozer, it has to be done one to
one, it cannot be done in bulk, it cannot be done with eight candidates
and one trainer, and the cost to us for that is something in the
order of about £34,000 to deliver an NVQ and we get about
£8,000 from the Government for doing that. Consequently,
it will come as no surprise that we have no competitors because
the other training colleges will not subsidise the industry in
the way that we have to do. If we also think about the work we
are now doing in the Skills Academy where we are identifying skills
and we are able to talk directly to the employers and to the employees
and involve the trade unions, which we do in the Skills Academy,
we are going to do significantly better if we have the flexibility
of funding ourselves and we did not always have to use pre-determined
government funding methods, so the high cost of specialist training
is a big, big factor for us. The other thing we have been doing
as well is managing to pick up people who have failed to get any
formal employment initially. They leave school, they take the
highest-paid, unskilled job and then all of a sudden, when their
social responsibilities kick in and they have families and homes
to support, they are then looking for a trade. The funding for
adult apprenticeships is extremely challenging. We have had some
very, very interesting pilots where—
Q161 Mark Hunter: I appreciate your
giving me a detailed answer, but perhaps I can just paraphrase
the real point I am trying to get at. If this Select Committee
were able to grant your wish, and I ask you to consider that for
a moment, to give you that real power, as you have referred to
it, that authority, what would be the key priorities then that
you would want to address in that situation? What are the two
top issues that you think a lack of real power, as you see it,
is holding you back from organising in a better way?
Mr Lobban: I would say specialist,
more expensive training would be one area and the other area would
be adult training, flexibility around those, and we would not
be looking to apply the money to everybody, but we would try to
make sure we were going to get a return on the investment.
Q162 Mark Hunter: I would like to
press that further, but we do not really have the opportunity
just now, so, if you would like to follow it up with any further
information that you could perhaps send to us in a memorandum,
that would be appreciated. Could you tell us about the National
Skills Academy for Construction, what progress you think there
has been with the National Skills Academy in the year since its
launch and do you actually feel that it is yet meeting the needs
of employers and employees?
Mr Lobban: We have made good progress
in setting it up. Our target is that we will have it operating
in all of the regions of England. We believe that the concept
can be picked up also in Scotland and Wales, though perhaps with
a slightly different name. We have currently got eight sites up
and running as project sites under that umbrella and we have 52
in the pipeline that we are talking to. We have an end target
of 30 by the end of 2010 and we believe we are on track. In terms
of what it is delivering, it is very early days yet and I think
we are learning as we go along. We are appreciating that the key
to this is the supply chain that works on this work and that supply
chain is not just 100% on that job full-time, but they also do
other work and we need to work with the supply chain, and the
training route for us is the supply chain.
Q163 Chairman: On the subject of
early days, have the machinery-of-government changes so far, the
new Department, made any difference, the Department of Universities,
Innovation and Skills?
Sir Michael Latham: No, sir. We
have had very good relations with the DfES when it was the DfES
and we now have very good relations with the DIUS, so it has made
no practical difference to us. We also have good relations with
your own Department, with BERR, and indeed with the Construction
Sector Unit.
Q164 Chairman: So no change really
in practice?
Sir Michael Latham: We are dealing
basically with the same people.
Q165 Mr Bailey: Earlier, Sir Michael,
you mentioned that you thought that public sector contracts could
do more to promote skills. What improvements, do you think, might
be made through the public procurement process to enhance skills
and, secondly, what work are you doing to ensure training and
skills are embedded in the delivery of the Olympics in 2012?
Sir Michael Latham: So far as
the question about the public sector procurement is concerned,
I think back to a major report which I wrote in 1994 which was
subsequently implemented both by the Conservative Government and
also by the new Labour Government when they brought the Construction
Act into effect. I believe very strongly that clients in the end
are the ones who drive best practice. I remember once, the day
after my report was published in 1994, that I was the guest of
the then President of the RICS along with a number of his other
guests, and one of the people there was the managing director
of a very large construction company and he said, "Michael,
I liked your report and all its recommendations about procurement.
I want to do it, but I'm worried that, while I'm doing it, my
competitors won't be, so they will steal a march on me",
so he said, "I'll do it when the Highways Agency tell me
to", that is to say, when clients insist on best practice
and then it will happen, and I believe that is still very much
the case. I have been surprised, speaking as a specialist in this
regard, that the Government has not been more insistent on some
things. It has not been more insistent, for example, on training
taking place in long-term contracts, it has not been more insistent
on CSCS cards being required by people on their sites because
some private-sector companies have been and so have some local
authorities and others, which is really good, so, I have to say,
we should be looking all the time, to my mind, to drive forward
best practice and the ones who are most likely to do this, to
my mind, are the clients in contractual requirements. So far as
the Olympics are concerned, I will ask Peter Lobban to say a word
about that because we are very heavily involved with them.
Q166 Chairman: We do not want a list
of all that you are doing, just a sense of your engagement and
whether it is working or not.
Mr Lobban: We are working with
the ODA and we are confident that we will be announcing some initiatives
with them in the next few months. Certainly they are wanting to
do things as the legacy of the Olympics, but the Olympics is much
wider than just the Olympic facilities. There is a huge amount
of construction around our core footprint and the Gateway and
we are working with a lot of employers who want to be seen to
be putting a legacy back around a banner of the Olympics, even
if it is not specifically on the Olympic facilities.
Q167 Chairman: Mark Hunter asked
the last witnesses to score them on a score of one to ten on this
issue. Are you in a position to offer us a score yet, one to ten?
Mr Lobban: I think it is probably
better to offer the score when we are sure of the initiatives.
Chairman: Encouraging.
Q168 Mr Clapham: In your submission,
you call for support to be moved away from training that is below
Level 2. Is that an indication that government funding is going
towards training that is below the minimum standard and, if so,
how do we shift it?
Mr Rogerson: I think there has
been a tendency to that and, as far as we are concerned, we would
prefer to be training to above Level 2; it is very important.
Thousands of young people are on publicly funded, full-time college
courses and do not get a qualification at the end of them, and
I do not want to repeat that because you have had that in a response
once from Sir Michael earlier, but, as far as we are concerned,
unless we have practical engagement with employers on site, we
cannot get the fully funded framework, we cannot complete an apprenticeship
and those people float into employment and probably we pick them
up later with on-site assessment and training, so there is double
funding going on here and the Government are paying for that double
funding by wasting money at the start of the process when people
are not fully engaged with industry. That is a fairly short answer
and I hope it answers your question.
Q169 Mr Clapham: Has that been raised
with government and, if so, what has been their response?
Mr Rogerson: It has been raised
with government and I think part of programme-led apprenticeships
came from that in trying to pick up those people and take them
into our network. When they do not start with us, we are trying
to at least pick them up and give them that assistance. I would
hope that by the end of next year we would be looking at something
in the order of between 15,000 and 18,000 people completing a
framework using the supply chain from the major contractors, but
they will not start with us, they will not be in our management
agency and the CAS (Construction Apprenticeship Scheme) arrangement
will still be the 7,000 to 8,000 people going through.
Q170 Mr Clapham: So when you call
for apprenticeships to be given to adult workers similar to those
that are given to younger people of 16 to 18, I assume that you
are thinking of the development from the on-site training. We
heard Mr Lobban say that there are 50,000 who have already gone
through on-site training, so when you are thinking of adult apprenticeships,
presumably you are thinking of people on site being trained up
to a certain level and then moving to apprenticeships?
Mr Lobban: We would not discount
that, but we would like to get it right first time. We would prefer
people to come in properly qualified, adults as well as youth.
In response also to the question that Mr Weir asked, this is part
of the control of funding, it is not just a question of saying
which qualification at which level. There are starter programmes,
there are foundation certificates, and we do not mind any of those
things, as long as we see a progression through to the person
in employment. Where businesses are just doing a training business
and taking money for giving somebody a piece of paper which is
not worth anything, we think that should be stopped and we think
the focus should be on getting the funding through from training
into employment and that "into employment" phrase is
really important; that is where the funding has to be tied in.
Q171 Mr Clapham: Is it possible to
say what your estimate is of how many adult apprenticeship schemes
could be offered?
Mr Lobban: We have never really
had the opportunity. I have to confess, they are more difficult
because people have got many more family commitments as they become
adults and the pay that you offer is not the pay you can offer
a 16- or 17-year-old, so it is much more difficult. We would need
to have much better co-ordination with other departments, like
DWP, and with some of the other government agencies. I believe
we could be talking about thousands, but they would have to be
very carefully picked and you would have to go for the people
who you think could be well-selected and could make the jump quickly.
Q172 Mr Clapham: Would that also
mean ensuring that they were not taking up an apprenticeship place
that a younger person could take up?
Mr Lobban: Indeed, but I think
there are ways we could manage that.
Q173 Chairman: I am always interested
when an industry does not seem to make a fuss about something
and levies are normally very unpopular, but the Construction Training
Board levy seems to have attracted very little comment from the
industry. Are you happy with the way it is working?
Sir Michael Latham: Well, let
me put it this way, Mr Chairman: that there has been a levy since
the Industrial Training Act of 1964 and the position is that there
are about 73,000 firms on our register, of whom about 27,000 actually
pay the levy because they have to have a payroll of over £73,000
a year and, if they do that, then they are required to pay the
levy. Our surveys show us that about 70-75% of the industry support
the levy because they realise that this is the only way that effective
training would take place. I am also personally very pleased that
every year the Secretary of State has to place an order before
Parliament which requires affirmative resolution in both Houses
to allow us to have an annual levy, and this can only be achieved
if we can show that more than half the industry actually supports
continuing with the levy. The new Education Act actually is going
to make a requirement of the levy order only coming every three
years before Parliament. I have to say, Mr Chairman, that we at
no stage asked for that and that was a decision of Parliament
and the Government, that we should go down that route. We were
perfectly prepared, and more than happy, to continue with an annual
accountability to Parliament.
Q174 Chairman: Of course there are
two levy rates, are there not? There is 0.5% and 1.5%?
Sir Michael Latham: Yes.
Q175 Chairman: That was a policy
decision to encourage use of direct employment?
Sir Michael Latham: It certainly
is and those figures have been in place for some years.
Q176 Chairman: What we have heard
this morning from the trade union, it suggests there might be
scope for widening the levy differential to encourage direct employment
more forcibly.
Sir Michael Latham: That is a
matter for Parliament.
Q177 Chairman: So you do not have
a view on that either? You are our servants in this respect, not
our masters.
Sir Michael Latham: Let us put
it this way: that we have to continually reinforce it to the employers
who actually pay this levy that this is necessary for them and
at the moment our surveys show, taken by outside market research
companies, that the industry is satisfied that there should be
a levy.
Chairman: Well, thank you very much indeed.
I am sorry we had to rush you a little bit in some respects. It
is always frustrating in the evidence sessions as time is always
against us, but you have been very helpful and we are very grateful.
If there is anything you think you would have liked to have said
at greater length, please do not hesitate to give us a supplementary
memorandum after this session. We are very grateful to you and
thank you very much indeed.
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