New housing and future construction skills: report

Chapter 3: Funding, Investment and Fairness

During the course of the SLWG meetings a number of aspects were raised and discussed relating to investment which the sector receives, the investment paid by the sector via levies, investment in training facilities and fairness in approach of funding of apprentices. The construction sector receives some of the largest investment of any sector via the apprenticeship routes and skills investment [19]. This is welcomed by the sector but also highlights the strategic importance and need. Given the future number of retirees and future growth in housing supply required it is likely the sector will need further investment from government if it is to deliver the future societal and economic benefits and housing targets.

Current investment by industry occurs mainly via the CITB levy and the apprenticeship levy (AL). Concerns were raised that whilst in England a company can track expenditure and direction on the AL skills development the current detail of spend profile into sectors by the Scottish government using AL funds is not clear. Whilst the distribution of AL to Scotland is within the block grant further clarity or detail of how the AL funding is spent by Scottish government relative to industry sectors would be helpful.

The recent announcement by CITB (20) involving the increase in annual attendance grant funding to apprentices and the increased funding for achievement grants, on successful completion, is very positive for the sector and apprentices. This raises the support funding from CITB for a full apprenticeship from £10,250 to £14,500.

Given the number of SME companies in Scotland aligned to construction and housebuilding, specifically the number of sub-contractors involved, they provide a critical delivery route for the construction of new housing and skills supply. SDS funding into skills and training for construction is delivered via delivery contracts. It would help the sector and provide greater clarity if the proportion of funding and impacts, which reaches SME’s was provided, as SME’s provide the largest contribution of apprenticeship routes into the sector.

During the SLWG anecdotal evidence was provided that some small and micro businesses in house building were becoming less engaged with apprentices and unaware of other types of skills support funding available. This is worthy of further research to identify if and why this is the case. This may be clarified from a parallel SLWG looking at SME businesses.

Having a well funded industry training programme which treats apprentices, new entrants and existing employees with fairness is attractive for those considering entering or returning to the construction and house building sector. There are variations in salaries, payments and support to apprentices across the sector.

One particular scheme which is worthy of further mention is the programme managed by the Scottish Building Apprenticeship and Training Council (SBATC). This programme of support creates a level playing field for all apprentices and companies involved and through set payments to apprentices provides a cohesive sector investment in future skills pipelines. The scheme also provides monitoring and support to apprentices. Such a common approach across the sector would be helpful to attract new entrants and also help the sector compete with other industry sectors to attract a wider diverse entrant group, who may not have originally considered construction and housebuilding career pathways. Other strong industry sector programmes of specific interest include the in-depth training and support for electricians via the industry trade body SELECT, with over 1,200 member companies employing over 15,000 people.

During the course of the last decade the further education (FE) sector has gone through a number of major changes involving mergers, reduction in programmes and changes in scope of delivery and assessment requirements. At the same time the industry as a whole has required an increase in new entrants, increased skills portfolios and new skills training and assessment to be delivered. The FE sector play a vital role in engaging with local SME’s, schools, widening access, inclusive growth and providing pan-Scotland training provision into highly practical career opportunities.

However, there has been a lack of investment in FE training facilities, technologies and software provisions the sector has required over the last decade. Whilst accepting that it may not be possible to invest in every college for every new training aspect having regional investment of key facilities and programmes for colleges to share would help. Such regionally shared facilities could accelerate delivery, specifically training for offsite, new technologies, EV charging points, health and safety and utilisation of virtual training techniques.

Provision of adaptable training facilities where several different modes and types of training provision can be undertaken in one location or space would also support training productivity. One aspect mentioned by staff in some colleges during visits and meetings by the chair was in relation to level of basic maths and writing skills evidenced by some new entrants. Other key ‘soft skills’ were also raised. The provision of additional pre-apprenticeship support was mentioned as one way to support this area. This would demonstrate the sector’s ambition to be attractive for all and an inclusive approach, particularly for school leavers who may be from disadvantaged groups and may need additional support.

The sector has an alignment with inclusive growth aims via support for veterans and training for future jobs, community benefits and employment reach into SIMD 10 and 20 areas. This is very positive for communities and society and the sector should continue to engage and if possible increase further this important activity.

A specific project which aims to support inclusive growth is the recent Housing, Construction and Infrastructure (HCI) Skills Gateway within the South East Scotland City Region Deal [21]. This is funded by Scottish government and is an eight year project 2019-2027. The projects brings together HE, FE, local authorities, industry and government organisations to maximise an inclusive growth approach towards job entry short courses, upskilling and advanced skills to support better workforce diversity and employment opportunities. Some SLWG members suggested that such an approach should be incorporated across Scotland. Scottish government may wish to consider how other regions and City Deals could benefit from a similar approach for Skills Gateways to be incorporated in their future programmes.

Finally, given the competition with other industry sectors to attract new talent and entrants the construction sector as a whole may wish to consider taking a lead on incorporation of the ‘living wage’ approach. If other employment sectors shift in this direction and the construction sector lags behind this may further compound attracting new entrants and talent in future.

Recommendations

R.3.1 Review and clarity of the quantity of Scottish Government construction skills funding actually reaching sector for training and specifically SMEs.

R.3.2 Fairness in approach across apprentices would be positive for the sector and be attractive to new entrants to the industry.

R.3.3 A greater clarity for industry on outcomes of their contributions to the apprenticeship levy.

R.3.4 Investment in resources / capex for FE sector to deliver future levels, quantity and quality of future skills training required, such as adaptable training facilities.

R.3.5 Pre-apprenticeship support should be enhanced to maintain high completion rates and be used as a tool for attracting diverse markets for future skills / jobs needs.