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Government must act as construction apprenticeship starts drop by 44%

The Government must review its approach to apprenticeships following new statistics published which show that construction apprenticeship starts have plummeted by almost half.

According to the Federation of Master Builders (FMB), in March 2019 there were only 694 Construction, Planning and the Built Environment apprenticeship starts compared with 1,247 in March 2018.

Brian Berry, Chief Executive of the Federation of Master Builders, said “Construction apprenticeship starts have suffered a serious hit and we now need decisive action from the Government in order to reverse this decline. The Government must accept the recommendation made in the Review of Post-18 Education and Funding, to make provision for full funding, at all ages, for first qualifications at Level 2 and 3. The Government is uniquely placed to drive the apprenticeship agenda, and if Ministers want to achieve their target of three million apprenticeship starts by the end of next year, they must review apprenticeship policy, including the Apprenticeship Levy.”

“Of course the construction industry itself must do more to rally around a shared ambition to promote the industry and all its merits, such as innovation, design and entrepreneurship. The drop in starts by almost half should sound the alarm that we aren’t doing enough to get the message out there. If we don’t address the skills shortage by increasing training and apprenticeships, the construction industry won’t be able to expand and grow. Introducing a mandatory licensing scheme for UK construction could help create the culture change our industry needs by improving our reputation through increased quality and professionalism and thus make us more attractive to new entrants.”

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CITB sets out solutions to construction industry skills challenges

The Construction Industry Training Board (CITB) has set out its plans to help the industry meet critical skills challenges and secure its future workforce.

CITB’s business plan for 2019-2021 responds to industry’s demands for it to become more strategic and better focused.

The plan outlines the ‘Big Six’ skills challenges, based on research and insight from construction employers across Great Britain.

They include:

  • making construction an attractive career to a broader range of recruits
  • developing a ‘site-ready’ workforce
  • getting more construction learners to join the industry
  • growing the number and diversity of apprentices
  • helping smaller firms invest in the training that can transform their business
  • boosting the number of assessors for vocational qualifications

With an ageing workforce and the potential of losing EU workers, the industry critically needs a new generation of skilled, motivated workers. So CITB is launching a nationwide careers campaign that will attract and inspire many more recruits from all walks of life.

This big, bold campaign will highlight the many fantastic and well-paid career opportunities available, reaching groups who have traditionally been underrepresented in the industry. It will provide clear information on how to get into construction, including through apprenticeships and work experience, and will showcase the support available, such as higher CITB funding rates for apprenticeships.

Construction firms also say they struggle to find site-ready recruits. CITB will tackle this head-on by expanding the Construction Skills Fund initiative launched last year, which is funded by the Department for Education and delivered by CITB.

With 26 onsite hubs now running across England, CITB will use industry funding to create a further 20 hubs to extend the scheme to Scotland, Wales and other regions in England. These new hubs will give thousands of local people valuable onsite experience, and deliver the work-ready candidates employers need.

Construction now has more than a million small and medium sized employers, making them essential contributors to the sector and the economy. Yet many smaller firms operate on wafer-thin profit margins, making it hard for them to invest in the training that can transform their business.

In 2018 CITB helped over 1400 smaller employers access £6m in training support through its Skills and Training Fund. In the coming year, we will continue to invest by growing this fund to £8m, reaching 1900 firms.

CITB Chief Executive Sarah Beale said “Our Business Plan identifies the most pressing skills challenges we face as an industry, and sets out the detail of how CITB will work with partners to address them.

“We’ve built the plan by listening to employers and their needs, and making sure CITB is focused on a small number of really critical projects that it is best placed to deliver, whilst improving our services too.

“Working with employers, learners and education, I’m confident that this plan will help transform construction and make it fit for the future.”

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New framework unveiled to help industry become net zero carbon by 2050

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Building industry charity, the UK Green Building Council (UKGBC) have unveiled an ambitious framework for the UK construction and property industry to help us transition new and existing buildings to become net zero carbon by 2050, in line with the ambitions of the Paris Climate Agreement.

The report follows six months of intense industry engagement, involving over 180 experts and stakeholders from across the built environment value chain, and is supported by 13 trade associations and industry bodies including BPF, RICS and RIBA. It provides an overarching framework of consistent principles and metrics that can be integrated into tools, policies and practices, and aims to build consensus in the industry on the approach to decarbonising buildings.

The new framework offers guidance for developers, owners and occupiers targeting net zero carbon buildings, setting out key principles to follow and outlining how such a claim should be measured and evidenced. Two approaches to net zero carbon are proposed by the framework which can be accurately measured:

  1. Net zero carbon – construction: the embodied emissions associated with products and construction should be measured, reduced and offset to achieve net zero carbon.
  2. Net zero carbon – operational energy: The energy used by the building in operation should be reduced and where possible any demand met through renewable energy. Any remaining emissions from operational energy use should be offset to achieve net zero carbon.

With the report presented as a starting point, the next ten years will see the scope and ambition of the framework increased to encourage greater action. In the short-term, additional requirements will be introduced to challenge the industry, including minimum energy efficiency targets and limits on the use of offsets. In the longer term, the two approaches for construction and operational energy will be integrated into a broader approach for net zero whole life carbon, covering all of the emissions associated with the construction, operation, maintenance and demolition of a building.

The work has been made possible thanks to the generous support of lead partner Redevco Foundation, and partners BAM, Berkeley Group, Grosvenor, JLL and Hoare Lea.

Richard Twinn, Senior Policy Advisor at UKGBC said “The urgency of tackling climate change means that businesses must work together to drive down emissions as fast as possible. But this requires a shared vision for what needs to be achieved and the action that needs to be taken. This framework is intended as a catalyst for the construction and property industry to build consensus on the transition to net zero carbon buildings and start to work towards consistent and ambitious outcomes. It is the first step on a journey towards ensuring all of our buildings are fit for the future.”

James Wimpenny, Chief Executive at BAM Construct UK added “Contractors, clients, supply chains need to work together – and quickly – to radically change the way we procure, design and deliver buildings. Smart use of renewable technologies and efficient use of low carbon materials are a priority. Reducing carbon makes financial sense over the lifecycle of buildings and that means we should not focus solely on capital costs when procuring a building.”

Rob Perrins, Chief Executive at Berkeley Group concluded “This framework is an important step towards defining net zero carbon buildings and helping the industry understand how they can be delivered. We want to help lead this work, which is so important to decarbonising the built environment and protecting our planet for future generations. Sustainability runs through everything we do at Berkeley Group. We have already become a carbon positive business and have committed to creating new homes that can operate at net zero carbon by 2030.”

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Construction projects starts upturn

  • Starts in the three months to April rose 7% against the preceding three months and were 4% higher than a year ago
  • Residential starts were 4% lower than a year ago and unchanged on the preceding three months
  • Non-residential project starts were 3% higher than a year ago, lifted by a rise in commercial work
  • Civil engineering starts rose 18% against the preceding three months and were 50% higher than a year ago

The value of work starting on site during the three months to April was 4% higher than a year earlier, according to the latest Glenigan Index. Starts were also 7% higher against the previous three months on a seasonally adjusted basis.

Glenigan

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said “An improved April performance has provided a spring time lift, with the residential, non-residential and civil engineering sectors all seeing a rise in projects starts. Private sector and infrastructure projects provided the upturn in project starts, while government funded areas such as health, education and social housing remained weak.

“Private residential starts steadied during the three months to April. Project starts had been weakening since last autumn against a backdrop of fewer property transactions and weaker house price inflation in the wider housing market. However private housing starts rose 3% during the three months to April against the preceding three months on a seasonally adjusted basis, although starts were 7% down on a year ago. Social housing starts fell 6% against the three months to January, but were 4% up on a year ago.

“Overall non-residential projects rose 3% against the preceding three months on a seasonally adjusted basis and were 11% higher than a year ago. Private sector starts picked up from their recent weak performance with office, retail and hotel & leisure work rising during the three months to April rising by 13%, 39% and 32% respectively against a year ago. In contrast government funded sectors remain weak, with education starts 20% down on a year ago, and health and community & amenity sectors dropping by 6% and 41% respectively.

“Civil engineering starts rose 18% against the three months to January on a seasonally adjusted basis and were 50% higher than on a year ago. The rise in project starts was driven by a 35% rise (seasonally adjusted) in infrastructure work against the previous three months, while utilities projects rose 4% during the same period.

There was a sharp variation in the industry’s performance across the UK. Regionally the sharpest falls were in the East of England and Scotland with declines of 18% and 22% respectively. Starts in the North East, North West, West Midlands and South West also declined. In contrast, the value of starts in London, Wales and Northern Ireland were 85%, 50% and 97% higher than a year ago, while the East of Midlands, South East and Yorkshire & the Humber all saw double digit growth.

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Housing delivery will be hampered by skills shortage, warns experts

Small house builders predict that skills shortages in the building industry will hamper housing delivery and will eventually overtake access to finance as a bigger barrier to building new homes, according to recent research conducted by industry experts, the Federation of Master Builders.

Key results from the FMB’s House Builders’ Survey, the only annual assessment of small and medium sized (SME) house builders in England, include:

  • A lack of available and viable land tops the list as the most commonly cited barrier (59%) to increasing housing delivery and almost two-thirds of SME house builders (62%) believe that the number of opportunities for small site development are actually decreasing (up from 54% in 2017)
  • The percentage of SME house builders saying that a shortage of skilled workers is a major barrier to their ability to build more new homes rose to 44% (up from 42% in 2017)
  • Nearly half of small house builders (46%) say access to finance is a major barrier to their ability to build more new homes
  • More than half (51%) of SME house builders view the planning system as a major constraint on their ability to grow and ‘inadequate resourcing of planning departments’ was again rated as the most significant cause of delay in the planning application process for the third year in a row
  • When asked to look ahead over the next three years, more firms cited skills shortages as a likely barrier to growth than access to finance

Brian Berry, Chief Executive of the FMB, said “Nearly half of builders believe the skills shortage is a major barrier to their ability to build new homes. The construction sector is heavily reliant on EU workers with just under one in ten workers in the sector born in the EU. Brexit, coupled with the end of free movement, threatens to further intensify the skills shortages we already face. Given that the UK will leave the EU in less than six months, house builders are understandably concerned that skills shortages could worsen and choke housing delivery. In order to combat this skills crisis, the construction industry needs to encourage more entrants into the industry and develop higher quality qualifications. It is critical therefore that the Government doesn’t pull the rug out from under the sector by introducing an inflexible and unresponsive immigration system.”

“Our research also shows that the Government must continue to address the issue of access to finance for SME house builders. Although concerns over access to finance have eased slightly in recent years, in part thanks to the Government’s funding schemes such as the Home Building Fund, there is more that can be done. Our research suggests that it is the low percentages of project cost that builders are able to borrow that remain the greatest financial barrier to increasing their levels of house building. This latest research suggests that if firms were able to borrow 80 per cent, rather than the current 60 to 65 per cent of project cost, SME builders would be able to bring forward on average 40 per cent more new homes. Given the ambitious house building targets the Government is working towards, we cannot afford to ignore such a chance to significantly increase housing delivery.”

“A lack of available and viable small sites tops the list of frustrations for SME house builders for the fourth year in a row. Worse still, nearly two-thirds of these small builders believe that the number of opportunities for small site development are decreasing. However, the recent reforms to the National Planning Policy Framework, which specify that 10 per cent of a local authority’s housing delivery must be on sites no larger than one hectare, will help to address this problem. This will help to speed up the delivery of homes and lead to a more diverse and resilient housing supply.”

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Apprenticeship levy is exacerbating construction skills shortage

The Apprenticeship Levy is exacerbating the construction skills shortage and must be reformed urgently. The latest statistics released by the Department for Education show that the number of new construction apprenticeship starts for January 2019 has fallen to 950 compared with 1,216 the previous year. In particular, the number of starts for Level 2 apprenticeships, that is equivalent to GCSE level, has dropped to 555 in January 2019 from 712 in January 2018.

Brian Berry, Chief Executive of the FMB, said “These latest statistics point to a serious failure of the Government’s Apprenticeship Levy. Their publication comes at a time when 64 per cent of construction firms are already struggling to hire carpenters and joiners, and 61 per cent are struggling to hire bricklayers. The Government needs to make the Apprenticeship Levy work for small construction firms by increasing the proportion of Apprenticeship Levy vouchers that are permitted to be passed down the supply chain from large to small companies from 25 per cent to 100 per cent. After all, small and medium-sized construction firms train two-thirds of all apprentices in our sector and more importantly, they offer training in the skills the industry actually needs – the onsite trades like plasterers and plumbers.”

“Looking ahead, as part of its post-Brexit immigration proposals, Ministers want to close the door to Level 2 tradespeople by dubbing them ‘low skilled’ and preventing them from entering and working in the UK for more than 12 months at a time. It takes years to train quality tradespeople to become a Level 2 worker and even if we did have the time to train at this scale, there aren’t enough UK-born workers to go around as we are almost at full employment. The construction industry is facing a cliff-edge when it comes to skill shortages, and I’m concerned that we will not be able to continue growing and delivering on the Government’s housing and infrastructure targets if this state of affairs continues. The Government must fundamentally rethink the Apprenticeship Levy and its post-Brexit immigration proposals, or else the construction sector will not be able to deliver what’s required.”

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Cementing Compliance…

Over the past 100 years, through-wall construction has probably never seen such a period of significant change as what it has experienced in recent years. Traditional products that have become ingrained in building practices now require adapting because of changes to standards and performance requirements – most notably in relation to fire and thermal. John Taylor, Technical Director at Euroform, discusses the importance of continued product innovation to ensure that popular methods of modern construction – particularly facades in high rise buildings – can still be used.

Following changes to Part L of Building Regulations (England and Wales) surrounding the conservation of fuel and power and Approved Document B in relation to fire safety, there has been a renewed focus on the combustibility and thermal performance of building fabrics. Insurance companies have also tightened their approach and introduced new stipulations which dictate fire strategy. These changes have been welcomed by the industry in the best interest of safety and sustainability, but a new standard has been established for manufacturers and specifiers to comply with.

Building board specialist, Euroform, has responded to these market changes with the launch of A2 Versapanel®… a market-leading cement particle board which has been independently tested in accordance with BS EN 13501-1 and certified as a Euroclass A2 product.

A class of its own

Versapanel® is a widely specified product in building envelope applications and is long established in the market, proven to perform acoustically and deliver exceptional performance in the presence of moisture – cut edges do not require sealing to prevent degradation. In response to market demand for a simplified route to limited combustibility, Euroform has invested in the development of A2 Versapanel® to deliver enhanced fire performance.

The Euroclass A2 certification confirms the high mass and robust exterior lining of the boards is of limited combustibility when exposed to fire conditions.

As compared with standard Versapanel®, the new A2 Versapanel® delivers superior pull out resistance, with comparative tests demonstrating a marked improvement on an already very good performance. Offering superior mechanical performance as compared with exterior gypsum boards, A2 Versapanel® also helps to improve the air tightness of facades when sealed at joints. A wide range of finishes can be applied over A2 Versapanel®, including insulated render systems, terracotta cladding systems, high performance cladding systems and traditional brick coursework.
The launch of A2 Versapanel® is also timely for the construction industry. The simplified route to revised Approved Document B compliance is seeing many developments specify insulation materials which offer limited or non-combustibility – which place additional demands on the performance of the building boards in through-wall build-ups.

In the thick of it

The move to use materials of limited-combustibility in construction, particularly in high-rise buildings has resulted in the specification of heavier and thicker mineral-based external wall insulation. The industry has become accustomed to using light-weight building boards but building boards with a higher mass and robust exterior lining are often required to secure increased volumes of insulation.

A2 Versapanel® is an ideal solution as it offers enhanced mechanical performance and pull out resistance for help attaching insulation. In addition to mechanical strength, A2 Versapanel® also has excellent acoustic properties, which assists developers in constructing buildings which promote occupant comfort by minimising sound transfer from external noise sources.

From a handling perspective, A2 Versapanel® is supplied as standard in 2400mm x 1200mm boards in 10mm and 12mm thicknesses. The product can be cut to size on-site or provided in a pre-fabricated kit to simplify installation processes. CE marked according to BS EN 13986:2004+A1:2015, A2 Versapanel® has been independently tested as A2-s1,d0 reaction to fire according to BS EN 13501-1: 2007+A1:2009.

For further information on A2 Versapanel® or to learn more about specifying the product on buildings above 18m high, please visit www.euroform.co.uk or email info@euroform.co.uk.
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Employers and workers agree 2.75% pay rise in construction

A 2.75% pay rise for construction workers has been agreed for the year ahead following successful pay negotiations between the Federation of Master Builders (FMB) and Unite the union.

The Building and Allied Trades Joint Industrial Council (BATJIC) has agreed a one-year deal involving a 2.75% pay rise to come into effect in June 2019. This follows the successful conclusion of pay negotiations between the FMB, on behalf of SME construction employers, and Unite the Union, on behalf of operatives. BATJIC has also secured tax dispensation from HM Revenue and Customs for Lodging Allowance and Daily Fares Allowance for this year’s Working Rule Agreement after several years’ hiatus. The key information is as follows:

  • BATJIC has agreed a one-year deal involving a 2.75% pay rise over the next year
  • All apprentices and trainees will also benefit from a 2.75% pay increase
  • The adult general operatives’ rate increases by 26p per hour to £9.78
  • The NVQ3 advanced craft rate increases by 34p per hour to £12.79
  • The changes will come into effect as of Monday 24th June 2019

Brian Berry, Chief Executive of the FMB, said “This agreement strikes the right balance as it recognises the hard work that employees are putting into their work but at the same time, it reflects the uncertainty that many construction firms are facing. This increase is above last year’s rate of inflation, according to all three of the leading indexes, and sends out a strong message to tradespeople that we value them and want to retain them. It’s no secret that economic forecasts are quite conservative for the years ahead, given the unknown impact of Brexit, but I feel this is a good compromise from the perspective of both employers and workers.”

Jerry Swain, the National Officer for Construction at Unite the Union added “Unite welcomes this agreement which recognises inflation levels from last year and the high employment levels that we have at present. With construction skills shortages impacting on the industry, a 2.75 per cent pay rise will help encourage tradespeople to remain in the industry at a time when the current political uncertainty and drops in construction output are affecting confidence in the industry. I’m pleased that BATJIC has been further strengthened this year by successfully jointly lobbying for tax dispensation on key employee expenses. It was important that we secured the dispensation from HMRC in respect of lodge payments, as this now formalises the position regarding taxation of lodge payments. The dispensation gives peace of mind to our members and ensures that they will not face any claims for retrospective payment of tax when receiving lodge payments while working away from home.”

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Over 50% need help to keep skilled workers post-Brexit

A OnePoll survey commissioned by the Royal Institution of Chartered Surveyors (RICS) found that while reception of the apprenticeship levy looks positive, findings indicate concern for the more immediate pipeline of skilled workers in the construction industry.

Findings in brief

  • 42% of construction workers feel more confidence for the growing talent pool as a result of apprenticeship levy
  • 43% have felt a positive impact from apprenticeship levy
  • However, there are still concerns over skills available in UK as 56% think Government and construction workers should help skilled workers from abroad remain post-Brexit
  • 86% of construction workers agree that businesses should focus on skills and abilities for new hires

Is the levy working?

Though the apprenticeship levy only came into force in April 2017, indicators show that it has been well received so far. 43% of construction workers have noticed a positive impact and 42% say that they feel more confident in the growing talent pool as a result of the levy.

Since the introduction of the Levy, a third (36%) have noticed an increase in the number of apprentices employed, and 30% have also seen an increase in the number of apprenticeship applicants, although 15% said they now have more paperwork to fill in. And it would seem those in the south of England are the most positive about the levy, with more than the national average reporting positive impact. This rose to almost two thirds (63%) of construction workers in London and over half (52%) in the South West.
Are apprenticeships enough?

However, while the long-term talent pipeline outlook looks promising, there are concerns over home-grown talent being able to fulfil the demand for skills needed in the construction industry in the shorter term. Output in the construction market is expected to grow over the next 12 months, yet 53% of construction workers say that labour shortages are an issue for business.

With a predicted 8% of the UK’s construction workforce made up of European nationals[2], over half (56%) of construction workers across all levels feel that construction companies and Government should work together to ensure skilled workers in the sector can remain in the UK. This rises to over two thirds (66%) in London and is most keenly felt among senior and middle managers in construction (71% and 67%, respectively).

An RICS report found that 30% of construction professionals said that hiring non-UK workers was important to the success of their businesses. And this shows when it comes to priorities for hiring within the industry.

Barry Cullen, RICS Future Talent Director said “It is great to see such a positive reaction to the apprenticeship levy from the industry so early on and RICS is working with members and employers on schools programmes, to engage and inspire more young people into surveying, to fill a more diverse pipeline of talent. Encouraging the next generation and ensuring there is fresh and skilled talent to meet the demands of the future is vital to any industry’s success, and it’s clear that the construction industry is united in this belief.

“However, with Britain set to leave the European market we must ensure that we are not left in a skills vacuum. An estimated 176,000 EU citizens are employed in the construction business, so it is vital that government and businesses work together to ensure they are able to remain or risk leaving the industry short of the people they need.”

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Residential sector looking positive

The residential sector had a particularly positive February with £1.7 billion contracts awarded, an increase of 13.1% on January. Residential unit numbers also increased – up by 5.4% on January at 9,850 units. Following residential in terms of contracts awarded was infrastructure with a 13.9% share and education with a 12.3% share.

Barbour ABI

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI highlights levels of construction contract values awarded across Great Britain. This month it shows the total value of construction contracts awarded in February 2019 was £5.4 billion which is a 0.5% decrease on January, but 10.6% higher than February 2018.

The top project awarded during February was the £250 million redevelopment of Chelsea Barracks which sees Multiplex Construction Europe provide a total of 88 residential units in a single 5 storey structure. The largest infrastructure contract was the £110 million redevelopment of the former Royal London Hospital site in Tower Hamlets to provide a new civic centre and council offices. The largest overall education contract was in Edinburgh and was the £90 million redevelopment and extension of the Darwin Building for the University of Edinburgh.

Barbour ABI

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