SPEECH BY PETER LOBBAN, FOR LONDON CONSTRUCTION AWARDS, 30 St MARY AXE,

11 OCTOBER 2005

Good evening.

With almost one hundred days since London won the 2012 Olympic bid, this is a good time to celebrate best practice in construction and environmental build across the capital. It’s a chance both to examine industry successes and look ahead to potential progress in the coming months and years.

And what an exceptionally busy period it is for construction in London. Winning the Olympics could be seen as icing on the cake given the wide range of major projects already planned or underway. Heathrow Terminal 5, the new Wembley Stadium, White City Regeneration, the redevelopment of Croydon, Kings Cross (CTRL) and the Victoria Station Upgrade – the list is long and it keeps growing. These are all major successes which we should celebrate as they benefit our industry, the capital and the country as a whole.

And they are projects in which many groups and people are playing important roles. Successful construction, in the capital and beyond, is a joint effort, and the breadth of this partnership is reflected in the range of people here tonight. We have representatives from national government, local government and community organisations. We have representatives from national federations, major firms and SMEs. We have unions and universities. It is partnership and collaboration between us all, wherever we are within the industry, which will help us make the most of the opportunities we have.

This partnership extends to developing the skills and capabilities the industry will need. And again, we have representatives a number of organisations involved in the London Construction Skills Forum here with us this evening. These include members of the Construction industry Council, the Construction Confederation, Constructing Excellence and the Electrical Contractors Association. We have representatives from further education and higher education establishments who help to develop future employees. Plus, I’m delighted to say, we welcome colleagues from other Sector Skills Councils, Assetskills and Summitskills. This really shows the range of people playing their part in developing construction skills within the capital – working together to help the industry meet its current and prospective skills needs.

And skills development is a challenge on which we are all focused. So before we celebrate the success that people in this room have already achieved, I would like to take a few minutes to consider the need in the context of the growth we are experiencing, in the capital and beyond.

The facts and figures show that our industry is in rude health. It is one of the most productive construction industries in the world. It has seen sustained growth over the last 10 years with both output and total employment increasing by 30% over that period. In Labour Productivity (LP) the UK is within 15% of the performance of the best (US) and in Total Factor Productivity (TFP) it is comparable with the US, France and Germany.

The industry is also projected to grow by 2-3% year-on-year. The latest Construction Products Association Forecasts are predicting that construction output growth will slow to less than 1% in both 2005 and 2006, although there will be a turn around in 2007 when it is forecast to increase to over 3%. Generally, the construction industry continues to out-perform the economy.

There are many factors contributing to that anticipated growth. For example, public sector procurement is likely to top £16bn over the next four years. The industry appears to face strong demand over the next five to ten years, with prospects underpinned by Government aspirations for health, education, housing, transport and other infrastructure.

Plus, of course, we have the significant demands on our industry and resources within London for the projects I’ve already mentioned, of which preparations for the 2012 Olympics will be the most high profile. It offers an unparalleled opportunity to show the country and its people in the best light. It is the proverbial ‘shop-window’ for our goods and services. Transport and infrastructure projects aside, there is still a build programme worth over £1.2bn that needs to be ready when the torch is lit in 2012. Although this is only a relatively small proportion of construction spend – the Olympics represent about a 1.4% increase over the next seven years – there is a broader social and political challenge to deliver on time and to budget.

This growth means we have much to celebrate, and we will be looking at specific successes during the course of the evening. But with growth comes the need for sustained skills development. Training and development are vital for employers, helping them build the workforce they need today whilst helping them prepare to meet the challenges they will face tomorrow. It can be difficult for any employer to focus on such needs when immediate demands are so pressing, so we must do what we can to raise awareness of the opportunities and assistance available, and to make it as easy as possible for employers to access training resources.

We all know that training and development are vital for employees too. As I look around the room today I see a number of apprentices who are taking their first steps on the road to a long-term career within the construction industry. Both you and your colleagues within the industry want to continue developing skills and experience so you can play an ever greater part in your business, and work on new and exciting projects. Our industry must give you that opportunity, not just for your benefit but for the benefit of your employer and the industry as a whole.

As Sector Skills Council for the industry – working with employers and our other partners – CITB-Construction Skills is committed to helping the industry rise to the challenge. We are proud of, and committed to, our role within the London Construction Skills Forum, and the part that this body continues to play in helping nurture the industry’s growth within the capital. Plus we are working with partners across and beyond the industry, including the organisations represented here today, to stimulate further growth across the country.

For example, the new Construction Skills Network, which I will chair, will ensure for the first time that the industry and its clients know what we need to deliver in terms of skills and recruits. We will do this by creating a single set of industry-owned figures to quantify exactly what the skills needs are, and whether or not current education and training provision, learning and qualification frameworks and funding models across the UK are satisfactorily meeting them, or exactly where we need to invest further.

The CITB-ConstructionSkills OSAT programme is now going from strength to strength, available through mobile testing centres at sites across the country.

We are developing qualifications informed by industry consultation, and have a new agreement with education providers and the qualifications regulator about what our qualifications need to look like to be of use to us in industry.

We are also leading industry efforts to raise awareness and understanding of our industry and the value we deliver, communicating with stakeholders and the media, using commentary and case studies to show the contribution we are making to society.

CITB-ConstructionSkills’ ‘Positive Image’ recruitment campaign, which aims to attract high-quality new recruits to the industry, and to improve diversity in the workforce, launched in April 2005 is achieving excellent results so far, judging by the media coverage and response from potential new recruits. A number of university students are just beginning construction degree courses supported by the Inspire Scholarships scheme, funded by employers together with CITB-ConstructionSkills, which we also launched in April.

We are committed to these projects and continued partnership with all of you here today to build on current progress and stimulate sustained growth in construction within London and beyond. And, as signified by the achievements we are here to celebrate, construction in the capital has a bright future. We should be excited and inspired by the opportunities ahead, and make sure we have the right people, with the right skills, to seize those opportunities. Partnership holds the key here - collaboration between the different types of organisation, and the wide range of people, we have here today will be an important platform for this success. We all need to play our part in delivering the future for our industry and for the country as a whole.

Thank you – and now on with the celebrations!