Speech by Janice Roach at the Launch of the Scottish Construction Skills Survey Glasgow 27 May 2004
First of all may I say thank you to CITB-ConstructionSkills for the invitation to speak today at the launch of the Scottish Construction Skills Survey 2003. I am delighted to be given the opportunity to talk about the contribution the Scottish Enterprise network, and in particular Scottish Enterprise Glasgow, is making to the construction industry in Scotland.
To put this into context, Scottish Enterprise was tasked with taking forward a construction initiative in Scotland in October 2002, just over 18 months ago. This involved a group made up of representatives of clients, industry and government being convened to prepare a three-year construction strategy and a longer-term vision for the industry. The group met between October 2002 and July 2003 to develop its report on modernising the construction industry in Scotland. Their recommendations were published in ‘Achieving Construction Innovation and Excellence in Scotland’ and subsequently endorsed by the Minister in autumn last year. The report highlights the importance of construction to the Scottish economy. The conventional view of Scottish construction suggests that the industry generates £6.5 billion in sales and turnover and employs 150,000 people in approximately 12,000 companies. Scottish Enterprise used a practical tool, a cluster map, to capture the complexity of Scottish construction and by mapping the entire supply chain estimated that the true contribution of construction to the Scottish economy is closer to £10 billion per annum but the economic value of construction is far greater than its monetary value – it provides the infrastructure which underpins the whole economic and social wellbeing of the nation. Scottish Enterprise Glasgow was asked to take forward the Modernising Construction agenda on behalf of the Scottish Enterprise and Highlands and Islands Enterprise networks.
The report itself contains around 20 recommendations under the headings of procurement, workforce development, image and awareness and best practice designed to achieve a step-change in the performance of the industry in Scotland. However, three prime and interdependent recommendations were highlighted as having a strategic significance to create the conditions necessary for success on the wider front.
The first of these three key recommendations was to establish a Scottish Construction Innovation and Excellence Forum. This has now been set up, and re-named the Scottish Construction Forum, under the independent chairmanship of Graeme Millar, who is also the current chair of the Scottish Consumer Council, with representation from across the industry who can bring about the desired change within the construction sector. The key players within the Forum are the Scottish Construction Industry Group with representation from each of their five colleges – Professionals, Contractors, Specialist Contractors, Trade Unions and Suppliers; the Scottish Construction Clients Forum, Scottish Building; the Scottish Decorators Federation; CoSLA; the Health and Safety Executive; Communities Scotland; Scottish Higher and Further Education; Scottish Enterprise; Highlands and Enterprise; Argyll and Bute Construction Excellence; CITB-ConstructionSkills and two independent members from the private sector. In addition the Scottish Executive and Constructing Excellence attend as observers.
The second key recommendation concerns setting up a construction innovation and excellence centre for Scotland. Following an independent options study, the Forum agreed at its last meeting on Monday of this week on how this would be taken forward and we aim to make a formal announcement on this by autumn this year. The third key recommendation, the publication of a plan of public sector construction projects which accounts for over 50% of construction output to facilitate workload continuity is being progressed by the Scottish Executive. This should create the confidence needed for companies to plan and manage construction activity over a longer-term horizon. In return the industry is expected to change the practices that emanate from short-term horizons. The remainder of the recommendations have been prioritised by the Forum within a three-year timeframe for action. Scottish Enterprise Glasgow, in addition to representing the Scottish Enterprise network on the Forum, also provides the secretariat service.
We are also directly supporting a number of projects of significance to the construction sector. The Construction Licensing Executive, the Scottish version of Quality Mark initiated by Scottish industry, aims to raise industry standards and protect consumers from rogue traders. We are providing funding to assist their marketing campaign aimed at domestic consumers and traders. We are funding two co-ordinator posts for Scottish Demonstration Projects and are supporting the Pulling Together website until the Scottish Construction Innovation and Excellence Centre is operational.
As I mentioned earlier, one of the themes within Achieving Construction Innovation and Excellence is workforce development. As a skills and learning practitioner I am a firm believer that the most valuable asset of any organisation is its people and this applies regardless of size or whether the organisation lies within the voluntary, public or private sector.
In parallel with the work being undertaken by the Modernising Construction group, Scottish Enterprise Glasgow developed a £25m Construction Skills Action Plan for the City covering the five-year period 2003-2008. The action plan is our response to alleviate the construction skills shortages currently being experienced by the industry and which will be exacerbated by the planned new investment such as the Glasgow housing stock transfer, the largest in Europe to date; the M74 extension, school and hospital building; and major developments such as Glasgow Harbour, the Financial Services District, private house building and other commercial developments. The Glasgow plan, along with a further £10 million to support similar activity across the Scottish Enterprise network was approved last year. This, outwith our national training programmes such as Training for Work and Skillseekers, is the largest single skills project to date approved by Scottish Enterprise. Scottish Enterprise Glasgow is responsible for leading this work in Scotland.
The allocation of financial resources for skills development is to be welcomed however money is only one third of the equation. Partnerships will be critical if we are to achieve the ambitious targets set out in the plans for Glasgow and the Scottish Enterprise network as a whole. At a national level public sector organisations such as Jobcentre Plus will play a major role as will the new and emerging Sector Skills Councils, including CITB-ConstructionSkills. For each Local Enterprise Company within the Scottish Enterprise network local partnerships will add value and bring success. For Glasgow, engagement with the Glasgow Housing Association, City Council, the Glasgow Construction Employers Forum and our unique network of Local Development Companies will be essential.
One example of partnership working at its best can be seen in Construction Glasgow. This project was developed following wide consultation and essentially provides a one-stop shop for construction employers to recruit and retain suitably qualified staff. All of the Glasgow based organisations I have just mentioned – Glasgow Housing Association, Glasgow City Council, the Local Development Company Network along with Careers Scotland and Glasgow’s Further Education Colleges – with Jobcentre Plus as the lead partner are delivering this service and have just celebrated placing their 200th client into work.
A third element in the equation along with funding and the commitment of partners to work together is robust and reliable data on the nature and extent of recruitment difficulties, skills gaps and training activity within construction employers. The report being launched today, the Scottish Construction Skills Survey for 2003 provides information that will help all those involved to address the issues being faced by the sector in today’s marketplace in developing the current and potential future workforce of the industry.
Whilst the report contains much that is positive it does paint a picture that indicates that much still requires to be done in relation to skills and training. I’ve selected a few headline examples of this from within the report.
Firstly, in relation to Investors in People, only 5% of all construction employers had achieved IiP compared with an average of 17% for Scotland as a whole; in assessing skills gaps at an overall level, a total of around 6,200 skills gaps were reported – equivalent to 6% of the total workforce – with the most commonly cited implication of skill gaps being increased operating costs. This direct cost on the bottom line was also demonstrated by the fact that just under a fifth of employers stated that skills gaps were causing them to lose business to competitors or that the presence of skills gaps was having a ‘strangling effect’ on their ability to introduce new working practices, new IT or delaying the development of new products and services; over half of hard to fill vacancies were seen to be a result of issues relating specifically to the skills sets of applicants, just over third as a result of work experience that applicants had had and a quarter as a result of the qualifications held by applicants. The issue around qualifications is particularly marked when compared to results from employers across the whole Scottish economy where only 9% of employers cited lack of appropriate qualifications as a reason for a hard-to-fill vacancy. This indicates that qualifications play a greater part in construction recruitment than in other sectors; again, at an overall level half of construction employers had offered any training at all and this figure is well below the average for Scottish employers across all sectors which stands at 64%. It is important to stress that these are very bold headline statements and obviously need to be taken in the context of the full report as there are marked differences between large and small companies and also geographic variations in results.
But the report will be a very valuable tool for the Scottish Enterprise network to update our Construction Skills Action Plans and ensure that we are delivering what the sector needs to develop the full potential of its workforce.
Finally, as CITB-ConstructionSkills is hosting this event it would be remiss of me not to mention some of the skills development activity and joint working we are currently undertaking in relation to our Construction Skills Action Plans. Sector Skills Councils are independent, UK wide organisations developed by groups of influential employers in industry or business sectors of economic or strategic significance. They are employer-led and actively involve trade unions, professional bodies and other stakeholders in the sector. For us therefore, an ideal partner in delivering our Construction Skills Action Plans. We have delivered a successful pilot project in On Site Assessment and Testing and with the help of CITB-ConstructionSkills intend to roll this out as a national programme in the near future and aim to substantially increase the existing target for a qualified workforce.
I look forward to further developing our partnership for the overall benefit of the Scottish Construction industry.
