Speech By Sir Michael Latham To CITB (Ni) Conference:
Building on Partnership
Thursday, 11 March 2004

It is a real pleasure to be back in Belfast to support your recognition of 40 years of CITB Northern Ireland. You have good cause today to look back with satisfaction at what has been achieved over a generation. But you will also be looking forward with anticipation to the future, and the challenges that the next 40 years will bring. But first, congratulations for all that you have done since 1964. Well done indeed – and now you will want to build upon these firm foundations.

I doubt whether those who created CITB 40 years ago, both here in Northern Ireland and in Britain, in the year in which Harold Wilson succeeded Sir Alec Douglas Home as Prime Minister, gave much thought to what the world would be like in 2004. But if they could have gazed into a crystal-ball they might have been surprised to find that one of the enduring features of the landscape was – themselves! We are still at it when virtually everything else has changed.

The industrial base of the UK has been transformed out of all recognition; many of our cities, not least Belfast, have undergone remarkable transformations. Documents whizz across cyberspace between here and almost anywhere else in the world. In those days they would have at best taken several days to cross the Atlantic and possibly a few to cross the Irish Sea. Just think back, perhaps nostalgically for busy constructors, to a world with no mobile phones, e-mails, faxes, CAD drawings, lap-tops or PCs. That was 1964.

Amidst all this change, including the massive switch from manufacturing to service-based industries, and the globalisation of the economy, the construction sector remains a very significant force in the economy both of Northern Ireland and the whole of the UK. Construction remains a vital source of employment, particularly throughout both Northern Ireland and the Republic. Whilst in every other sector except engineering construction statutory levies have disappeared, in construction they have endured. They have done so because they are a crucial part of the industry’s ability to develop and plan for the future, and the industry itself demanded to keep them at a time when they were being scrapped in most other sectors.

I want to talk mainly about the future today. This is appropriate. The theme of today's conference – Building on Partnership – is forward-looking. But I also want to examine the foundations, and how we have built upon them.

The creation of ConstructionSkills formalises the long standing and close partnership between the two CITBs, and brings in the CIC. But we should not forget that CITB Northern Ireland and its counterpart in Great Britain have been collaborating very effectively throughout their history. That is why the title of the conference is exactly right. We are not beginning from scratch, but are enriching a long continuing relationship.

A second way in which ConstructionSkills will be building on what already exists is through its utilisation of existing networks. Each of the three constituent partners of ConstructionSkills brings its own links with it. It is a pleasure to see many of our major partners here in Northern Ireland represented today - the Department for Employment and Learning, the Construction Employers Federation, Rethinking Construction Centre, the further and higher education sector, private training organisations, and professional associations.

Thirdly, working in partnership has been a growing theme of the construction industry throughout the past decade. Perhaps “Constructing the Team“ helped in that regard, and all the work which has gone on since to develop best practice. The more effectively we can work together – clients and consultants, main contractors and specialist contractors, employers and trades unions, colleges and training providers, government and industry, ConstructionSkills and SummitSkills – the more assured the future will be for our industry and the better for the UK. Not just better economically, but better in other ways too.

Why should that be so? Why should the success of our industry matter, except to us in it? Construction touches the lives of everybody; not simply those employed in it or in ancillary industries, but all those who take an interest in their environment, who work in the education or health service and who may be awaiting new facilities, who work in industry or commerce and await improved transport infrastructure, or who are involved in local government and want to see the regeneration of their local community. That places a huge responsibility on construction. It goes far beyond getting the right bricks in the right place at the right time and at the right price. An industry which works effectively to satisfy its clients and the wider community will be successful. If it forgets them, or is blind to its wider responsibilities, it cannot expect public or Government support.

The demands being made on the construction industry in Northern Ireland, as across the UK, are considerable. The spend on infrastructure announced as part of the new Strategic Investment Programme under the Northern Ireland Executive’s Reinvestment and Reform Initiative will require us to invest in new skills and to ensure that traditional ones are renewed.

Before I move on to how I see the work of ConstructionSkills developing and the main challenges facing our industry, I want to tackle one possible misconception about the creation of ConstructionSkills. When I praise existing partnerships and then explain the significance of ConstructionSkills in bringing different organisations together, I could be accused of having my cake and eating it. After all, the sceptic might say, if you’re all working together so well already, why set up a new organisation to bring you all together? If it ain’t broke, why try to fix it?

I can reply to the sceptic, “I’m glad you asked me that question”, just as Harold Wilson used to do on TV 40 years ago, but in his case as a means of answering another question rather than what he had been asked. It is certainly a question we asked ourselves. Even before we decided to join together to ask the Secretary of State to license us as a Sector Skills Council, we had to address that point. We didn’t think it was in the least broke. But we did think that the agenda and our scope could be widened.

The most direct answer is that in order to achieve the influence with Government that SSC status brings, we have to be able to show real meat. It is not enough to be capable of working amicably together in an ad hoc way. We must do so in a planned and permanent fashion. We also have to convince Government and industry that we have sat down together and jointly identified and assessed the challenges facing the industry and begun to work out practical ways of meeting those challenges.

If we are looking for a variety of other organisations to work with us in partnership, we cannot expect them to deal with a spread of different organisations too. There has to be a single reference point. They need to know that we are all signed up to the same goals, and working single mindedly to achieve them.

But even more crucially, Government needs to be convinced that we have a clear set of objectives, and a fully worked out plan for success. Otherwise they will not be willing to give us a significant say in how public money is spent. Given my own background, as a Westminster MP for 18 years, I am particularly concerned about the need for full accountability to Parliament; but in any case where large sums of taxpayers’ – or levy payers’ – money is being spent, it is absolutely right that those who foot the bill can see how their money is being used and who, ultimately, is responsible for it. Incidentally, you may be amused to know that I was on the Public Accounts Committee for nine years, and personally wrote, 20 years ago, some of the most critical sections of the report on the De Lorean affair.

Despite the necessary constraints and controls, I hope that all of you who work with us in ConstructionSkills will not find us excessively bureaucratic. Yes, we must be able to account for what we do – that is a requirement for a non-Departmental Public Body. But we must also be effective. We have sought to hit the ground running, by not spending too much time or money worrying about job titles or the minutiae of organisational structures. We’re not moving in to new offices or spending lots of money on new literature. And we didn’t ask consultants to come up with a new name – one of those abstract nouns so beloved of corporate UK, which tell you nothing about what the organisation does. We will do what it says on the tin. We are about construction skills of all kinds – full stop.

What then, to answer another of the sceptic’s questions, is ConstructionSkills for? And how will anybody know if we have made a difference? Well, it is our job to make a difference and ensure that the industry should see it.

First, it is our task to draw government, funding bodies and educational insitutions together in such a way that policies on education, training and skills accurately reflect

the views of the industry, its employers and its workforce. Our Partnership document in Northern Ireland already seeks to do this. We shall build on those excellent foundations.

On the UK stage, we are joining the Sector Skills Development Agency’s ‘Skills for Business’ network. It will create a powerful voice for industry, including employers, employees and trades unions. This will also open the door to increased influence over the funding of educational and training initiatives.

Secondly, we will be able for the first time to be involved in education and skills training for the whole industry, right across the UK: architects in Armagh, bricklayers in Brechin, carpenters in Carmarthen and demolition experts in Doncaster. This means we can adopt an integrated approach to recruitment and training. That’s an important step forward at a time when skills shortages not only affect the craft sector but graduate entry to the industry too. And we will be looking hard at Northern Ireland’s success in attracting students to university construction degree courses – a point to which I will return in a moment.

One illustration of our new partnership with CIC is the launch last autumn of our major national schools design competition, Creative Spaces. The competition, which incorporates CIC’s Design Quality Indicators, aims to encourage young people to become the builders, architects, engineers and surveyors of the future. So far around 450 schools have signed up, including around a dozen in Northern Ireland.

Thirdly, we intend to use our new status to help the industry to improve its competitiveness. We will do so by increasing both funding of, and emphasis on, management and supervisory training, but without minimising our work to bring new entrants into the industry or to upskill the existing workforce. It would be disheartening to achieve our goal of a fully qualified and certified workforce by 2010, and to have hit our recruitment targets, only to see UK companies losing out to overseas competitors because their management processes are not world class in an increasingly unified global economy.

As well as avoiding unnecessary bureaucracy, we will also beware of being control freaks. Having a new remit which encompasses the whole industry and the whole of the UK brings with it some particular responsibilities. I am thinking especially of the need to work with the grain of national and regional differences, rather than adopting a one-size-fits-all approach. We can all learn from each other.

For example, there are differences in the education system here in Northern Ireland compared with England and Wales and also with Scotland. One very specific divergence in recent years has been the success of the student recruitment programme in Northern Ireland. The introduction of the construction professional development programme has made a significant contribution and it may be that there are lessons which we can learn more widely from your success. Certainly in the rest of the UK, graduate recruitment to the industry has been falling, though 2003 did see some improvement. For this reason we made a particular point of targeting graduates in our main “Positive Image” advertising and public relations campaign last summer. Perhaps our recruiting drive helped – but we shall know more next year, as we reinforce the message.

We also need to confront the specific challenges which the UK construction sector faces and how ConstructionSkills will contribute to overcoming them. I can’t promise to look ahead over 40 years – nor would it be useful to do so. I would be 101 in 2044. and I doubt that I will still be lecturing then! But at least we should plan for the initial five-year period of ConstructionSkills’ licence.

Our major challenge is recruitment. Activity in the industry is now back to the levels last seen in the late 1980s, before the downturn of the last decade. The indicators are positive for the immediate future, too. The housing sector remains buoyant, and the UK government is encouraging further growth, though this will obviously differ in its intensity from country to country within the UK and region to region. At the moment the industry is struggling to build the numbers of new homes projected as necessary to meet needs and demands.

There is also a substantial and growing programme of public sector projects, renewing outdated schools, social housing and infrastructure. New commercial work will depend crucially on the overall performance of the economy, which may vary significantly within the UK. In many sectors the market looks promising. The growth of public-private partnerships and other procurement routes leaves UK firms well-placed to win new work in a variety of ways.

The current high level of public sector activity is projected to continue, or even increase, over the next couple of years. So the other constraints on the sector take on added importance. In addition to the usual turnover in employment, the age profile of our industry has changed over the last decade. There is a larger proportion of employees in the 30-39 age group in construction than in the workforce generally, reflecting low take-up in the 1990s when activity was reduced. This is true both of manual and non-manual workers.

Replacing those who are leaving the industry and recruiting new people to match the demands on it are made even more complex by the declining birth-rate and the policy of the Westminster government to encourage 50% of young people to experience higher education. Of course that pressure for higher education offers advantages to construction, as well as raising 16+ issues. Some of the students will attend construction courses. Others will move into the industry later, if we persuade them of its creativity and attractions. But we will need to ensure that we attract young people into apprenticeships as well.

There have been many false dawns in the history of vocational education. I do very much hope that the Tomlinson review (in England) will begin to make an impact on the vexed question of parity of esteem between academic and vocational courses. There are other issues to address, not least the whole concept of a 14-19 phase of education with a fixed cut-off point at 18 or 19. This doesn’t seem to make sense at a time when there is so much emphasis on lifelong learning. In construction it might be better to talk about 14-30 rather than 14-19, but also a continuing need to upskill throughout one’s working life. Whatever new structure emerges, it is vital that Modern Apprenticeships can fit comfortably within, or if need be alongside, it.

We are also keen to strengthen and broaden the vocational route into higher education. At both a strategic and operational level we are key stakeholders in the overhaul of the learning and skills sector signalled by the Success for All Initiative. We are committed to supporting the roll-out and development of the Construction Centres of Vocational Excellence network. We are working with a number of institutions to develop progression routes for Advanced Modern Apprentices into higher education. We are also working closely with universities through the ACBEE partnership to demonstrate measurable examples of good practice which will encourage further the industry and higher education interface.

Our influence with Westminster government on the future of 14-19 education, and parity of esteem for vocational courses, will be weakened if we cannot put our own house in order over the employment of women and ethnic minorities. It is difficult to make the case for construction having a larger share of those leaving full-time education when our record of appealing to people other than white males is so meagre. According to the Labour Force Survey, the employment of women in construction actually fell, proportionately, by around a fifth in the decade up to 2002, and is a shade below 10%. But even that figure is misleading. Construction ultimately happens on site. The vast majority of women in construction are employed in non-manual occupations. Only 1% of manual construction workers were female in 2002. Compare this with 45% of women in the overall workforce.

The story in relation to people from ethnic minorities is not much better, but at least the figures are moving in the right direction. The proportion increased by more than half from 1992 to 2002 to stand at 2.4%, but still well below the 6.3% of the total working population. Attracting new workers from these groups must remain a high priority for our industry, and CITB-ConstructionSkills has specific recruitment targets.

It would be quite wrong to see only problems and negative features. Our Positive Image campaign last year reached an estimated two-thirds of all 13-19 year olds and their influencers, using a wide range of targeted and mass media. We are getting better at talking to young people in language which resonates with them and at profiling role models for young women in particular who are enjoying successful careers in construction. Each year, National Construction Week involves tens of thousands of school-age children in activities designed to heighten their awareness of construction and increase their knowledge. Through our STEP into Construction programme, CITB-ConstructionSkills continues to try and ease the path of non-traditional applicants into a construction career.

Our general theme as ConstructionSkills is partnership. We must always apply it specifically to training. Partnerships can bring about a more even spread of training across the country. Firms of all sizes and at all stages of the supply chain can share responsibility for bringing on young talent, through more project- and site-based solutions. This helps to overcome short-termist views, especially from those specialist contractors who may not feel confident about their future order books and so hesitate to train apprentices. We need to give them a sense of assurance about taking on new recruits and apprentices. As an example of such confidence building, in November 2003 we launched a new partnership in England with the Housing Forum called Sustainable Training for Sustainable Communities. It now has 17 long-term inner-city refurbishment projects signed up. We hope it will be a blueprint for many more.

A key factor in this initiative is that the client commits to a 5-10 year contract, with the stipulation that a training element must be included. That leads to a stable and workable environment in which to take on and train new entrants to the industry of all ages. Sustainable Training for Sustainable Communities shows that clients and contractors can share responsibility for training – a genuine partnership approach.

ConstructionSkills is itself a partnership. In each country in the UK and each region we look forward to deepening the joint working which we already carry out with our main partners. In England, we have concluded a Joint Planning Agreement with the Learning and Skills Council, as a prelude to what we expect will be a full Sector Skills Agreement by the end of this year. We see these as a precursor to analogous agreements elsewhere in the UK. I hope you will be able to have a similar agreement here in Northern Ireland.

Our task is simply stated, though complex and challenging to achieve:

• To improve the targeting of public and employer-funded resources to develop skills in the construction industry
• To match better the demand for skills and training supply
• To ensure that qualifications and training programmes are fit-for-purpose and capable of responding flexibly to the industry’s changing demands.

Through the collaborative approach I have described today, I am confident that we can achieve these objectives across the industry and across the UK. That will benefit the industry, it will benefit those who work in it now and those who will join it, and it will benefit the UK. Our industry affects everybody. It is essential to our country. It employs 2 million people. It is in every parliamentary constituency, in every local authority, and its welfare should be a major concern for its largest customer, the Government.

We have a unique opportunity to make our industry a world beater with the best workforce, well trained, motivated and rewarded. We will seize that opportunity and we will achieve real and lasting results.