Learn lessons from the past

CITB-ConstructionSkills, the industry Training Board and Sector Skills Council has issued a warning, to Government and industry, encouraging them to learn lessons from the past and take steps to prevent a long term skills shortage of construction workers.

The warning came as new figures from the Construction Skills Network (CSN) revealed that the latest spending cuts risk plunging the already hard-hit construction industry back into recession.

At the beginning of the year the public sector accounted for 30% (excluding PFI) of the construction sector’s business, but in recent weeks the Government has announced planned cuts from building projects, including the high profile Building Schools for Future (BSF) programme, which amounts to £6.8 billion over the next five years.

Annual CSN figures released in January had forecast 38,000 job losses in 2010 as the industry makes a slow and painful recovery from the recession. However, a new revision to these figures shows that these severe cuts could put a further 68,000 jobs in construction at risk from 2011 through to 2015 as well as putting further strain on the number of places available for apprentices and graduates. These latest figures come on the back of more than 144,000 workers in the UK’s construction industry losing their jobs between 2008 and 2009.

The cuts risk a prolonged period of recession for the building sector, rather than the slow and steady return to moderate levels of growth that CSN research predicted earlier this year.

As well as the planned cuts of £6.8 billion, there are fears thatthe prison-building programme may also be scrapped after Justice Secretary, Kenneth Clarke, said that the prison population should be reduced; and a potential£450 million cut byThe Homes and Communities Agency could haltKickstart, the scheme to restart stalled construction sites, which in turn could bring to an end the ‘Local Authority New Build’ scheme to revitalise council buildings.

Judy Lowe, Deputy Chairman of ConstructionSkills, said:
“Obviously any Government seeking to balance the books has to look at the procurement of major public programmes.  Most people in the industry would agree, for example, that BSF has been slow, costly and Byzantine in its complexity.  But these projections make for bleak reading, and frankly, they may only be the start. 

“What we'd prefer, is to work with government to make sure that public sector programmes are procured more cost-effectively.  That way  people get their desperately-needed schools and hospitals, and we don't risk putting an additional 68,000 people out of work.  There is very little point in saving public money with the one hand whilst paying people to be unemployed with the other."

The industry currently supports some 8% of GDP and provides employment for large numbers of graduates and apprentices. Stability in levels of long-term investment plays a critical part in protecting employment and skills. 

Experience of past recessions indicates that those leaving the industry now will be highly skilled workers who will choose not to return to the sector when the recovery comes. The result could be chronic skills shortages in craft, technical and professional occupations which will impact on the industry’s ability to effectively contribute to the UK economy for years to come.

Up to now it has been the private sector that has borne the brunt of the recession. Private housing suffered its second consecutive double digit decline in output in 2009. Public non-housing work such as BSF was generally maintaining the industry and was likely to provide a significant stream of work through to 2011 helping to drive the industry’s recovery.

As well as the UK-wide schemes mentioned there are a number of regional schemes that have been scrapped or suspended under the new Government including the£450 million North Tees and Hartlepool hospital build, Leeds Holt Park Well-being Centre, the £94m Birmingham Magistrates Court, £12m Sheffield Retail Quarter, the £23m Kent Thameside Strategic Transport Programme and the A14.

The CSN research provides sector skills intelligence to drive a more effective skills agenda at national and local levels showing how construction is crucial to economic prosperity.

ENDS 

Notes to Editors

About the Construction Skills Network
The CSN is co-ordinated by ConstructionSkills in conjunction withExperian, who provide information and analytical services.  The CSN has over 700 members (including representatives from Government, Federations and Employers) who attend observatory meetings and contribute their skills and knowledge. 

About ConstructionSkills
ConstructionSkills is the Sector Skills Council (SSC) for the construction industry. It is a partnership between CITB-ConstructionSkills, CIC and CITB Northern Ireland. It is UK-wide and represents the whole industry from professional consultancies to major contractors and SMEs. 

Established as an SSC in 2003, ConstructionSkills is working to deliver a safe, professional and fully qualified construction workforce. All three partners are committed to working together to deliver industry-led skills and training solutions through the Sector Skills Agreement for construction. We work to negotiate the best partnership and funding deals for the construction industry to help raise standards and we develop the skills products and services employers need.

The construction sector is central to the UK economy, generating over 8% of UK GDP and with a turnover of more than £210bn a year.