19
Examination of witnesses
Jonathan Mitchell, Simon Rawlinson and Sam Egan.
Q15 The Chair: Welcome to the House of Lords Built Environment Committee. We have just started a new inquiry on new towns and expanded settlements as part of our broader inquiry into the Government’s plans. Last week we started a session—that we are calling Bricks and Mortar—about some physical and logistical issues around building these new towns, what stops them and how we get them going.
Today we have two sessions. The first is going to be on construction skills, and we have three witnesses before us. First is Sam Egan, who is the group director of construction at the Bedford College Group. Next we have Jonathan Mitchell, the deputy director of Skills England. On the end there is Simon Rawlinson, the deputy chair of the Construction Industry Council. Thank you very much to all three of you for coming along today.
As you know, we have a series of questions scattered among the team here. All I would ask is for witnesses and colleagues alike to keep questions and answers as short as possible. If you do not know the answer, please do not feel compelled to fill the air. Equally, if you would like to write to us after the meeting with some additional information, please say. That is absolutely fine for us.
Lord Bailey of Paddington: Good morning to all our guests. I am going to start with Jonathan and then come to our two other guests. To what extent will shortages of construction skills impact the successful delivery of new towns and expanded settlements in the short and long term? Where are the shortages most acutely felt in the sector? Is there a distinction between technical and professional skill?
Jonathan Mitchell: There is no question that skills shortages are a real delivery risk for new towns, expanded settlements and so on. The challenge is not just the number of people entering construction; it is about the right mix of skilled trades, higher technical specialists and professional roles across the whole piece. Our job at Skills England is to make sure that we are providing the right evidence and maintaining the employer-led occupational standards that lie at the heart of the skills system that drive apprenticeships, technical qualifications and so on to make sure that what people are trained in really does the job for industry.
As you say, there is a significant skills challenge out there at the moment. From the research carried out in the annual skills report by Skills England, about 493,000 additional workers will be needed in construction priority occupations by 2035 and a further 595,000 replacement workers will be needed over the same period. That is a demand of just over 1 million workers. About 59% of those will be needed at levels 2 or 3, with about 41% at level 4 and above. It is a significant challenge with a range of dimensions to it.
There is a distinction between the technical trade and professional skills but our view and the approach that we are taking is that these are profoundly interdependent. No new town can come into being without the right mix of both. We 100% recognise that the skills shortages are already acute in construction but the work that is going on now means that the future does not have to look the same as right now. Some activities that we are undertaking at the moment are aimed at addressing some of those challenges.
Lord Bailey of Paddington: Sam, do you agree there is a shortage and does that affect what you try to provide on a daily basis? Are you responding to new courses and new materials needed? Does the imposition of new technologies mean a lower or higher level of skill is needed?
Sam Egan: I agree; that is my response to the first question. In terms of FE provision that we are developing at the moment through our construction technical excellence college programme, which Bedford College is a lead for, we are looking really closely at where that demand is. We know now that demand is outstripping supply at the moment so our focus is looking to employers and industry to ask what they actually need.
At the moment the feedback that we get from employers is that the qualifications and training that our learners are receiving are not good enough to be employable as employers would wish them to be. We are looking to plug those gaps across the network and make sure that our learners are leaving site-ready; that is the main thing. Some challenges we have in FE are obviously around capital funding and space to deliver those qualifications.
There is a variability in funding approaches through devolution that we are trying to grapple with at the moment to make sure that that funding is being channelled in the right way. One of our key challenges is around teacher recruitment for those specific courses. Around 17 in 100 teacher vacancies are in construction at the moment so we are doing a lot of work to try to rectify that challenge.
Lord Bailey of Paddington: I have one small additional question for you. Is it hard to fill your roles? I do a lot of work with young people and they are desperate to find a future.
Sam Egan: It is hard to fill construction teacher roles because the challenge is the salary; in further education they are not competitive to industry. The work that we try to do is go out to industry, speak to industry experts and say, “Have you thought about giving back? Have you thought about delivering a masterclass or coming to speak to students about careers in construction and what is out there?” It is about making sure we are bringing as much of that industry expertise into our classroom as possible.
Lord Bailey of Paddington: How about attracting students?
Sam Egan: We have no problem in attracting students. Some 56% of colleges have a waiting list for construction courses at the moment.
Lord Bailey of Paddington: I will come to you, Simon. How is the industry seeing this? Are you helping enough? Are you just waiting at the end of the line with arms open expecting fully trained, fully prepared, free staff, or are you trying to lean in and help provide for the future of the industry?
Simon Rawlinson: Certainly not. Before I answer that I will just make a couple of observations about the overall question. First, the challenge around skills for new towns has to be viewed in the context of the wider capital investment programme for the UK. This then becomes a participation choice for organisations that the CIC represents from the point of view of both the institutions and, for example, my employer. Do we prioritise new towns, investment in net zero infrastructure or involvement in defence? Viewing the new towns programme in isolation is a risk, particularly in the skills sector.
We see the new towns programme as a particularly interesting opportunity to apply the new skill sets that the industry needs. If one thinks about new towns, they require a multidisciplinary approach that is going to be focused on long-term delivery and is people-centred, for example. If one thinks from my surveying background, this requires a long-term investment in patient capital rather than what you might describe as the quick return from for-sale housebuilding. It represents a really great opportunity for the professions to develop those new skill sets and expand our offer to the wider population with the idea that people can see themselves reflected in the professions that are working on these programmes.
I am going to make one final observation. It is the professions and the management grades that are expected to see the greatest level of growth over the next three years. The average growth that the CITB has come up with is about 1.6% over that period. For the professions it is somewhere between 1.9% to 2.2%, with architecture growing the fastest, and that very large group—the cadre of senior managers and executives—is 1.9%. The challenge is not necessarily just in the skills, which are very important, but also the ability of the industry to organise itself to deliver effectively.
Q16 Lord Bailey of Paddington: When you look at the future, how are you able to support people further upstream in colleges and how do you represent the real needs of your members? Are your members saying, “We want people right here, right now, with traditional skills”? Is that their biggest ask? Or are they saying they would like the development to deal with new technologies and this new town situation that is coming down the line?
Simon Rawlinson: That is a very good question because what you are describing there is the dynamic between accreditation of courses and the needs of the market. There are probably things at two or three removes there. There is a later question around high technology and that is effectively developing in the studio on projects in real time. To some extent you have people who are being trained—who will not be doing that work for five or seven years perhaps, depending on their professional career trajectory—being brought into degree courses that need to catch up to that.
To some extent, they are then dependent on being accredited by the institution. There is a lag there and that is a very important consideration, particularly given the long-term nature of the development of new towns. That creates an opportunity so we can actually plan these things over a period of time but it also creates a challenge from the point of view of scaling.
Lord Bailey of Paddington: Quickly back to Jonathan, are you losing professional staff at the top? When we built the Elizabeth Line in London, a big ask was to try to keep the team that delivered that together because it was a very unique team that got a lot of expertise. Do people finish these major things and then disperse? Do they go abroad? Or are your members largely able to hold on to that expertise in the industry?
Jonathan Mitchell: That is not really an area that Skills England co-ordinates, but obviously a lot of the work that we do through various regional bodies and things like that takes account of some thinking that needs to happen around the ebbs and flows of workforce demand in particular regions. We have a regions division within Skills England that is working with strategic authorities around the country to think about some challenges.
Picking up on the point that was just made there, our focus is very much on making sure that we are looking at how we can secure that pipeline of talent into both the professions and the trades in this industry to make sure that that pipeline is constantly being renewed. There are opportunities that we are exploring right now in having stages in between the sometimes quite large steps between leaving school, degrees and the professions—that being the standard entry route to the professions. We think that will help make sure that the pipeline is as strong as possible.
Q17 Lord Bailey of Paddington: Finally, Sam, what level of career planning is there? Do I come on one of your courses to train to be a brickie and then leave and be a brickie, or are you saying I can go on from there? Are you talking to the young people about start points, end points and career development, or is it just about getting your ticket and moving on?
Sam Egan: It depends on the learner’s wishes and desires fundamentally, and the initial advice and guidance that would be provided for that student. It is about the full breadth of occupational mapping that there is in the sector. Careers advice, which starts at school in this area, could be better at raising awareness of those professions within construction, not just the trades. It is about the breadth of opportunity that is out there for our learners and removing some stigma that some parents have with regard to how they view the construction trades and what else is out there. There is quite a lot of work still to be done around that but that is very much where FE sits in terms of broadening those horizons.
Lord Ravensdale: I have a brief supplementary. Jonathan, you just talked about the regional work you are doing with strategic authorities, which is really good. Can I clarify whether there are any gaps in terms of governance, for example in areas that are not covered by a strategic authority? If you look at the Midlands, where I live, for example, we have a number of strategic authorities and mayoral combined authorities but a lot of the region is not covered by strategic authorities. How are you engaging there? Are there any gaps that we need to look at?
Jonathan Mitchell: We work really hard to try to make sure that there are not these gaps, especially where really significant things are happening. We have an infrastructure and investment skills service, particularly in the case of major things happening, such as gigafactories and the like, where there is clearly going to be a skills demand challenge that needs to be met. We would work with the employers, local authorities and so on to try to address that, and that is a way we bridge to some really significant areas.
Of course we are working across sectors, understanding that we have an expert network of employers who cover the whole of the country and from whom we can draw really valuable and important insight about things that are happening in various corners of the country. We try really hard to do that. Inevitably the way that devolution has functioned so far means that there is some contouring there in terms of how we engage, but we do our best to make sure that we iron out some contours as best we can.
Baroness Griffin of Princethorpe: I have a quick question, probably for Jonathan. What are we doing about just transition—namely, people who are falling out of work because their industry is in decline but who need to actually be skilled up to go into growth sectors? What are we doing about older people as well?
Jonathan Mitchell: It is really helpful to think about the way the skills system works through the lens of purpose as you have just done. There are a range of purposes we need to satisfy including workforce entry but also reskilling and upskilling. As part of that, some work that we have been doing lately—including in construction but in other areas as well—has involved looking at the introduction of apprenticeship units. They effectively draw on the same learning outcomes as standard apprenticeships but enable people to take a core set of skills that they may already possess and do some learning that enables them to transition into a particular occupation that perhaps is emerging or something like that. That is one example of the kind of work that we are doing there. Of course many people choose to retrain through apprenticeships as well and that is a totally viable option. We are working really hard to try to balance that between retraining and the really critical importance of getting the pipeline into the workforce flourishing.
Q18 Lord Cameron of Dillington: We have heard from both written and oral evidence that we have a crisis in skills. Everyone seems to be describing it as strongly as that. The Construction Industry Training Board is saying we need over 40,000 new workers this year, 2026. Jonathan mentioned that we need 493,000 new workers by 2035. This is a pretty good indictment of something that has gone terribly wrong for us to be so short of skills. Without wishing to play the blame game, what changes need to happen in order to get 40,000 new workers this year? What needs to change in government, private sector and education? How do we get this to actually happen on the ground?
Jonathan Mitchell: The reason that this has persisted is that there is a really structural problem at the heart of all this. It is not a temporary shortage as you have outlined. The way construction works is that it is fragmented, highly project-based and really reliant on subcontracting and sometimes very small SMEs. There is also the fragmentation in terms of skills demand. There is a need to meet the skills for the building of new towns, as we are talking about here. There is also the need to meet the skills demand for the maintenance, retrofits and conversion of the existing building stock. All these things make the long-term workforce planning really difficult.
In that context, something that we know across the economy is that employer investment in training has been declining. We know that SMEs tell us that the system can be hard to navigate—at least in apprehension if not in reality—but many find that they feel it is in reality as well. The sector has also not attracted or retained enough new entrants. These are all massive challenges.
The thing that I am seeing change right now and where we need to throw our weight is not trying to solve that through the lens of a single organisation alone. I am not going to solve that on my own at Skills England, and neither are my two colleagues sitting alongside me. Where we are seeing the real opportunities is in industry, government, regions, national Government and all those kinds of things really working together on this.
That is where we saw some real opportunities coming in the construction skills package, which itself was a reflection of parallel commitments being made both by government and industry. That led to a £625 million investment from government, but parallel commitments being made by industry were part of what made all that possible. Our work at Skills England is to try to bridge those things and make sure we identify the areas where we can bring the construction industry, which does not always agree with itself, together and find ways forward. That is what we are trying to do.
Lord Cameron of Dillington: Simon, what is the private sector doing about all this?
Simon Rawlinson: If I can make a slightly controversial observation, I believe that the labour crisis you describe is more one of need rather than demand, in the same way that the housing crisis currently described—1.5 million homes—is one related to need rather than demand. If one looks at labour market dynamics and cost inflation trends in the UK since 2019, the construction industry has consistently underperformed from a cost escalation perspective compared to the wider industry. That points to excess capacity rather than a shortage of capacity. My observation in terms of why that is occurring is that it is because of a lack of demand.
To go back to the NISTA pipeline, there is a very interesting piece of work that was published by McKinsey in March this year called “Impatient for Infrastructure”. It is a very good, very short read. Something it does is analyse the size of the pipeline that has been reported by NISTA or the National Infrastructure Commission since 2015. Routinely about £80 billion a year is spent, and it calculates the actual spend at about £47 billion, so there is a 40% shortfall on delivery of what the industry is told to plan for as opposed to what actually happens.
I am going to say that that need is genuine. I have absolute confidence that the projections that CITB and Skills England are making represent what is needed to deliver the infrastructure this country needs. At the moment we struggle to actually make that happen. That then takes away what you might describe as the need for concerted action between the training institutions and universities to solve these problems because the actual problem itself is not acute enough on the workface.
Part of the solution is actually creating what you might describe as more jeopardy through more programmes—a bit like the Olympics or Crossrail—that actually get people really focusing on having to get things done. At the moment we are sort of there but never quite there. To some extent that allows for the situation that you describe, which is little progress taking place.
Lord Cameron of Dillington: How do you get the demand to react to the need? You have admitted there is a need. We all know there is a need. Is it a government-led or private sector-led demand? How do you make the connection?
Simon Rawlinson: It is many. For example, if we take the current programme of work, we have regulated sectors, energy and water, which have very large amounts of investment that is underpinned by user charges. That investment still has to deliver a return for those companies to take it forward. It is fair to say that in that particular sector, there are resource challenges and that is perhaps not moving quite as quickly as we would like it to, but it will. We will see resource challenges in those areas very soon.
There are thousands of minds in this country trying to work out how to sort out housebuilding, whether that is a blend of social, affordable and market homes. Do you need patient capital involved or does the current model work? It is the concentration and looking at different alternatives rather than relying on perhaps one or two levers—such as planning—to be the solution. I am not going to be so bold as to suggest a particular solution to that problem, but a joined-up, multifaceted range of funding, planning decisions and all sorts of things need to get dealt with. They take a long time.
My organisation has been working on the Lower Thames Crossing for 10 years. We are now dependent on legislation in the current Session of Parliament to define a funding model to enable that to move forward. It takes time to make these things happen.
Lord Cameron of Dillington: Sam, what do you think the role of your sector is going to be? We heard last week that although—as you said—you have people queuing up to join your courses, apparently a large percentage are actually leaving in the middle of the course and not completing it. Do you think you can make your courses more interesting, or what is the solution?
Sam Egan: The solution is around making courses more real-life for our learners and having proper work experience: not just going and sitting in an office but actually going out to those live work construction sites—where they can—to really experience what that industry is like. A lot of learners are predominantly taught bricklaying under a cover for example. In real life it is cold outside. It is about them getting used to what that real working environment is really like, and that is something that we are really championing through our programme.
A key component of our qualification delivery is that employer engagement piece. That is really key because without that employer involvement, it does not really bring that career to life for our learners as much as it could. The support from employers through apprenticeships is also really important. They have really good engagement and support from the FE organisation and really good support from the employer to help support and mentor them through their qualification to make sure that they are retained on the course that they are studying.
The Chair: Lord Porter, did you want to come in?
Lord Porter of Spalding: No, the moment has passed.
The Chair: We are going to move on to Baroness Andrews, who is zooming in on our screens.
Q19 Baroness Andrews: I am so sorry not to be with you. Just to pick up very briefly on what Simon said, the urgency that you pointed out and the need to make things more urgent is something that really resonates with the committee in terms of our previous reports and the new towns programmes. You have already answered part of my question actually, which was: what do the new towns need by way of new skills to thrive? As you described, there is a great opportunity to maybe pioneer some quicker routes into different sorts of skills across construction but also project management, design and so on—the complete skill set.
I will not ask you to repeat what you said but I want to ask particularly Jonathan about Skills England in this respect. In your opening remarks, you talked about setting standards and providing evidence but we have heard categorically about skills shortages. Bearing in mind that you cannot see them in isolation, as you have said, do you see the new towns as an opportunity to pioneer not just new skills—whether there are technological or quick ways of learning—but new methodologies and progression routes into careers that can then actually provide better, more satisfying careers in the long term? Would that be your job and could you do it?
Jonathan Mitchell: We can do lots of that work but not on our own as previously established; that is something for industry and government to work together on. Our job is to work with industry to make sure we really understand what those evolving skills demands are going to be. Of course it is really obvious to us all that the pace of technological change in construction and the built environment—as much as anywhere else—is very significant. Some new skills demands are transversal: they can cut across a range of different industries and things like that, and we absolutely get that. AI is the example everybody gives all the time but there are others.
Certainly through the conversations we are having with industry at the moment, we see the potential for some changing skills demands to unlock different ways in which we can bring people into the skills pipeline. To give an example that I do not think is necessarily authoritative but is not that hard to imagine in terms of some built environment professionals that I have talked about, there is the role that AI can play. It can play a role in such a way that it helps with that bridging between those who want to enter the industry but perhaps need a step in between getting to full chartered status and all that kind of thing, where AI and the skills that they can develop in that space may be a part of that solution.
There are ways in which these opportunities—where there is a clear pipeline of demand for employees—can give us the chance to begin to build skills training products that are different and that work in different ways. Part of the work that I did in the last few years was around making sure that we are in a strong position to detect those early signals of changing labour market demand where employers are beginning to ask for something that may not yet have become the norm across a particular industry. We make sure that we are really spotting that, working out when we need to get that at the heart of training that needs to be delivered and working through our regional partners to explore how that can work at a regional level. We have done some really interesting work with Innovate UK in its catapult network, again to understand where those new technologies are going to lead to new skills demand. There are lots of things that we can do.
Baroness Andrews: It becomes a virtuous circle in terms of modern methods of construction. You could actually see a new skill pattern emerging in part of that, for example. I have two specific questions. Could you see the new towns as testbeds to perhaps embed training and apprenticeships from the beginning? These are very long-term programmes and are site-specific but they will have a common universality of essential actions. Could you, as it were, audit that so it becomes transferable across construction or in fact across management?
Jonathan Mitchell: Simply put, yes we can do that. I have already mentioned the infrastructure and investment service that Skills England has. It may well be that there will be areas of things that are happening in new towns and opportunities where the pipeline of demand effectively permits employers to invest in the adoption of technological innovation and things like that. That gives us real scope to help accelerate and support that by reflecting that in the training that can be delivered.
Baroness Andrews: Finally, if that were to happen would you expect people to come to you or could you go to, say, a number of the development corporations we expect to be involved and say, “Okay, we think we could help like this. This is what we think it would look like. What do you think?” or would it be a more responsive rather than proactive decision on your part?
Jonathan Mitchell: In my experience it is always a mixture of the two. In fact, often—again, in my experience—what happens is that we meet in the middle because we are both so desperate to talk to one another. If you take the new hospital programme and things like that, that is the way that is playing out for us. We see ourselves as having a convening and catalysing role in the way in which the skills system evolves but, likewise, we are often meeting people in the middle who also want that same outcome.
Baroness Andrews: That would be very welcome because we have heard time and time again about the lack of co-ordination and the absolutely essential quality of people getting together. Again, in your opening remarks you talked about the importance of co-ordination so perhaps this could be a testbed to do some of these things in new ways.
Baroness Miller of Chilthorne Domer: I would just like a quick bit of clarification. You have talked a couple of times about regional partners and variations and in your answer to the first question you mentioned that they were contoured, which I have been mulling over. Is that a euphemism for something? Could you explain it a little more? How do you see the regional variations being addressed?
Jonathan Mitchell: That was probably just poor English on my part, which is probably a bad thing given that I used to be an English teacher. What I meant by that was there is clearly a difference in the amount of capacity that different parts of the country have to engage with us on skills. The mayoral strategic authorities around the country often have very mature or maturing skills dimensions to them. Other parts of the country with fewer devolved powers and things like that perhaps do not have the same apparatus to engage with us. I do not think that means that we are just ignoring those parts of the country.
Baroness Miller of Chilthorne Domer: Obviously I am very conscious of that coming from the south-west. How will you address the places that cannot so easily engage with you?
Jonathan Mitchell: In the ways that I have tried to describe, particularly where there is high-impact or high-profile infrastructure or investments taking place, as, in the south-west, in Taunton. With Team Plymouth and all those kinds of things, we are working with our sector partners, such as Babcock and others, to explore how we can make sure that the right skills mix is in place and that we are getting the right intelligence, insight and engagement from employers—including where that brings some constructive challenges to us as it sometimes does—to make sure that we are cognisant of what is going on and that we are taking the actions required. I guess it is through a number of approaches.
Q20 Lord Bassam of Brighton: I am not quite sure who is best to answer this but how big a distorting impact do regional variations in pay, house prices, et cetera, have on the labour market for construction skills? If you are a bricklayer in Blyth, say, the value of your pay presumably is somewhat greater than if you were a bricklayer in Brixton. Property values would have an impact on wage levels as well. Does this impact the way the labour market works and the way people approach learning and skilling up?
Simon Rawlinson: Going slightly off-piste from my role in the CIC, I note that there are quite noticeable differences in the cost levels to deliver comparable buildings, for example in central or outer London, Birmingham, Manchester and rural areas. They tend to be more extreme in London and the south-east as you would expect and that reflects the kind of factors that you have described from a point of view of cost of housing and suchlike.
There is not necessarily a huge amount of evidence of a shortage of labour in these locations because the construction sector is quite mobile from the point of view of its preparedness to move. The professions—the sector that I represent—are of course increasingly spatially agnostic and digitised and can therefore practise anywhere to some extent. That is an important consideration for the scale of the programmes that we are describing today where you need to bring together large teams at particular crucial moments. That sense that you are not trapped with a particular regional model is very important.
Q21 Lord Ravensdale: In the last question we touched on technology and how training models can help deliver the technological advances that we are seeing. My question is more about how those technological advances could actually help with that skills shortage. If we look at modern methods of construction and AI standardisation, how can these actually help address the construction skills shortage, and, crucially, how quickly?
Simon Rawlinson: From the point of view of the professions, it is clear that the use of technology is making people far more productive; there is no doubt about that. From the point of view of automation and design detailing, some processes are now used to ensure, for example, that planning consents have been properly delivered and buildings have been constructed safely. These are enabled by technology and that is taking what you might describe as a very large drag on resource requirements. I will observe that the regulatory burden probably increases in proportion to the technology's ability to respond to it so that does not necessarily mean there is a sudden growth in capacity.
There are certain scaling challenges with the application of AI. If I were to use an example of work that my business has recently undertaken for a global pharmaceutical company, we use AI to actually do the spatial master planning. This is what you might describe as millions of iterations of different computations of how a site might be used. If you see the coding that was drafted to enable that process to happen, that is a very specialist skill that is gained not in colleges but at the workface by people who are really at the front edge of their profession.
We are in what you might describe as a discovery phase of what these technologies can do, what kind of skills people need and, it is fair to say from a professional side, what kind of guardrails need to be put in place to enable the safe use of them. My home institution—the RICS—introduced a professional standard for the application of AI. It is the first construction or built environment institution to do that. As well as having the opportunity to use the technology, it also has to be used responsibly and that is something that is an area of development in the institutions at the moment.
Lord Ravensdale: It is really interesting to hear you talk about the current implementation of technology and how that has made the industry more efficient. As we have tried to implement digital technology in the industry—for example, building information modelling, which there were quite high hopes for with a single digital model and all the efficiency gains that would bring to the industry—we have actually seen construction costs increase over the last five or six years. Is that down to the regulatory side of things that you mentioned?
Simon Rawlinson: Yes. I had direct experience of the original introduction of BIM through the government strategy on behalf of the CIC. Seeing how it is implemented now, I would say that a lot of the vision that was set out there has been realised, particularly where projects and programmes are integrated, and new towns could offer that potential for integration.
The inflation that we have seen is partly related to input costs. There is no doubt that a lot of the cost inflation that occurred after Ukraine has not gone away in the same way as it did not go away in the wider economy. Regulation plays a part. Some of my colleagues—again within my business rather than the CIC—are securing additional opportunities for assurance work, some digitally enabled, to demonstrate that regulations have been met. There is inflation from the point of view of standards but also process.
Lord Ravensdale: Jonathan, what are your thoughts on the impact on the productivity of the sector from technology?
Jonathan Mitchell: In some ways they are very similar to what you have just heard. The analysis that we have been doing—looking at AI and a range of other technological advances—suggests to us that it can help with productivity as you have heard. It is not really a substitute for workforce development for reasons that I am sure are obvious to us all really. We see the modern methods of construction, standardisation, digital tools and so on perhaps reducing some pressure in certain parts of the workforce but also creating new skills needs that we will need to meet.
When employers talk to us—as they do all the time of course; I was talking to someone from the Construction Leadership Council just yesterday—what they consistently say is that unlocking their investment in embracing these technologies and things like that is much the same as unlocking their investment in skills. They want confidence in the pipeline of work that they are facing and when they have that, that is often the stimulus to embrace some new technologies, which can speed things up and improve productivity.
We continue to work with employers to understand exactly where our own products—apprenticeships, technical qualifications and so on—need to evolve in order to meet those particular needs. Just as one example of that, we recently approved an apprenticeship unit in modular building for people working in the construction workforce at the moment who are perhaps going to need to be part of the mix that helps that transition to take place.
Lord Ravensdale: Do you see a timescale where this is actually going to make a step change in the productivity of the sector and really help that skill shortage that we have or do you think it is more of an incremental advance?
Jonathan Mitchell: I am not certain of the answer to that and I am always wary of trying to predict the future on skills. From what we are seeing so far, while there are sometimes lurches in terms of skills demand, generally speaking it is more incremental.
Lord Ravensdale: Sam, what are your thoughts as a skills provider?
Sam Egan: Specifically around modern methods of construction as an example, at Bedford College we have a great facility to teach that. We have upskilled our teachers to be able to use it and we will be rolling out courses for our students. Across the FE sector it is a very expensive area to invest in and where we are seeing the ask from employers, it makes us more nervous about putting that investment in. When we hear that need then we can start to roll that out a bit more.
We were talking about retraining earlier. With digital retraining that is really helpful for adults that need to upskill in green skills for example or other areas of construction that they may not have learned in the past. Talking about that work experience piece earlier, we have wonderful methods of using VR in simulated working environments for our learners as well as retraining where they are using that technology to give a better feel for what that working environment looks like. FE is embracing it fully, as we are across all subject areas that we teach, and making sure that we are using it in the right way. We just need to make sure that we are confident in the need and the ask from the employers before we keep investing in those particular pieces of software, et cetera.
Lord Cameron of Dillington: I am referring to the modular housing that you have just been talking about. Prefab is almost a derogatory term in the UK but in America they have been building executive homes through modular housing for decades and it is very successful, with innovative designs and so on. This is really a question for Simon. How are we going to change the demand in this sector? As Sam said just now, the problem is the businesses that already exist in that area are not finding the demand is enough to keep their factories going and so on. It could solve a lot of the problems we have with skills. It is so much easier to get a lot of skills into a business than to put them in construction sites all over the country.
Simon Rawlinson: Modern methods of construction have been extremely successful in this country in the right sectors. One could highlight schools, hotels or, latterly, defence, and I am sure they will be applied in the new hospitals programme. My observation about the UK housing market is that it just does not have the scale that the US market has. The US market is enormous and that enables many different models of delivery to thrive.
Our market is relatively small and pretty capital light, it is fair to say. It seems to work when the demand is there. The problem—as we see at the moment—is that when the demand is not there, then capital-intensive solutions such as modern methods of construction are quite vulnerable. I cannot see us getting the cyclical nature out of housing. We can raise the baseline perhaps through more social housing investment but that cyclical element will always be there and that will challenge the MMC model.
Baroness Barran: Jonathan, you talked about providing data and evidence. I just wonder whether you are doing any benchmarking—either regionally, by sub-sector or even internationally—about the impact of technology on productivity so that we can start to understand the areas where it really is making an impact and then potentially understand whether we can lean into them more.
Jonathan Mitchell: There is more that we want to do but we are obviously very interested in what is going on around other jurisdictions and things like that. When we are talking to colleagues in CITB or across industry and things like that, we spend time trying to identify where we can learn most effectively from what is happening elsewhere. There is some research planned at Skills England to look into this space and what we can learn from other jurisdictions a little more robustly. It is one of those things that we will want to build up but we are on a journey with that at the moment, still being only about a year old.
Q22 Baroness Lawrence of Clarendon: I am going to aim my question at Sam if you do not mind. Lord Cameron touched on part of my question. Some 50% of men and 70% of women do not complete their training and apprenticeships. What steps should Government and industry take to make careers and the construction sector more appealing?
Sam Egan: As I said earlier, there is a lot that can be done—particularly around workforce diversity—starting off in schools to really promote those careers to women in construction. With the CTEC programme we will be doing lots of engagement around that to make sure that we are promoting the best view and reputation of construction that we can for women and that they are supported with their qualification, and then their role when they go into employment. We need to make sure they feel secure in that role and they do not then leave the occupation because they are finding it challenging to stay there.
We need to provide really good work experience provision to our students starting at 14 and upwards. There are some brilliant schemes out there but they are very expensive. For example, Bedford College has just run a scheme with five or so students but it costs £2,500 per student to go on to a residential live site to actually spend a whole week there and learn how to do all these amazing things that they would never be able to do at school or at a day’s release with employers. Investment into the career space is crucial. Connexions has gone and that previous funding that was there has been reduced so it is really difficult to put these experiences together as well as we could.
It is about following that experience through and making sure people have really good mentors throughout their qualifications that they are studying and that their teachers are relevant and current. We are doing a lot of work around ensuring that our teaching staff are credible and have current skills from the industry. There are exchange schemes that we are working on where we are bringing industry experts into the classroom and then ensuring that our teachers are getting out to industry as much as they can to make sure that they are really current in the work that they are doing. Pulling all that together is one of the best ways that we can deal with that challenge.
Baroness Lawrence of Clarendon: People are saying the reason they do not complete the apprenticeships is either the employers, to do with the apprenticeship and how they do their thing, or the college and the tutors. Once individuals start their training, how can they be motivated and supported to complete it?
Sam Egan: I mentioned earlier that employer engagement is really key and working together with the college to make sure that that experience for the learner is a really good one. Some really good examples where we have seen this work are where employers have really strong partnerships with the FE college in their local area. For example, some even have offices within the college so that they are working together really closely to build that apprenticeship experience for learners to make sure that it is seamless, rather than them being with the college one day and another day with the employer and there being nothing that meets in between.
There is a lot of work that we are trying to do on the CTEC programme to work with SMEs and micro-businesses around their accessibility to understanding what the FE system is about and how they can work with students and apprentices in making that experience easier for them. We are trying to get rid of some red tape, bureaucracy and mystification about what the FE sector is. Those SMEs are key for apprenticeship vacancies.
Baroness Lawrence of Clarendon: On support within the skills sector, I understand that quite a few colleges are closing down. Are there enough colleges there to support the work that you are trying to do?
Sam Egan: On the CTEC programme itself we have 10 hubs and each has a multitude of what we call spokes. They could be colleges, independent training providers or anything within the FE sector that we will utilise to make sure that there are enough people training our learners through their qualifications. I do not have a concern over that right now; the programme of work that we are focusing on at the moment is as wide-reaching as it can be.
Q23 Baroness Barran: I wanted to just get your sense of what you would like to see the Government focus on going forward, prioritising your top three things. Sam, I start with you in terms of addressing skills shortages. You must say what you think but obviously over the last few years there has been a lot of talk about streamlining the number of qualifications and I just wonder whether that sits in there or not.
Sam Egan: That is number two.
Baroness Barran: The other thing is the lifelong learning entitlement and whether that will change the ability at levels four and above—from memory—for students to get finance for FE to be better funded. If they are not there that is fine but I am just interested. We have not touched on either of those themes so far.
Sam Egan: I will go to my number two. The qualifications are absolutely key. What we are finding at the moment is—as I mentioned right at the beginning—our learners are going through the qualification and seeking employment, and the employers are feeding back that they are not site-ready. Some qualifications we have funded to deliver are out of date and need updating. I know that is not a quick process but that is definitely something that is critical and needs to happen for us to ensure that the learners are not having those gaps when they get to employment. That is really important for us.
One thing I was going to mention—Baroness Andrews mentioned it earlier—was that involvement in FE at the planning stage of new towns. If we are involved right at the very beginning, we can help shape that. There are some good examples of where that has actually happened in Exeter, for example, where the colleges have been involved right from the very beginning. It gives us time to align our curriculum, have the right staff in place, et cetera, rather than a really quick turnaround that FE really struggles to deal with. I would say that, as a quick win, but a win for us, that would definitely be beneficial.
Social value is really important for us. We have not really picked that up. That part around social value, Section 106 and the need for tier 1s to engage really well with their SMEs about what apprenticeships they are going to offer, et cetera, is key. FE having sight of that or being involved in that would be a game changer in terms of those apprenticeship vacancies for the FE sector.
Baroness Barran: Can I just come back on involvement? Do you find that in your area you are able to engage with the LSIPs—the local skills improvement plans? Is that a place where you have a voice? Presumably you could have an LSIP for a new town.
Sam Egan: Absolutely. Part of the programme that we are working on demands that we work with the LSIPs; otherwise, there could be pockets of work going on in a region that are not aligned—potential duplication and not value for money. It is really important that we are working together on those LSIP 2s that have just gone in and the CTEC delivery plans that we work through.
Baroness Barran: Simon, what are your top three things, if you ruled the world?
Simon Rawlinson: First, I am a very great supporter of strategic workforce planning and my recommendation is that that would be used to focus on some very specific skill sets that we discussed earlier to make new towns a long-term success. Human-centric design, low-carbon design and those kinds of things would be number one.
Secondly—this is very much a CIC agenda—is to promote alternative routes to qualification for all professions. Examples of that will of course be apprenticeships but I would particularly call out the built environment technician standard because that allows so many different routes using a single qualification. Conversion is also important. I am a non-cognate professional. My conversion took seven years; it should not take that long. Encouraging different routes to enable that to happen is really important. The final thing, again picking up lifelong learning, is supporting the development of micro accreditation for specialist areas—AI, building safety, BIM and all those areas—because it is those small additional bite-sized chunks of qualification that would enable a much more capable industry.
Baroness Barran: Can I just challenge you on the micro accreditation? Why should employers not pay? If we look at how much employers have been spending on training, we know it has been on a downward trajectory and the state steps in to fill the gap. Surely the micro accreditation would be the easiest and most agile place for employers to pay.
Simon Rawlinson: I was not necessarily suggesting that government should pay. This is creating an environment in which those micro accreditations get what you might describe as a critical mass.
Baroness Barran: Sorry, I misunderstood. I thought it was in relation to the LLE.
Simon Rawlinson: Certainly not. That is a fair point from the point of view of just the development there, but there are other sectors where they have been very successful. Technology is a good example.
Jonathan Mitchell: You will forgive me if I do not necessarily lobby the Government with my recommendations, although I am bursting with them inside. Some things that I have talked about are things that we need to build on and continue, and that is really where I see the real focus. I actually agree with lots of what Sam and Simon have said here.
There is something about taking a fresh look at the content and structures of the available skills products that we look after. Have we really got the right mix of apprenticeships, technical qualifications and apprenticeship units or have some drivers of the apprenticeship levy driven us to end up with apprenticeship provision in places where perhaps other solutions might be optimal? That is something that needs to keep on happening. We have to make sure that those products are really fit for the purposes that they are aimed at.
It will not surprise you to hear me say we have done really good work in the last year or so—since Skills England’s formation—to really build close collaboration between employers and government of course. That includes work across government through things such as the jobs plans and CTECs, which are such a critical part of us making sure that we have a really collaborative, consensus-based set of priorities to drive forward that we can all rally around, because that is where success lies, if you ask me.
We need to continue the work that we are doing at that more disaggregated level through the LSIPs, our regional partners, the CTECs again and the major housing and infrastructure projects that exist to make sure that those are driving and helping to shape the system and that we are better able to support those in a tailored way. Those are probably my three main areas.
Baroness Barran: Obviously you raised the point about working really closely with employers. If I understand rightly you are also part of IfATE, which also wanted to work really closely with employers. What is the tangible difference that you feel now? I am not saying one is better or worse; I am just trying to understand what the difference in focus is now compared to before.
Jonathan Mitchell: Something that has been really helpful for Skills England has been a slightly different relationship with employers. We did really good work with IfATE and made a contribution. Nevertheless some spaces that we felt unable to get into with our work—very sharply focused on the generation of occupational standards and products of various kinds—were in those areas where we could play really an active role in convening the right bits of government, industry, the provider community and so on to solve problems together.
I will be running a meeting jointly with the Construction Leadership Council in a week or two weeks’ time about how we can help the construction industry coalesce around a vision for how skills passporting might work in construction. It will not be our job to deliver that passporting solution—that is for industry to work through for itself—but we can play a really useful convening and supporting role in terms of helping to get some things to happen. That was less of a feature of our remit as IfATE, but at Skills England we are able to make a real impact in those kinds of spaces.
Q24 Baroness Griffin of Princethorpe: Just very quickly, Simon mentioned net zero. I am delighted you did. Obviously, coupled with net zero is energy efficiency, both in the alleviation of poverty and in the promotion of good health. As we have seen recently, that is cooling as well as heating, and combined with that is making sure that everything that we do is fire safe. Maybe this is a question for Sam about how these principles are actually embedded across the skills agenda.
Sam Egan: FE will always be responding to the skills agenda in the way that it can as quickly as it can. There is a set of wave 2 technical excellence colleges that are focusing on green skills and will be picking up a lot of that response and provision. There will be some overlap with construction techs in some areas that we are working on.
Simon Rawlinson: There has been very extensive work across the industry co-ordinated by bodies—including CIC—on the development of competence standards. That has been going on now pretty much since 2018. They effectively create—as you described—the framework and standards by which competence is determined and then trained against. That is a really strong infrastructure available to ensure that those skills are in place.
The Chair: You will be pleased to know that that is the end of this session. I am sure I speak for everyone when I say we are all very delighted to have you. It has been a really interesting discussion and we are very grateful to you for giving up your time. Power to your elbow as well. With that, that is the end of the meeting. Thank you.
