Construction Industry Training Board (CITB) (RFH0009)
Introduction
The Construction Industry Training Board (CITB) is the employer-led and funded skills and standards body for the construction industry in Great Britain. A statutory corporation, charity, and non-departmental public body, sponsored by the Department for Education, our work supports industry to attract, develop and retain the construction workforce. We maintain construction training standards and keep Britain building safely. Our purpose is to support the construction industry to have a skilled, competent, and inclusive workforce, now and in the future. For more details on CITB’s work visit: www.citb.co.uk.
CITB welcomes the opportunity to provide evidence for the Energy Security and Net Zero Committee’s session on retrofitting our homes for a net zero future. CITB's mission to empower the construction industry with the skills, training, and tools required to transition towards a net zero future.
Labour market challenges in the construction industry
1.1 The UK construction industry faces a range of labour market challenges which will limit its ability to address the scale of retrofit work to be undertaken on UK homes. The labour market challenges have been seriously exacerbated by the COVID-19 pandemic and the end of EU Freedom of Movement. Since 2019, the construction industry has lost nearly 60,000 construction workers, largely due to the change in work-life balance sought by self-employed construction workers. This figure is not forecast to change significantly before 2028, meaning that the construction workforce will still be some 2% smaller than its pre-pandemic level of 2.7 million. There has also been a 22,600 (7.4%) fall in the number of migrant workers (those born outside the UK) employed in UK construction in 2021 compared to 2019 (Migration and UK Construction, CITB, 2023).
1.2 The construction industry will need to recruit 251,500 more workers over the next five years to address these impacts and meet output demand at a time when the labour market is historically tight (Construction Skills Network: Focusing on the skills construction needs: 2024-2028, CITB, 2024). This figure changes annually based on a range of economic and business factors and includes all known future construction activity relating to the move to net zero. This activity cannot be separated from other construction activity within the forecast. The industry’s current annual recruitment requirement of 50,300 workers a year was an increase on the 44,890 in the 2023-2027 Outlook.
Net zero related labour market challenges
1.3 Developing a skilled workforce and a marketplace that works for the construction industry requires active planning and direction, supported by the Government.
1.4 The scale of the challenge to retrofit the UK’s homes is so significant that it requires a rapid and lasting transformation of the construction sector, including an industry-wide investment in skills, far-reaching skills policy reform, and an unprecedented recruitment and upskilling drive (Building Skills for Net Zero, CITB, 2021). This demand overwhelmingly relates to improvements to existing buildings to reduce their energy demand and would represent a 13% increase on the current size of the workforce, based on current technologies and ways of working. Within the construction industry, the vast requirement is for recruitment and upskilling within existing, rather than new, occupations. However, without levels of available people, these equivalences will have to be found in increased productivity, which has remained low over the last several decades, competition with other sectors, or migration.
1.5 Several general structural labour market challenges further negatively impact on the industry’s ability to ensure it has a skilled workforce able to transition to net zero. Many of these challenges are common to other sectors of the economy, however, the structure and make-up of the construction industry often exacerbates these impacts. Construction has an ageing workforce; a high labour but low productivity business model; and a history of boom and bust within the industry. Industry’s very high proportion of SMEs and self-employed; mobile workforce; and its difficulty in planning over the long-term for fluctuating workloads also hampers both recruitment and upskilling.
1.6 There is a need to develop a sustainable net zero retrofit model. 80% of the homes and building in 2050 will be the ones we are living and working in today (Building Skills for Net Zero, CITB, 2021). The existing stock of homes and buildings is responsible for 95% of carbon emissions. 1,450 workers are required in the repair and maintenance sector per every £100m (current prices) in output, compared to 1,000 workers for new home building, and 700 for new infrastructure (CITB, Labour Forecasting Tool). Based on this, reducing carbon emissions from the existing building stock will be the only way the sector meets its net zero obligations and drives high-levels of job creation and upskilling. However, the growth of the retrofit marketplace and associated net zero recruitment and training demand for net zero remains limited.
1.7 There is a specific challenge of retrofitting heritage properties, that is, those built prior to 1919; those in conservation zones; and listed properties. According to the National Federation of Builders Heritage Group, theses homes represent approximately 2% of existing building stock. The Heritage Alliance estimate that the UK needs to double the number of conservation-skilled retrofit contractors if it is to meet it net zero targets. While homes are not incompatible with climate adaption, the skills required for this are different from that of retrofit of more modern homes. Research for the Churches Conservation Trust in 2021 found it takes many years to acquire the necessary level of experience and knowledge to work on heritage buildings. A long-term strategic approach is required to address skills shortages in traditional building skills, facilitated by stakeholders across the sector.
Stimulating market demand
1.8 Employer demand for training tends to be driven by regulation, legislation, and business growth opportunities. Where market demand has not been stimulated, employers will not undertake training elements that do not meet business requirements.
1.9 The Government must provide a long-term pipeline of work to ensure that employers view the transition to net zero as a growth opportunity. The need to improve the energy efficiency of 27 million homes across the UK presents the biggest opportunity for construction employers this century, and industry must be supported to respond to both economic opportunity and growing customer demand. Analysis of TrustMark data found that businesses involved in retrofitting homes are experiencing huge demand for their services, with three out of four looking to increase their workload (Improving the energy efficiency of Britain’s homes: the opportunity, CITB, 2024). However, as with the wider construction sector, the vast majority of businesses involved in energy efficiency work are small or micro in size. Nine out of 10 (92%) firms have fewer than 50 employees, with two out of three (65%) having fewer than 10. As such, small and micro businesses, who are already busy, require certainty provided by long-term funding and policies to encourage upskilling of their workforce to capitalise on the opportunity of retrofitting the UK’s homes.
1.10 Previous Government initiatives such as the Green Deal and Green Homes Grant have led to peaks and troughs in demand, variable quality of delivery, and resulted in job losses, leading to a lack of confidence to invest among small businesses. While recent policy and funding announcements as part of the Warm Homes Plan, such as the 300,000 households which will benefit from home upgrades in 2025/26 are welcome, longer-term planning and longer-term supporting policies and funding will enable local authorities to procure for long-term funded projects, thereby providing clear demand and greater certainty for local supply chains.
1.11 Low employer retrofit uptake based on lack of a long-term guarantee of future work has led to limited numbers of installers certified to PAS2030/2035, with only specialist rather than widespread employer uptake of the relevant standards. A lack of future work has also led to the low uptake of retrofit assessor training (required under PAS2035 works) with only, at the time of CITB's workforce assessment, 650 trained retrofit assessors against a modest industry target of 1000 in 2022 and well below the numbers needed by 2030 to retrofit the existing building stock to meet net zero.
Attracting new talent
1.12 CITB research found that a third of young people believe construction is for someone like them, and only 2% consider construction to be their current preferred industry (Rethinking Recruitment: Constructing a More Attractive Industry, CITB, 2022). The widely held, and false, perception of construction as a low skilled and low pay sector with a poor culture and working environment must be addressed. The sector must be seen as a positive destination by potential new entrants and those who influence them in their career choices, such as parents, friends, teachers, and careers advisors. Clear information about the career opportunities in construction, and how to access, participate, and progress in the industry must be provided to underrepresented groups as they begin to make decisions about their subject choices and career pathways.
1.13 The challenges to improving diversity in the industry include pay; progression; diversity in leadership; and a lack of diverse role models for new entrants to aspire to. This is at least in part due to the recruitment practices of the industry, which rely on informal, direct, ‘word of mouth’ recruitment from informal networks. This, together with a fragmented company-by-company approach to recruitment, makes it difficult to reach a more diverse set of applicants. Industry, particularly SMEs and micros and those who lack sophisticated hiring methods, require support with recruitment to help attract people from different talent pools.
1.14 The construction industry also needs to ensure that it attracts people who are already progressing through their careers in other industries, for example, the digital and logistics industries; returning to the construction industry, bringing the knowledge, skills, and innovative approaches developed elsewhere; and already working in construction, but who want to progress further in their careers, in their existing occupation at a higher level, or becoming managers and leaders. To support these groups, training pathways need to evolve to become more modular and interconnected. This will enable learners, including those with existing experience, to better transition into, or return to, industry. This approach will also empower people to progress into new roles throughout their careers, developing the emerging skills required to respond to net zero.
Retaining talent
1.15 To make construction a viable career choice for as many people as possible, the flexibility and agility of the industry must improve to enable a more diverse workforce to join, return to, and remain in the industry. This includes exploring flexible working and supporting the mental health of the workforce.
Net zero skills gaps
1.16 CITB research (Building Skills for Net Zero, CITB, 2021) identified several skills gaps within the existing workforce which need to be addressed:
1.17 A number of roles also have existing skills shortages, and many will need large increases in numbers to meet Government targets on retrofit, including:
Addressing barriers to training
1.18 A planned approach is required to ensure that training matches industry needs and demand. Coordination of training at a local level will need to improve through industry, training providers, and local government collaboration.
1.19 As part of addressing barriers to training, the industry needs working and responsive pathways from Further Education (FE). Only 33% of FE learners on construction-related qualifications in England enter employment or an apprenticeship in the industry as their first destination six months after completing their qualification (CITB analysis, 2021). The FE training offer needs clear employer-backed progression pathways that provide young people the skills and competence to enter intermediate construction apprenticeships at Level 2, where there is significant demand and a lack of a clear employer-backed pathway.
1.20 Local training provision should effectively align to industry net zero demands. Only 22% of employers engage with colleges to support their recruitment needs and only 26% to support their training needs (FE Pathways, CITB, 2018). Employers often find it difficult to access essential specialist training, for example, understanding of retrofit and a building as a system, heat networks, and specialist knowledge of working on older buildings. This is often the result of a lack of commercial viability and shortage of tutors to run courses in these subjects. Local Skills Improvement Plans (LSIPs) provide an opportunity to build new employer-led partnerships needed to address the mismatch of training provision with industry skills demands in relation to net zero. Thought must also be given to how national energy and home building programmes expand skills provision rather than creating skills gaps within local and surrounding areas. Construction employers also prefer a greater level of onsite training to ensure a higher level of competence, although this requires significant support for small and micro employers who make up most of the industry.
1.21 Training routes must be underpinned by employer demand to train. While employers place great importance on work experience, more than bosses in any other industries, they are less likely to offer it because of a lack of time, resources, or suitable roles. High levels of self-employment and micro and small employers, along with workforce mobility, exacerbate this challenge. Work experience, when it is offered, tends to be short duration. Overall, only 23% of construction employers, compared with an average of 38% across the economy, offered any type of work placement. Construction employers, more than any others, find many young recruits are poorly prepared for work. This judgement applies to nearly half (49%) of school-leavers, to 29% of FE leavers, and 18% of university leavers (Young people’s work readiness and the construction industry, CITB, 2018).
1.22 Industry requires a skills and assessment system that is fit for purpose. The workforce will require a broader range of skills to address net zero, and opportunities for training must be made more accessible and flexible, to support multiple routes to competence. Dividing the training and assessment journey into smaller components better fits the way individuals develop, refresh, and upskill throughout their working lives, and allows employers and individuals greater flexibility to access skills as and when and they are required. There is a need to move towards a culture of Continuing Professional Development and modular training, which allows for easy upskilling of the workforce as technology and associated knowledge requirements change. For industry to play its part in reaching net zero, the sector requires a more modular training and assessment system, led by industry.
Investing in skills and training
1.23 To support industry to retrofit the UK’s homes, the Government’s forthcoming Growth and Skills Levy should be strategic rather than a transactional 'money-in money-out' system, effectively aligning with the construction levy. Apprenticeship funding should also be protected, with additional funding provided for pre-apprenticeship training to drive-up apprenticeship starts and completions. Only training meeting industry backed competence standards should be funded by the levy.
1.24 The new Growth and Skills Levy should also assist Skills England with the long-term funding of LSIPs in England to ensure they become fully integrated into the skills system, empowering local leaders and stakeholders to better tackle the retrofit challenge in their locality.
1.25 Training delivery and support should be accessible and more effectively place-based. The new levy’s funds could also be used to increase apprenticeship completions though funding for pastoral support for learners prior and during their apprenticeships, and for training for employers (especially SMEs) in how best to support apprentices in all aspects of their learning experience. Employers in some geographical locations are a long way from an accessible training provider so feel unable to support apprentices.
CITB next steps
CITB is currently working with the Climate Change Committee (CCC) to understand the construction skills requirements of its forthcoming 7th Carbon Budget, which includes updated scenarios on the transition to net zero. We are also undertaking modelling on the skills requirements to deliver the Government’s ambition to retrofit five million homes in five years. We would be pleased to engage with the Committee on completion of these insights, in spring to summer 2025.
November 2024