Written evidence submitted by the Construction Industry Training Board [HLV 009]

About CITB

CITB is the industry training board for the construction sector in England, Scotland, and Wales. It’s our job to help the construction industry attract talent and to support skills development, to build a better Britain.

Our purpose is to support the construction industry to have a skilled, competent, and inclusive workforce, now and in the future.

The construction levy we raise from employers means we will be able to invest over £1 billion this Parliament to support the industry’s skills and training needs.

Our 2025-29 Strategic Plan outlines our approach to supporting the construction industry’s skills and training needs over the next four years, focusing on three key objectives:

• inspiring and enabling diverse and skilled people into construction through various routes;
• developing a skills and training system to meet current and future needs by simplifying it and making it more responsive; and
• supporting the industry to train, develop and retain its workforce by leading the development of an industry agreed definition of competence for every construction occupation.

We welcome the opportunity to provide written evidence to the Committee’s inquiry on land value capture. Our evidence focuses on the effectiveness of Section 106 (S106) agreements on the provision of skills and training need to deliver the government’s target of 1.5 million new homes.

Introduction

The skills shortage in meeting the Government’s homebuilding target is substantial. 

The homebuilding sector will require the equivalent of 161,000 new workers to deliver the 1.5 million new homes (a 30% increase on the existing homebuilding workforce). This is on top of the 250,000 workers the construction industry needs to meet demand across the whole of the construction pipeline over the next five years.

There are approximately 82,000 apprentices currently enrolled on a construction apprenticeship across Great Britain, with 33,000 starting in 2023/2024. We need many more apprentices starting and completing apprenticeships to meet the industry’s need for skilled workers if we are to build the homes Britain needs.

Construction skills and S106 agreements

S106 agreements can support construction skills indirectly through local employment clauses, training programs, or contributions to educational facilities.

• Training and Employment Initiatives: developers may agree to fund or provide training programs as part of a S106 agreement. For example, they may provide apprenticeships or, in some cases, developers may be required to contribute to local employment/training schemes that focus on upskilling workers in the industry.
   
• Local Employment and Workforce Initiatives: some S106 agreements encourage the hiring of local workers for construction projects ensuring that local people are employed on construction sites.
   
• Funding for Construction Education and Facilities: In some cases, a developer might be asked to contribute to construction training programs or local educational institutions (such as colleges offering construction qualifications).

Restrictive S106 criteria

Used correctly, S106 agreements can drive good outcomes for local skills demand, employment, and apprenticeship opportunities in construction. However, in some instances local authorities’ use of out of date benchmarks and overly restrictive criteria limiting employers ability to recruit from certain postcode areas in the locality, are having a detrimental impact on construction skills and apprenticeships rather than supporting them.

Some issues reported by construction firms because of overly restrictive S106 agreements include:

• In some cases, local authorities are using old National Skills Academy for Construction (NSAfC) benchmarks from 2015 when setting targets for recruitment. This results in targets being much higher than can be reasonably expected to be delivered on a construction site 10 years on in the economic climate we are in today.
• Local authorities not accepting apprenticeships from other boroughs despite them being already employed by the contractor. This can incentivise employers to displace a current apprentice and restart a new one to avoid penalties, contributing to low retention and achievement rates for apprenticeships.
• Some local authorities may insist on a minimum period where the employer must use the authorities ‘job brokerage’ which may either not provide candidates at all, not provide suitable candidates, or stops advertising roles to a wider audience. This again can lead to the withdrawal and non-completion of apprenticeships.
• The carbon footprint for travel to work patterns can also be ignored by local authorities. As S106 agreements can insist upon candidates in the specific borough of the project, this can preclude apprentices who live a short walk from the project but are based in a different borough.

These issues are particularly prevalent, but not exclusive, to London.

Possible solutions

Research published by the City of London Corporation’s Skills for a Sustainable Skyline Taskforce shows that in London the workforce travels between boroughs for work. The taskforce has therefore proposed a “passport” system, where residents from boroughs of the subregional groups can count towards S106 targets. Similar work is also being undertaken by the West London Alliance.

The full implementation of current NSAfC KPIs would also support the realistic setting of S106 KPIs.

These solutions would benefit from policy that encourages and rewards local authorities for investing in skills. Without this the status quo is likely to remain, adversely impacting on the construction industry and its ability to attract, train and retain talent and skills within local economies.

Going forward we would welcome the opportunity to work with government at a national and local level to think about strengthening the role S106 agreements play in addressing the industry’s overall skills and training needs to get the best outcome for learners in local areas and to support industry skills demand in those areas. In particular, we would welcome a collaborative approach to exploring how S106 agreements are currently being used to drive positive outcomes for Employer Representative Bodies and Local Skills Improvement Plans focused on better linking local FE training provision to local skills demand, employment, and apprenticeship opportunities in construction.

February 2025