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Construction: Skill shortage threat to new home supply
Axis – 31 May 2004

Skilled builders were hard to find in the 1980s and it seems that very little has changed since then. But is prefabrication a cure-all solution or is it time to get a grip on training? asks Mark Smulian.

Suppose, just for a moment, that the land required to meet the Barker Review's call for 143,000 new homes a year became available tomorrow.

Suppose also that planning permission has been granted and the finance is in place. Everything would be ready for the builders to get to work, surely? Well, not quite.

The shortage of skilled construction workers is the Achilles heel of the government's attempts to increase the rate of house building. Supply of materials is less of an issue, but could become so if the government tries to deliver the scale of building figures suggested by Barker within its current projections for aggregate extraction.

The shortage of skills is not a new problem. As far back as the building boom of the late 1980s there have been shortages of skilled labour. While innumerable task forces have considered the issue, not a lot has changed.

It is not as if construction is badly paid as far as skilled manual work goes; the shortages have driven up labour costs, as any householder who has ever tried to hire a plumber knows all too well. The problem is that entry into vocational training has been only fitfully encouraged. Training capacity is lacking and the prospect of working on wet, cold, dirty building sites is offputting for many. Last autumn, a survey of 500 companies by the Construction Industry Training Board (CITB) found that nearly 70 per cent of specialist house builders were experiencing recruitment difficulties, the most pressing of which were in craft trades such as bricklaying, carpentry, plastering and plumbing.

The survey showed that the skills problem afflicts the whole country, not just the south. Pierre Williams, director of communications at the House Builders Federation, confirms that skill shortages remain 'quite acute'. He blames the industry's inability to solve this problem in part on a planning system which, as builders see it, has failed to deliver certainty of supply.

'We have seen booms and busts,' says Williams. 'There was a big bust in the early 1990s which led many people who were working in building to retire or leave the industry and they were not replaced. People are not going for employment in skilled trades, and if they are to do so it is very important that there is continuity of employment as far as possible, so that they have some career security.'

Drive to fill universities

The problem is compounded by the government's drive to get at least half of school leavers into university. This has meant less emphasis on the possibilities opened up for young people by training in a craft skill.

Many are being ushered into further or higher education when this might not be the most suitable route for them.

While it is nearly 15 years since the construction industry's last spectacular bust, Williams is quick to point out that it takes a long time for a boom to feed through into young people getting the idea that they could have a promising career in specialised trades and then being trained for them. 'Wage rates have gone up, which has made construction an attractively paid area and better than some academic careers. However, these crafts take time to learn,' he observes.

House builders will only invest significantly in training when they feel they have a stable long-term workload, and the federation believes that the planning system denies them this. Thus, any sudden boom that might be triggered by the Barker Review or by the growth areas in the South East might depend on workers from the new European Union member states - although Williams recognises that 'it would be nice to think that we could grow our own'.

Nick Cook, managing director of planning at Bellway, a company heavily involved in regeneration areas, says: 'Skill shortages are a feature of the industry and we do need to encourage more young people to join the sector. However, initiatives such as the CITB increasing the grant available to firms taking apprentices by a third to 8,000 are helping.'

The CITB is among the last redoubts of the statutory training system of the 1960s. All construction companies above a certain size are obliged to pay a fee to it, which they can reclaim in grants if they offer training.

The idea is to make the whole industry pay for training. With a highly mobile workforce, often based on subcontracting, firms that invest in training might otherwise simply see their trained workers poached by less scrupulous rivals offering higher pay to workers trained by another company.

Yet even this unusual degree of official help leaves large gaps unfilled.

Peter Cobb, director of planning and architecture at Fairview New Homes, told a parliamentary inquiry that there is 'a profound skills shortage at an operational level and, to be blunt, we could build more homes if we could actually find people to do it'. Cobb accepts that it appears to be unfashionable for school leavers to take up a skilled trade, 'although the reality is that you can get a very good income working from a skills base'.

Linda Clarke, professor of European industrial relations at the University of Westminster, is rather sceptical about the industry's tales of woe.

While skills shortages are particularly acute in housing, Clarke says the crux of the problem is the industry's practice of relying on labour-only subcontractors and self-employed workers, with only small numbers directly employed by builders.

Around 600,000 people are registered as self-employed building workers.

Direct employment is more common among social housing specialists, but skill shortages are only slightly less serious there. 'Labour-only and self-employment are the basic problems. Few subcontractors and no self-employed people invest in training,' Clarke points out.

But even if direct employment makes a comeback, she thinks the training schemes offered are wrong. 'Apprenticeship needs a total rethink. I'm not sure it is a good idea to put youngsters straight on a building site.

They should have a year of off-job training first,' she says. 'Even where training is offered, contractors have become so specialised that a young person is trained only in a very narrow skill.'

She points out that the government target of 50 per cent of school leavers going to further and higher education still leaves 50 per cent who might be interested in craft training. 'In Germany and the Netherlands, they collaborate to provide training led by groups of employers,' she says. 'Here, there are few opportunities, but when good training schemes are offered there is high demand.'

Quality training in construction

Local authority direct labour organisations (DLOs) are one of the few remaining bastions of high-quality training in construction skills. Clarke notes that a scheme offered by Leicester City Council's DLO had around 200 applicants for a handful of places, 'while builders up the road complained that no-one wanted to work in the industry'. With councils largely shut out of house building by government policy, it would be ironic if the building industry had to look to their DLOs for the workers needed to deliver the government's vision.

One potential solution is increased use of prefabrication and the 'modern methods of construction' advocated by the Housing Corporation.

Homes built to standard designs from standard factory components that are assembled on site should work out cheaper than those built by traditional methods because of the economies of scale available.

Production line manufacture demands factory skills rather than the higher technical competencies of construction trades. Assembling the components on site would also be a relatively simple task, with conventional construction work more or less limited to site preparation and foundations. However, prefabrication carries a large upfront cost in equipping a factory in the first place, something no-one is likely to do without a reliable market.

Williams sees a familiar pitfall in the way of this vision. 'While in general we are happy with prefabrication, the planning system again has to deliver certainty for builders to invest in it and for factories to know that they can recoup their investment,' he says. Nor would it solve the skills problem entirely, as 'people will still want traditionally built houses and skills are also needed for refurbishment'.

While supplies of construction materials are not generally a problem, a question mark hangs over the aggregates used to prepare sites - sand, gravel and crushed rock. Jerry McLaughlin, economist at the Quarry Products Association, says the ODPM is projecting a one per cent annual increase in the 200 million tonnes of aggregates used each year to 2016.

'The sustainable communities plan is the ODPM's priority and it is also in the lead on aggregates planning, so in theory there should be sufficient supply,' McLaughlin maintains. 'In practice, the supply picture depends a lot on how minerals planning authorities interpret and implement the ODPM guidance.'

The additional homes proposed by Barker, coming on top of those planned for, will generate more demand for aggregates. Quite how that fits into the equation is not clear, McLaughlin admits. But one key to getting sufficient aggregates into the South East will be the granting of licences for minerals dredging in the eastern English Channel, the subject of a lengthy application process.

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