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Train times
Housebuilder – December 2009

As public funds become more scarce, those in charge of cash distribution are going to be more demanding. Take note - if you have not got an apprenticeship programme, start one now because, as Mark Smulian reports, this will be the key to future funds

It has been "jam today" for housebuilders from the Homes and Communities Agency as the government has pulled forward spending from future years into this to try to sustain the industry during the recession. But all the money for programmes such as Kickstart had to come from somewhere, and most of it has come from 2010/11, when the HCA's largesse will be limited indeed.

That means that laying hands on HCA funds next year, and in all probability several to come, depends on bids that closely match its demands. And that in turn means a demonstrable commitment to skills training, in particular for people from a project's locality. This ought not to be a surprise - it is after all the Homes and Communities Agency, and it wants to deliver both housing and regeneration. Its first corporate plan, published this autumn, is a complex document, but the skills policy could hardly be clearer.

Apprenticeship schemes

"Our aim is to build into all our funding agreements with housebuilders and contractors a condition requiring them to invest in training and apprenticeship schemes," it says. "This will help ensure there is a skilled workforce available when the economy picks up again." There will be training targets for all HCA funding streams, including both the temporary ones in the housing stimulus package and the mainstream National Affordable Housing Programme (NAHP).

In case anyone still has not got the message, Gill Taylor, chief executive of the HCA Academy, the agency's new skills body, says: "We will ask housebuilders at expression of interest stage if they have an apprenticeship scheme, or if they will set one up by March 2011, and those who say they are not interested will not get very far with us, while those willing to engage, either with a new scheme or by joining an existing one, will be advantaged in the bidding process." She adds: "We'll be using contractual requirements so homes and jobs go hand in hand and we take that very seriously, the government has made it a priority that any project with public investment also generates local employment and training opportunities, and so there will be a requirement for developers to provide for apprenticeships."

The HCA Academy's objectives include getting 100,000 people undertaking skills training over the 2009/11 period. Housing associations have been told that a commitment to apprenticeships will be a requirement of receiving HCA development funding. The agency is keen that trainees and other employees should where possible be drawn from the area in which a project is built. This concept has caused trouble in the past over whether "local" is a legitimate contract condition, or is anti-competitive. Taylor says: "If you said 'everyone who works on this must live within ten miles of the site' that would be wrong, but we ask housebuilders to demonstrate that they are committed to work with the local Jobcentre Plus, colleges and schools to provide apprenticeships and vocational training and that is allowed. We have gone into it legally and we are satisfied." The industry is of course in favour of apprenticeships, the question is: who pays?

Taylor seeks to reassure. "Builders need not run their own schemes, there can also be group training associations in which members share the overheads and the training, where several employers collaborate and councils and housing associations can also belong. "We are not able to offer funds [to builders] but there is a range of bodies that can such as Construction Skills, while the Learning and Skills Council contributes to the college training element. "I don't think there is a shortage of funds, though accessing them may be challenging.

Employers should look at it as training their next generation of employees ready for the upturn." Nigel Donohue, apprenticeship programme manager for Construction Skills, says government policy now means "commitments to training can be part of the key selection criteria used to choose contractors, and while they may all show a commitment to training some will be better or more extensive than others, or offer more training places, and that can be taken into account". He says employers in scope to the industry training levy can receive grants from his organisation, but are expected to meet 45% of the cost of apprentices aged over 19.

There is also a 1 million fund operated by Construction Skills to help builders take on apprentices displaced from another scheme, perhaps where a firm has gone out of business. Donohue argues that despite the extra cost the training requirement is in the industry's long-term interest. "There is still a target to build 240,000 homes a year to 2016 and the industry at the moment is doing 80,000, so the HCA training initiative will help to ensure there is the skilled labour force we need when we come out of recession. "Otherwise it will be like it was before, having to rely on migrant workers. We stopped training during the 1990s recession and it took a decade to recover from that." The Home Builders Federation can certainly see the argument in favour of training, but its head of external affairs John Slaughter is worried about how this will work in practice.

Site specific

"It all depends how they do it," he says. "If they just say you have to demonstrate you are providing training then I don't think that is a problem. "The problem comes if it is site specific because a particular project may run on a different timescale to a training scheme or not provide all the training opportunities required." Taylor counters that, while this is true, having group training associations should take care of the problem. Slaughter says group training is fine in theory but "at the initial stage and for the later management and administration there are costs that someone has to meet". He adds: "It is a fair enough argument that the HCA is spending public money and wants to set conditions. "But grants may not cover all the costs, and if it is too prescriptive there is a danger of it becoming a barrier to things happening." With its hands on the money the industry needs, the HCA will be well placed to get what it wants, at least for the moment. But if it does pile extra costs on builders in difficult times the training requirement may not work as it hopes.

Where the cash is coming from?

The HCA's corporate plan sets out the generality of its spending plans to March 2011, after which it is anyone's guess as there will have been a new public spending round. It is not a pretty sight. The National Affordable Housing Programme, which delivers the bulk of social housing construction funds, stands at 3.25 billion this year, though most is already committed. For 2010/11 it falls to 2.5 billion and while most is still up for grabs, 768 million looks a large gap. Matters are even worse for the Property and Regeneration Programme, an assortment of funding streams inherited from English Partnerships.

It stands at 406 million this year, will fall to 211 million in 2010/11 and is almost entirely committed anyway. The government raided funding for the four growth areas and 55 new growth points in July, to plough it into housing, and some did find its way into affordable homes new build. But the money had been intended for infrastructure ahead of development, and this year's 278 million will become next year's 190 million, leaving a question mark over whether these areas will be ready to build come an upturn. The HCA intends, subject to government agreement, to merge the disparate funding streams it inherited from English Partnerships and the Housing Corporation, so that has a single fund with a single set of rules. It will then distribute the bulk of this through negotiations with local authorities for each area, bringing its resources to bear on both housing and regeneration.