Executive Summary - Skills Support for the...

Future skills needs in the York, North Yorkshire and East Riding Local Enterprise Partnership Area

Transitional Area: East Riding

Construction:Specialised construction activities

Beyond 2030 has produced this Report on behalf of Calderdale College and as part of the College’s delivery of the 2017-18 ESF funded Skills Support for the Workforce programme across the York, North Yorkshire and East Riding Local Enterprise Partnership Area.

June 2018

YNYER Future Skills Needs – Construction Sector. Specialised trades subsector

Executive Summary

York, North Yorkshire and East Riding Local Enterprise Partnership (YNYER LEP) has commissioned a series of research reports, which allow key decision makers to understand more fully the future skills needs of the YNYER LEPs eight identified priority sectors.

Construction is extremely significant to the UK, contributing £130 billion in 2016 to its economy. There are four key subsectors: construction of buildings, civil engineering, specialised construction activities and architecture.

This report considers the specialised trades subsector within the wider construction sector. This subsector employs 38% of the wider construction sector workforce across the LEP. It is the largest of all construction subsectors.

Beyond 2030 spoke with 15 subsector employers across the area and relevant stakeholders such as Construction Industry Training Board (CITB), North Yorkshire Construction Training Group, East Riding Council, APHC to inform this report, in addition to drawing on the sources mentioned in the bibliography.

Transitional Area of East Riding

East Riding has a resident population of 337,700, of which nearly 160,000 individuals are employed. Employment rates stand at 76.2%.

The East Riding economy is mainly based on agriculture and along with tourism, has contributed to the rural and seaside character of the area.

Large employment sectors include health and social work, manufacturing, and retail.

Specialised trades subsector in East Riding

This report considers construction business which specialise in one trade, for example, an electrical firm, or a plastering firm.

Beyond 2030 has used the same SIC codes as in other comparable reports (43.1, 43.2, 43.3, 43.9).

The subsector has 1,175 firms employing 3,500 individuals. 95% of those firms employ less than 10 people. The largest parts of the subsector relate to electrical, plumbing and installation activities. People working in the subsector are skilled and there are few low skilled jobs now or

projected to be in the future. This subsector is characterised by L2/3 or Apprenticeship qualifications

Few business owners consider themselves to be managers. There are few women or young people in the subsector. It is difficult to recruit carpenters or brick layers, with it being easier to hire scaffolders and

floorers. Brexit is expected to affect recruitment in these skilled roles. In the next five years it is expected that there will be significant construction projects in East

Riding amounting to approximately £320 million of spending. Whilst recruitment can be challenging, retention is not an obvious issue.

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Being on a recognised register is essential in many occupations. The industries in this subsector are highly regulated with high levels of training necessary to

be legally compliant. This has impacts on non-mandatory training investment. Apprenticeships starts on relevant subsector frameworks account for only 3% of all starts in

the area. Whilst there is support for the principle of Apprenticeships, the practice is much more

difficult, largely because of the size of many of the firms. Employment in the subsector is expected to grow by 14.7% between 2014 and 2024. Expectations are that there will be increased demand for higher level skills and less for

lower. East Riding Council has set out a requirement for the construction of 23,800 new houses

between 2012 and 2029 (averaging at 1,400 per year). There are numerous external factors which will impact on the subsector in the next few

years.

Acknowledgements

Beyond 2030 would like to extend our thanks to the 15 employers in the LEP area and both local and national stakeholders, including CITB, North Yorkshire Construction Training Group, East Riding Council, APHC who provided their time and assistance in giving us valuable insights into the issues facing the subsector.

Beyond 2030 is indebted to Calderdale College for their guidance and support in completing this report.

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ContentsExecutive Summary...............................................................................................................................2

Acknowledgements...............................................................................................................................3

1 Introduction...................................................................................................................................5

1.1 Construction sector...............................................................................................................5

1.2 East Riding TA........................................................................................................................6

2 Specialised construction activities subsector in East Riding..........................................................7

2.1 Introduction...........................................................................................................................7

2.1.1 Construction in East Riding............................................................................................7

2.1.2 Subsector definition.......................................................................................................8

2.2 Specialised trades subsector economy and employment......................................................9

2.2.1 Jobs people do.............................................................................................................10

2.3 Skills needs – Primary research testing the data..................................................................12

2.3.1 Recruitment.................................................................................................................12

2.3.2 What are the current skills needs and skills gaps?.......................................................13

2.3.3 Training........................................................................................................................14

2.3.4 Apprenticeships...........................................................................................................15

2.4 Future requirements............................................................................................................15

2.4.1 Sector growth..............................................................................................................15

2.4.2 Replacement need and total demand..........................................................................16

2.4.3 Qualifications...............................................................................................................17

2.4.4 Future roles and skills..................................................................................................17

2.5 Drivers of change.................................................................................................................18

2.5.1 Political........................................................................................................................18

2.5.2 Economic.....................................................................................................................19

2.5.3 Social............................................................................................................................20

2.5.4 Technological...............................................................................................................20

2.5.5 Environmental..............................................................................................................20

3 Bibliography.................................................................................................................................22

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1 Introduction

The York, North Yorkshire and East Riding Local Enterprise Partnership (YNYER LEP) has commissioned a series of research reports which informs key decision makers as to the future skills needs of eight identified priority sectors. These sectors are:

• Visitor Economy. • Food Manufacture.• Voluntary, Community and Social Enterprise (VCSE). • Health and Social Care. • Construction. • Engineering. • Agri-tech.• Bio Renewables.

As the economic and political situation changes, it is almost universally acknowledged that improved skills, not least because of the link to enhanced productivity, is a key way by which to improve economic well-being. Consequently, LEPs across England are looking at how best to support sectors with growth potential and which therefore may generate future wealth and prosperity.

In this research, Beyond 2030 seeks to understand fully the future skills needs required to ensure that within the YNYER LEP area, priority sectors can recruit and develop world class employees.

As well as wanting to understand the characteristics and future needs of the eight sectors, the LEP hopes to develop an understanding of the most significant subsectors in each priority area by geography.

1.1 Construction sector

Construction is highly significant to the economy, contributing £130 billion in 2016 to its economy. It creates, builds, manufactures and maintains workplaces, enabling businesses to flourish as well as providing the infrastructure that underpins our daily lives.

There are four key subsectors that make up the construction sector (ONS 2009):

Construction of buildings. Civil engineering. Specialised construction activities. Architecture.

This report considers the specialised trades subsector within the More Developed Area (MDA) of York and North Yorkshire. The subsector accounts for 38% of the construction sector employment across the LEP, which is the largest subsector in construction.

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1.2 East Riding TA

East Riding is located in the wider region of Yorkshire and Humber. It borders North Yorkshire, South Yorkshire and Lincolnshire and covers over 900 square miles. The Humber Estuary and North Sea mark its southern and eastern limits. There are few large settlements, with Beverley, Bridlington and Goole being amongst the best known. Around half of the population live in rural communities.

The economy is mainly based on agriculture and this, along with tourism, has contributed to the rural and seaside character of East Riding. The area has many historic buildings, nature reserves and the Yorkshire Wolds Way long-distance footpath.

The open and maritime aspects and lack of major urban developments have led to the county being allocated relatively high targets for the generation of energy from renewable sources. Easington Gas Terminal, owned and operated by Centrica Storage, is one of three main terminals that process gas from the UK Continental Shelf.

Goole is a significant dock area which serves as a significant employer in logistics and related sectors.

Bishop Burton is home to Bishop Burton College, a further education and higher education college specialising in agriculture and equine studies.

East Riding has a resident population of 337,700, which equates to 30% of the LEP’s total resident population (ONS 2017). Nearly 160,000 individuals are employed in the area. Employment rates stand at 76.2% (Table 1). The area has a growing and increasingly ageing population and deprivation is evident in some areas (East Riding Council 2016).

Using YNYER LEP as the standard, differences in the productivity, skills and employment across East Riding can be seen. Table 1 illustrates where the area performs better (green) or worse (red). For example, the job density is much lower in East Riding, as is the employment rate compared to the YNYER LEP area.

The economic inactivity rate is also much higher in East Riding (20.6%). While many of these are either retired, students, or looking after the home/family, it is worth noting that 24% (9,800) would like employment (ONS 2017).

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Table 1 Productivity, skills and jobs

Measure East Riding

North Yorkshire

York YNYER LEP

England

Gross Weekly pay full time (£) (place of residence, 2016) £498.30 £489.10 £509.60 £504.70 £544.70

Job density (the ratio of total jobs to population aged 16-64, 2015) 0.69 0.96 0.85 0.86 0.84

Employment Rate (Apr 16-Mar 17) 76.2% 80.7% 77.5% 78.8% 75.6%Self-Employment (Apr 16-Mar 17) 10.4% 13.9% 9.7% 12.0% 10.9%Full-time workers (employees) 66.1% 63.1% 62.7 63.8% 69.1%Unemployment Rate (Apr 16-Mar 17) 3.7% 2.9% 3.0% 3.2% 4.4%Economically Inactive (Apr 16-Mar 17) 20.6% 16.8% 20.0% 18.5% 20.9%

Level 4+ (Jan 2016-Dec 2016) 36.5% 35.9% 42.7% 37.5% 37.9%No Qualifications (Jan 2016-Dec 2016) 6.2% 6.5% 6.1% 6.3% 7.8%

Source: Office for National Statistics: LEP and National Labour Market Profiles; GVA for Local Enterprise Partnerships

2 Specialised construction activities subsector in East Riding

2.1 Introduction

The construction process is a complex one, starting with design and planning through production to ongoing maintenance and refurbishments. Construction work is almost entirely conducted on a project by project basis. Contractors draw together teams of people to complete different areas of the build on-site. Much of the work is managed by a main contractor who deals with the client but who subcontracts part of it to smaller firms who specialise in particular aspects of the process.

Construction stimulates investment and makes a significant social and economic contribution to communities, generating a flow of skilled jobs and supply chain benefits. For every £1 invested in construction, there is an increase of £2.84 in total economic activity (CBI 2013).

2.1.1 Construction in East Riding

In order for the growth potential in East Riding to be realised, there needs to be capacity in a number of enabling sectors (East Riding Council 2018). Enabling sectors are those which are strategically important but do not drive growth alone. East Riding Council sees construction as one such sector.

East Riding Council reported to Beyond 2030 that the ‘construction sector was vibrant’. Four development areas - Goole Junction 36, Paul, Beverley Grovehill and Pocklington – have good opportunities for inward investment.

The construction sector contributed £390 million to the East Riding economy in 2015 and has reported steady growth since 2012 (East Riding Council 2018).

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However, the draft economic strategy action plan for East Riding, notes that there is an underrepresentation of higher skilled employment opportunities locally and a skills shortage in some specialised sectors including construction, manufacturing and health and social care (East Riding Council 2018). They recognise that the need to enhance educational attainment, support those furthest from the labour market into employment and address skills gaps is essential to drive inclusive growth.

2.1.2 Subsector definition

This report is looking specifically at specialised construction activities (special trades).

These activities are usually specialised in one aspect common to different structures, requiring specialised skills or equipment such as pile-driving, foundation work, carcass work, concrete work, brick laying, stone setting, scaffolding, roof covering, etc. Specialised construction activities are mostly carried out under subcontract, but especially in repair construction it is done directly for the owner of the property.

The subsector also includes building finishing and building completion activities.

So, the installation of all kinds of utilities that make the construction function as such are also within this group. These activities are usually performed at the site of the construction, although parts of the job may be carried out in a specialised location. Included are activities such as plumbing, installation of heating and air-conditioning systems, antennas, alarm systems and other electrical work, sprinkler systems, elevators and escalators, etc. Also included are insulation work (water, heat, sound), sheet metal work, commercial refrigerating work, the installation of illumination and signalling systems for roads, railways, airports, harbours, etc. Repair of the above-mentioned installations is also included.

Building completion activities encompass activities that contribute to the completion or finishing of a construction such as glazing, plastering, painting, floor and wall tiling or covering with other materials like parquet, carpets, wallpaper, etc., floor sanding, finish carpentry, acoustical work, cleaning of the exterior, etc. Repairs to the above-mentioned completion or finishing work are also included.

Therefore, in this report Beyond 2030 are looking at businesses that are specialist in just one trade. For example, an electrical firm, or a plastering firm, or scaffolding firm.

For the following report, Beyond 2030 have defined special trades subsector using the Standard Industrial Classification of Economic Activity. SIC is a standard measure of activity used by government (ONS 2009) and are normally used in reports such as this (see Sector Skills Assessments by UKCES, 2014).

SIC Description 43.1 Demolition and site preparation43.2 Electrical, plumbing and other construction installation activities43.3 Building completion and finishing43.9 Other specialised construction activities (roofing activities, scaffolding)

Source (ONS 2009)

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2.2 Specialised trades subsector economy and employment

Across East Riding there are 1,175 firms working in special trades. Examples of these companies include:

ABC Scaffolding http://abcscaffolding.yolasite.com/ C&C Decorators http://candcdecorators.co.uk/ DEM https://www.deminstallations.com/ East Yorkshire Plastering https://eastyorkshireplastering.co.uk/ East Yorkshire Roofing Services Limited http://www.eastyorkshireroofingservices.co.uk/ Elecforce Ltd https://www.elecforce.org.uk/ GCS Scaffolding http://www.gcsscaffolding.com/ KLS Electrical Contracting http://www.klselectrical-contracting.co.uk/ MP Electrics http://mpelectricsdriffield.co.uk/ MWF Plastering http://www.mwfplastering.co.uk/ Rafters Electrical Services Ltd http://rafterselectrical.co.uk/ Rob Dawson Decorators http://www.dawsondecorators.co.uk/ Shores Decorators http://www.shoresdecorators.co.uk S&R Jeffery Plumbing and Heating http://jefferyplumbing.co.uk/ The Yorkshire Demolition and Reclamation Company Ltd

http://www.yorkshiredemolition.co.uk/ Warner Electrical Contractors Ltd http://warner-electrical-contractors.co.uk/ Zircon Flooring Limited http://www.zirconflooring.co.uk/

The subsector employs around 3,500 individuals. 83% of employees work full-time in the subsector (ONS 2016).

95% of establishments employ less than 10 individuals in the subsector and is an obvious issue when it comes to raising skills levels. This is greater than the East Riding all economy where 85% employ less than 10 individuals. The subsector has no medium (firms employing between 50 and 249) or large employers. This is very important to any future work aimed at engaging with the subsector.

Figure 1 Size of establishments in the special trades subsector

87%

8%5%

Micro (0 to 4) Micro (5 to 9)Small (10 to 49)

Source (ONS 2017)

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http://www.zirconflooring.co.uk/

http://warner-electrical-contractors.co.uk/

http://www.yorkshiredemolition.co.uk/

http://jefferyplumbing.co.uk/

http://www.shoresdecorators.co.uk/

http://www.dawsondecorators.co.uk/

http://rafterselectrical.co.uk/

http://www.mwfplastering.co.uk/

http://mpelectricsdriffield.co.uk/

http://www.klselectrical-contracting.co.uk/

http://www.gcsscaffolding.com/

https://www.elecforce.org.uk/

http://www.eastyorkshireroofingservices.co.uk/

https://eastyorkshireplastering.co.uk/

https://www.deminstallations.com/

http://candcdecorators.co.uk/

http://abcscaffolding.yolasite.com/


Electrical, plumbing and other construction installation activities accounts for the greatest employment in the specialised trades subsector, employing 1,750 individuals across 570 businesses in the area (Table 2).

Building completion and finishing (i.e. plastering, painting, floor covering etc.) accounts for a further 1,000 workers and 425 businesses.

Table 2 Business and employment numbers of specialised trades subsector activities, East Riding

Number of businesses

Employment

Demolition and site preparation 20 125Electrical, plumbing and other construction installation activities 570 1,750Building completion and finishing 425 1,000Other specialised construction activities (roofing activities, scaffolding)

160 500

Source (ONS 2017) (ONS 2016)

2.2.1 Jobs people do

The major occupational groups for the subsector in Yorkshire and Humber and the UK are shown in the table below.

The greatest difference in the proportion of employment for the subsector compared to the all economy occurs in skilled trades occupations. This occupational group accounts for nearly three quarters (72%) of the workforce compared to 11% in the all economy of Yorkshire and Humber. This is far from surprising given that this sub sector is characterised by skilled occupations.

Skilled construction and building trades include the occupations of:

Bricklayers and masons. Roofers, roof tilers and slaters. Plumbers and heating and ventilating engineers. Carpenters and joiners. Glaziers, window fabricators and fitters. Plasterers. Floorers and wall tilers. Painters and decorators. Construction and building trades n.e.c. (not elsewhere classified).

Entry to many of the skilled trades roles in construction is typically through an apprenticeship or vocational qualification (NVQ/SVQ) at level 2 or 3.

The subsector has a much smaller proportion of managers than average. Just 4% of those working in the subsector consider themselves to be managers. Yet many (87%) of firms in the subsector across East Riding, employ less than 4 individuals, many being sole traders. This is clearly an area of skills development for the future.

Table 3 Occupational groups in Specialised Trades subsector

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Special trades (Y&H)

Special trades (UK)

All economy (Y&H)

Managers, Directors and Senior Officials 4% 6% 11%Professional Occupations 3% 5% 20%Associate Professional and Technical Occupations

5% 4% 14%

Administrative and Secretarial Occupations 8% 6% 10%Skilled Trades Occupations 72% 67% 11%Personal care services <1% <1% 9%Sales and Customer Service Occupations 1% 1% 8%Process, Plant and Machine Operatives 2% 6% 6%Elementary Occupations 4% 5% 10%

Source (Office for National Statistics; Social Survey Division; Northern Ireland Statistics and Research Agency. 2017)

The job roles which have the greatest number employed in special trades subsector across Yorkshire and Humber are shown in the table below. They are all skilled occupations.

Table 4 Top five jobs roles in special trades subsector, Yorkshire and Humber

Occupation Number employed 5315 Carpenters and joiners 10,8005241 Electricians and electrical fitters 9,8005314 Plumbers and heating and ventilating engineers 9,3005319 Construction and building trades n.e.c. 7,0005323 Painters and decorators 6,000

Source (Office for National Statistics; Social Survey Division; Northern Ireland Statistics and Research Agency. 2017) * not elsewhere classified

Further occupations in the subsector include other skilled trades like plasters, roofers, scaffolders, bricklayers, telecommunication engineers and furniture makers, as well as cross-sector roles including sales, business development, book-keepers and other administrative roles.

The sector has few women working in it, with just 9% of the Yorkshire and Humber special trades workforce being female.

Young people are underrepresented in the subsector compared to the economy as a whole. Only 6% are aged under 25 and 17% are over the age of 55 in the subsector. This compares to 13% and 18% respectively in the whole economy. A third (33%) of the subsector workforce are aged between 45 and 54.

With an ageing workforce and a poor pipeline of young people, the subsector faces significant recruitment challenges moving forward.

Figure 2 Age profile of the special trades subsector, Yorkshire and Humber

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Under 25 25 to 34 35 to 44 45 to 54 55 to 64 65+0%

5%

10%

15%

20%

25%

30%

35%

Special trades All economy


2.3 Skills needs – Primary research testing the data

2.3.1 Recruitment

Recruitment within the subsector, does not appear to be particularly high. This could be linked to the fact that 95% of the firms in the subsector are micro and the incidence of such firms reporting vacancies is low. For example, the Employer Skills Survey found that just 10% of micro firms reported a vacancy compared to 71% of large firms (Vivian, et al. 2016). This was echoed in our research with one micro firm reporting that ‘at present and possibly into the future I cannot foresee any changes that will be made, as we are a small company and staff changes are unlikely’.

However, there is concern, from contractors who employ/subcontract specialist trades, on larger construction projects, relating to a perceived lack of suitable trades people and the impact this will have moving forward.

There are numerous reports indicating a need for skilled workers (RICS 2017) (Federation of Master Builders 2017) (Ableskills 2017). The Manpower 2016/17 Talent Shortage Survey reports that skilled trades are the top jobs for which employers are having difficulty recruiting. Specifically, carpenters/joiners are the most difficult to employ in the latest survey by the Federation of Master Builders (FMB 2017). Bricklayers, site managers and supervisors were also hard to come by. In contrast, scaffolders and floorers were the easiest to hire.

Demand for temporary construction workers has increased over the last year. 43% of construction recruitment firms reporting that finding bricklayers is particularly difficult (REC 2016). A brick laying firm in the area reported that the availability of skills was the most pressing threat facing the firm.

Furthermore, construction recruiters predicted that a vote to leave the EU will exacerbate the shortage of appropriately qualified candidates. 59% say that Brexit will make it more difficult to find suitable workers to fill vacancies (REC 2016).

The Government Construction Pipeline shows that around £320 million worth of projects are planned in the East Riding area over the next five years (IPA 2015). This is spread across 14 projects within sectors such as education, justice and transport.

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To fulfil these project commitments and to keep up with the announced housing plans, construction workers are needed. With continued growth in the construction sector, specialised firms are seeing opportunities.

The subsector has a lack of young people. Although the number of young people (under 19) starting an apprenticeship has risen nationally from 8,250 in 2011/12 to 10,880 in 2016/17 (DfE, SFA and E&SFA 2017) it still falls short of the necessary numbers to carry out all projects (Agencycentral 2015).

2.3.2 What are the current skills needs and skills gaps?

2.3.2.1 Skills levels Just 8% of the subsector workforce in Yorkshire and Humber hold a level 4 or above compared to 38% in the whole economy. 34% of the subsector do not hold a level 2 qualification.

The sector has a much greater proportion of individuals with a trade apprenticeship (22% compared to the all economy of 4%). This is largely explained by the fact that a third of the workforce are skilled trades which generally has entry routes via apprenticeships.

Figure 3 Qualifications levels of special trades subsector

NQ

F Le

vel 4

and

abo

ve

NQ

F Le

vel 3

Trad

e ap

pren

tices

hips

NQ

F Le

vel 2

Belo

w N

QF

Leve

l 2

Oth

er q

ualifi

catio

ns

No

qual

ifica

tions

0%10%20%30%40%

Special trades (Y&H) Special trades (UK) All economy Y&H


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A small cladding firm expected continued growth in the future through construction growth, particularly through changes in construction methods. The business is linked to the use of modular construction techniques and the composite panel industry and their products serve the need for increasing mechanisation and improvements in health & safety.


2.3.2.2 Skills needs / gaps At the UK construction sector level, 12% of firms report having skills gaps (Vivian, et al. 2016). East Riding Council reported that construction sector in the area is short of skilled workers. However, many firms Beyond 2030 spoke with did not report any skills gaps. The undertook training so staff had the necessary skills.

Many roles within the sector are specialist in nature and require specialist training. Most training and experience is done on-the-job, with many individuals completing NVQs or apprenticeships.

In some instances, workers need to be registered. For example, to carry out gas works (i.e. on boilers, cookers, fires and all other gas appliances) businesses and engineers by law must be on the Gas Safe Registered (Gas Safe Register 2017). Gas Safe Register replaced CORGI as the gas registration body in 2009.

2.3.3 Training

As a high compliance sector, employers/contractors are obliged to ensure that their staff hold/undertake the relevant training and development that ensures the safety of construction sites. These are often around core areas such as health and safety, ensuring compliance with legislation (i.e. site operators licence).

A clear message from our primary research is that health and safety is a training priority.

Identification of the appropriate training can be easily recognised by the individuals holding special identification cards. There are a number available, with some well-known examples following below.

2.3.3.1 Validation A number of accreditation schemes exist in the subsector which enable contractors and workers to demonstrate their skills and knowledge. Many are affiliated to the Construction Skills Certification Scheme (CSCS) (CSCS 2017) and include:

Electricians: Electrotechnical certification scheme (ECS) displays the qualifications and status of electrical professionals. It is affiliated to the Construction Skills Certification Scheme (CSCS) and is relevant to the electrotechnical industry (ECS 2017).

Scaffolders: Construction Industry Scaffolders Record Scheme (CISRS) is the recognised training scheme for scaffolders and is the preferred qualification of major organisations (CISRS 2017). Like the CSCS card there are several types of card depending on position and experience.

Plumbers: Registration cards are becoming essential for all trades people working in the Plumbing Industry. The Joint Industry Board for Plumbing Mechanical Engineering Services (JIB PHMES) CSCS Registration Card shows site managers, employers and other trades people that individuals are qualified for the work they are doing, and have passed a Health & Safety Test. The Health & Safety Test ensures that you have been trained to the required legal standard (JIB PHMES 2017).

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Cost and time were the main drag factors on engaging non- mandatory training. In a robustly regulated sector, non-mandatory training is often overlooked.

2.3.4 Apprenticeships

Construction apprenticeships, are classified under the sector subject area ‘Construction, planning and built environment sector’.

140 individuals started a ‘Construction, planning and built environment sector’ apprenticeship across East Riding in 2016/17. This was in line with previous years’ performances.

Starts in this sector subject area accounted for just 3% of all starts in the area.

Table 5 Apprenticeship starts in East Riding

Subject Sector Area 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17Construction, Planning and the Built Environment

100 70 100 150 130 140

ALL 6,040 5,010 4,830 5,360 5,070 5,390Source (DfE, SFA and E&SFA 2017)

The sector has numerous apprenticeships on offer ranging from level 2 to level 6.

In our primary work Beyond 2030 discovered mixed support for Apprenticeships. Micro firms tended to report them as not being of interest, reporting challenges relating to a lack of time, cost and finding interested candidates. This is not unusual and relates as much to the size of the firm as it does to the particular subsector. But a brick laying firm did make use of them, reporting that they help with skills gaps and challenges connected with recruitment.

Also, to note is that many skilled trades working on larger sites are contractors, and so by their very nature are smaller employers, and as highlighted previously, there is a lack of management in the sector which inevitably has implications for the procurement of training.

2.4 Future requirements

2.4.1 Sector growth

Future workforce projections for the subsector are available at the wider region of Yorkshire and Humber rather than the North Yorkshire area, but this still provides a useful indication of changes in the workforce moving forward.

Employment in the Yorkshire and Humber special trades subsector is expected to increase by 14.7% between 2014 and 2024 – or by 13,000. This contrasts to the region’s all sector economy where growth of 3.9% is anticipated (UKCES 2016).

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Employment growth is expected across all occupational groups but particularly for skilled trades, managerial and professional occupations (Figure 4).

Figure 4 Special trade subsector occupational change, 2014 -2024 (000s), Yorkshire and Humber

Elementary Occupations

Transport and Machine Operatives

Sales and Customer Service Occupations

Personal Service Occupations

Skilled Trades Occupations

Administrative, Clerical and Secretarial Occupations

Associate Professional and Technical Occupations

Professional Occupations

Managers and Senior Officials

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Source: UKCES Working Futures VI

2.4.2 Replacement need and total demand

Overall the subsector in Yorkshire and Humber is expected to have approximately 45,000 job openings between 2014 and 2024, but to note is that 32,000 will be replacement demand.

Half (47%) of all job openings will be within skilled trades occupations and a further 12% in managerial roles (Figure 5). Roles such as wood trades and interior fit out, scaffolders, construction managers and trades supervisors will be sought (CITB 2017).

Figure 5 Job openings in the special trades subsector by occupation 2014 - 2024 (000s) in Y&H

Man

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Sen

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ff...

Prof

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Asso

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Pro

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Adm

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Skill

ed T

rade

s Occ

upat

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Pers

onal

Ser

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Occ

up...

Sale

s and

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er...

Tran

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Elem

enta

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5

10

15

20

25Expansion demand Replacement demand Job openings


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2.4.3 Qualifications

The change in qualification levels of the workforce shows that there will be a shift towards more people holding higher qualifications (Table 6).

By 2024, 29% of people employed in the special trade subsector are expected to be qualified at level 4 and above (less than Yorkshire and Humber region all sector proportion of 47%), whilst the proportion of people with no formal qualifications or level 1 is expected to fall to 17%. This is a really important shift. For a sector which has long been considered as an industry dependent on physical strength, there is and will be yet, a clear shift towards skills.

Table 6 Change in qualification profile of the special trades subsector, Yorkshire and Humber

No qualifications and level 1 Level 2 Level 3 Level 4 – 6 Level 7 – 8

Qualification example

GSCE (grades D – G)BTEC level 1

GCSE (grades A* - C) NVQ Level 2

AS & A level BTEC National

Certificate of higher education (L4)Foundation degree (L5)Bachelor’s degree (L6)

Master’s degree (L7)Doctorate (L8)

2014 level 2024 level

21,68117,618

23,40527,173

28,32426,975

12,66625,140

1,8773,967

2014 – 2024 % change -19% 16% -5% 98% 111%2014 % share 25% 27% 32% 14% 2%2024 % share 17% 27% 27% 25% 4%


2.4.4 Future roles and skills

The above Working Future projections demonstrate that there will be growth in the sector, with skills in the subsector rising.

Employers have not necessarily identified any new roles developing in the next 6 years; rather the same sorts of positions that currently exist will be required. The need for CSCS cards and other similar cards for skilled trades to work on construction sites is helping to formalise the need for training and skills.

Looking forwards, any new housing or commercial development will require skilled trades such as scaffolders, electricians, roofers, floor covering, gas engineers etc. Likewise, properties in need of refurbishment or extensions will also need them.

East Riding Local Plan for the period of 2012 -2029 sets out a minimum requirement of 23,800 new houses (East Riding Council 2017), meaning on average that 1,400 new houses are required each year.

Some larger schemes that the council is currently involved in include:

Bridlington Town Centre Scheme. Wolfreton School Consolidation.

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Land south of Beverley has been earmarked for future development. Potential future developments are likely to include new housing and employment, an extension to Keldmarsh Primary School, new areas of open space and a park and ride facility next to the southern relief road (East Riding Council 2017).

2.5 Drivers of change

2.5.1 Political

Leaving the European Union

Plans to leave the EU, following the UK European Union membership referendum in June 2016, have left the construction sector facing an uncertain future.

The effect on inward migration particularly from EU countries could affect the sector’s ability to recruit and retain skilled staff and is by far the biggest issue employers have raised with us.

The recent announcement that EU workers will have an absolute right to remain here after the leave date has been confirmed by the Prime Minister and will provide some reassurance (BBC 2017).

When the future regarding leaving the EU is clearer, companies will feel in a better position to make investment decisions. However, it is worth noting that most firms are small and so the impact of the referendum is not being felt at these macro levels relating to investment decisions, however skills shortages is a very big issue and will be a real challenge for future policy makers.

Government Construction Strategy: 2016 - 2020

The Government Construction Strategy sets out a new plan to increase productivity in government construction projects to deliver £1.7 billion in savings and support 20,000 apprenticeships over the course of this parliament (Cabinet Office & IPA 2016). This is clearly set to be a massive driver of skills development.

Housing Policy

Housing is one of the government’s key priorities (DCLG 2017). The availability and affordability of housing has become increasingly discussed. The government has two strategic housing objectives:

1. Driving up housing supply, with the ambition of delivering a million new homes between 2015 and 2020.

2. Increasing home ownership.

Government plans to invest an additional £10million in the Help to Buy Equity Loan, which could help 135,000 more people to buy homes by 2021 (DCLG 2017). In addition, the Autumn Budget 2017, saw the announcement of the abolition of stamp duty for first-time buyers for homes worth up to £300,000. This drive to increase housing stock and ownership will require a skilled workforce to meet these targets.

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Common Minimum Standards for Construction

The Common Minimum Standards for Construction (IPA 2017) sets out the minimum set of standards that apply to all public construction projects. Meeting these standards will support the delivery of value for money and wider policy objectives alongside enabling coordinated engagement with industry.

Legislation / Regulations

This is a subsector which is heavily regulated.

Employers are not expecting there to be significant new legislation in the next few years, rather they are anticipating many current standards to move from EU legislation into UK law.

2.5.2 Economic

Rising Costs

The whole subsector is affected by rising operating costs. For example, the increasing cost of raw products impacts on the whole sector. Consequently, resource management and budgetary controls are important and will become more important in future years.

Interest Rates

November 2017, saw the first interest rate rise in over a decade from 0.25% to 0.5%. While this interest rate increase will have little to no immediate impact on the construction industry, any further rises will have an impact. For example, projects will become more expensive, borrowing will cost more and so growth in the sector could slow.

Payroll

Running a payroll can be a complicated. Not only do construction employers need to consider National Minimum Wage (NMW) rates and automatic pension enrolment obligations, there is also the construction industry scheme (CIS). Under CIS, all payments made by contractors to subcontractors must take account of the subcontractor’s tax payments status, as determined by HMRC. All these require monthly reporting and for the late payment of CIS tax and submission of CIS returns there can be significant penalties.

With operating margins under pressure - the top 100 UK construction contractors saw average operating margins fall from 2.4% to 1.9% in 2015 (Farmer 2016) - future changes in employer pension contribution rates and to a lesser degree the NMW are likely to impact such a labour-intensive sector.

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2.5.3 Social

The needs of the population in terms of infrastructure, housing, healthcare, education, work and leisure drives construction output.

Perception

The construction sector has a poor image. CITB data shows that the overall appeal of the construction industry as a career option for young people is low, scoring 4.2 out of 10 among 14 to 19-year olds. It is perceived to be about 'being outdoors and getting dirty' and most suited to 'young people who do not get into college or university' (Designing Buildings 2017).

The sector needs to increase its appeal to future workers. Specifically, the lack of diversity is a real concern for the future – i.e. only 16% of the current workforce is female and just 8% are under 25.

2.5.4 Technological

The use of automation and adoption of new technologies in construction play a key role in the development of the sector. For example:

Modern methods of construction (MMC)

Modern methods of construction (MMC) have been promoted as ways of working more effectively. They centre around the use of off-site construction techniques that can benefit from factory conditions and mass production techniques and economies.

MMC have been an important technological advancement in the construction industry. A report by NHBC found that over 45% of those taking part in the study believed MMC will play a greater role in house building over the next three years (NHBC Foundation 2016).

2.5.5 Environmental

An Energy Performance Certificate (EPC) is required for all properties. This provides details on the energy performance of the property and what improvements could be made. This has led to focus on improving the energy performance of new and existing buildings. Some of the main energy saving solutions currently utilised relate to:

Heating and hot water: These account for around 62% of yearly energy bills. The type of boiler and heating controls installed can have a significant impact. Replacing boilers or having better controls or switching to renewable technologies for generating electricity and heat could also be beneficial.

Smart meters: These are the next generation of gas and electricity meters and it is the government’s vision for every home in Britain to have one. They have a communication capability that allows data to be displayed on a device inside your home and read remotely by your energy supplier.

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Smart heating controls: Smart thermostats are a new type of heating control which connect to the internet, allowing them to be accessed and adjusted remotely. They give individuals greater control over their heating, from wherever they are, at any time of day.

To install these new technologies requires specialist skills but also an understanding of the new standards.

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3 Bibliography

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