Construction Skills Regional Contact:

www.constructionskills.net

Learning and Skills Council Contact:  sally.gardner@lsc.gov.uk

Click here for Construction Skills North East Fact Sheet

For more information on Heritage Construction Skills: plugging the gap, please click here »

ECITB 2006 Industry Report - Building Capacity and Capability through the Regions

2006 saw a significant upturn in work in the engineering construction industry with increases in the numbers of people employed and the take up of ECITB products and services, for more information and to download the report, please click here

Useful Links:  Asset Skills and Summit Skills

ConstructionSkills

Overview of the Sector in the North East

ConstructionSkills covers a wide range of sectors in the development and maintenance of the Built Environment.  It represents around 7% of the national economy in terms of GDP and is vital in providing the essential infrastructure to support other sectors.

ConstructionSkills includes; Housing (public and private); Infrastructure (roads, railways and utilities); Non-residential building in the private sector (factories, warehouses); Commercial building by the private sector (offices, shops, entertainment, health and education); Architects, Repair and maintenance work in all sectors. (Regional Fact Sheet 2005)

As well as work performed by construction contractors, the sector covers the renting of construction machinery, professional and design work in consultancies (engineering, architecture and surveying).  It does not cover those doing construction work in other sectors, for example, public administration, real estate or building engineering services (plumbing and electrical contracting). (Regional Fact Sheet 2005)

Nearly 97% of construction companies employ less than 50 people and these account for 60% of total employment within the industry. (Regional Fact Sheet 2005)

In the NE there is a larger proportion of employees working for firms employing 200 or more people than in the sector nationally whilst the proportion working for the smallest firms (25%) is significantly less than in England as a whole (37%).

35% of all companies on the DTI register have only one employee (Construction Regional Skills Foresight 2003).  The workforce is predominantly male in the region (89%), which is in line with the national rate of (88%). (Regional Fact Sheet 2005)

A higher proportion (16%) of the workforce in the region is aged between 16-24 years than in the sector nationally (12%) but in the NE, 42% of the workforce is aged 45 years and above, slightly higher than the national rate of 40%. (Regional Fact Sheet 2005)

The levels of qualifications held by workers in the North East is similar to national levels - 54% of the employees in the sector are qualified to NVQ level 3+ or equivalent compared to 50% nationally. (Regional Fact Sheet 2005)

Key issues facing the sector now and in the future

Evidence shows the workforce to be ageing (this is especially significant as many workers wish to retire early due to the nature of the work). (LSC 04/05 SoP)

Client demand for skills cards will steadily increase within the industrial and commercial sector at craft, technical and professional levels. (LSC 04/05 SoP)

The increasing propensity to introduce and adopt new technologies to the sector requires new skills in design, assembly and project management. (DRAFT SSA)

The Government policy around quality of work (working time directive, parental rights, minimum wage, Health and Safety) and reducing damage to the environment (planning legislation, aggregate tax) raises operating costs and changes the way the industry works. (DRAFT SSA)

Multiskilling across building services trades is an increasing requirement for employers within the industrial, commercial and domestic markets. (LSC 04/05 SoP)

Current and forecast recruitment demand (either for growth or replacement)

Around 87,200 people are employed in the construction industry with growth forecasted at 1% between 2002 and 2014. (Regional Sector Overview 2005)

Based upon the latest published sector research and forecasts for construction, the NE will need to recruit and train in excess of 14,000 new workers over the next 5 years. (DRAFT SSA)

Employment Issues in the North East

Recruitment difficulties and causes

The lack of suitably qualified and trained workers continues to impact upon the sector. The Employer Survey (2004) showed that 91% of respondents in the NE reported difficulties in recruiting skilled labour.  Further more, the quality of new recruits needed to be addressed and that the education and training needed review. (DRAFT SSA)

The NE has always had economic migrants who are trained in the region but work in other parts of the country.  The award of the 2012 Olympic Games to London will exacerbate this situation.  Research has shown that the NE has a leakage factor of 21%. (DRAFT SSA)

Currently there are very few inward migrants in the NE workforce but this may change – 30% of London’s construction workers originate from outside the UK (mainly Eastern Europe). (DRAFT SSA) ConstructionSkills has considered various scenarios with regard to inward and outward migration and concluded that training will be needed either to recruit and train even more workers or to provide specific training needs such as languages, Health and Safety, etc. (DRAFT SSA)

Attracting people into the sector

Groups to be targeted are:

• Female new entrants
• Ethnic minority new entrants
• Non traditional new entrants such as those leaving HM forces, migrant workers for EU countries, Australia, Canada and South Africa

Skill requirements of new recruits

Employers increasingly demand multiskilled individuals which impacts upon the skills agenda of the construction workforce in the region through the need for individuals to develop new skills/knowledge of, e.g. regeneration, new materials, new processes and technologies, etc.

Workforce Development in the North East

Skills shortages/gaps in existing workforce and latent skills issues

There are clearly identifiable skills shortages facing the construction sector, requiring measures to be put in place to tackle them:

• 937 firms (14%) reported skills shortages (SSC Regional Factsheet data)
• 24% of firms reporting internal skills gaps  (SSC Regional Factsheet data)

The high proportion of self-employed/sole trader and micro businesses meaning there is a strong requirement for business and ICT skills.

The entire sector is faced with upskilling needs as a result of continual technological and materials change.

The high proportion of general constructive operatives means that construction in the NE has a bigger role in encouraging workers to develop ‘Skills for Life’ and subsequently increase the proportion of the workforce qualified to a Level 2.

Future skills demand

As with GB, the occupation requiring the greatest annual average change in employment in the NE is Steel Erecting, maintenance workers and plumbers.  However, increases are forecasted across the full range of construction occupations (other than plastering).  (DRAFT SSA)

Prioritisation of skills issues within the industries

Following consultation with all stakeholder organisations and detailed research in 2004, the issues to be addressed (as a starting point) in the SSA  include:

• Apprenticeships
• Companies investing and engaging in training
• Diversity and local employment
• Graduate recruitment and applications to construction related degree courses
• Immigration and migration of the workforce
• Improving sector skills intelligence
• Qualifying the existing workforce – licence to operate on site
• Specialist employment
• Supply chain integration, management and rationalisation

Learning and Skills Infrastructure in the North East

Lack of suitable courses in the area was stated to be a barrier for only 12% of construction companies compared to 21% nationally. (Regional Fact Sheet 2005 from NESS 2003)

Similarly, lack of suitable courses generally was considered a barrier for only 9% of companies in the NE compared to 19% in England as a whole. (Regional Fact Sheet 2005 from NESS 2003)

However, the pace of change and the increasing introduction of new technologies to the sector will put pressure on employers to find specific and new training to meet current and future needs.

Relevance and quality of existing provision

Employers are often not keen to support learning other than that which is  industry relevant.  Manual skills are more prized than academic ones and evidence suggests that learners can be uncomfortable with the classroom-based elements of NVQ courses.

Barriers to employers accessing the skills provision they need

70% of firms had provided training in the last 12 months. (Regional Fact Sheet 2005 from NESS 2003).

Over half of the firms in the NE have provided funding for staff training within the previous 12 months. (Regional Fact Sheet 2005 from NESS 2003)

In the NE, a third of firms in the sector reported no barriers to training.  This figure is slightly higher than in England as a whole.  All of the barriers are less significant for companies in the NE than nationally, for instance, twice the proportion nationally cited a lack of cover as a barrier compared with the region.  In the North East, a lack of funding and time were the main barriers to training for companies. (Regional Fact Sheet 2005 from NESS 2003)

Best Practice

Construction is one of the four pathfinder Sector Skills Councils that were tasked to produce a Sector Skills Agreement (SSA) to address current issues impacting upon the industry. A draft SSA has been produced which determines the key skills challenges facing the sector in the NE, identify relevant partner organisations and all necessary resource needed to produce a relevant project based matrix that will deliver industry needs.

There is a newly established Regional Higher Education Group for the Built Environment.

Between January 2005-2010:

• An Olympic sized pool is planned for Sunderland alongside the Stadium for Light
• Building Schools for the future - £600m (T&W)
• Tyne and Wear Housing Market Renewal - £1.7b (T&W)
• Single Programme Capital Investment Plan £60m (T&W)

Initiatives

Tyne & Wear Together is a partnership between the five LAs which exists to improve the job prospects of residents – focusing on skilling, building and employing.

Building Tyne & Wear (established 2001 funded through T&W Single Programme)

Local Authorities plus Sunderland, Newcastle and Gateshead College are developing a co-ordinated approach to employment and training within construction in order to increase capacity and quality provision.

Employing Tyne & Wear 

Provides pre-employment support to the workless population. Your Homes Newcastle Initiative chaired by Bill Midgely has £600m to spend on improving city homes by 2010 has stated that there will not be enough qualified youngsters to do the work.

CoVES

A Regional Construction COVE Network exists where representatives from the CoVEs work together to address provision needs of the sector.

Centres of Vocational Excellence provide an excellent place to build up support for specialist construction skills, especially, new provision where there is an economic case for developing skills.  This would logically sit with the region's CoVEs/colleges - and accreditation can be achieved in this way. There are three Construction CoVEs in the North East.  The existing CoVE at Northumberland College is in Construction Crafts, and the additional CoVEs are Newcastle College/New College Durham (Professional Services) and Sunderland College/Hartlepool College (Building Services).