Here’s another four we’ve failed – Training and apprenticeships

‘I could get a job in Asda but what I love is laying bricks,” says Michael Sullivan. The 20 year old from Tower Hamlets, east London has four years’ experience and an NVQ level one in bricklaying. He’s bright, enthusiastic and a model student at his local construction training centre, where he has an attendance record of 98%. In short, he is exactly the sort of person the industry needs. So why are we about to lose him?

Well, the training centre Sullivan is attending can only take him so far – to become a qualified bricklayer he needs an apprenticeship. He has been trying desperately to get one for two years, and his patience is running out: “I really want to do this, but if I don’t get a chance soon I am going to give up.”

If he does give up, his other options look grim. “Where I’m from, everyone is running round in gangs, carrying knives, getting up to no good and all that. I don’t want to end up as one of them because I tried to get an apprenticeship and couldn’t.”

Sullivan is one of 36,500 people who applied for construction apprenticeships last year but failed to gain a place. In 2007 more than 45,000 people applied to ConstructionSkills, the sector skills council, to do construction apprenticeships but only 8,500 won placements. Some dropped out of process of their own accord, but it’s clear that a huge number of people who were keen to get into construction have been unable to receive the training they needed to succeed.

The situation might make some sense if the construction industry weren’t suffering from a dire skills shortage. Geoff Lister, president of the Federation of Master Builders (FMB), says we need to take on 87,000 extra workers a year for the next five years “just to keep standing still”. Last week the Strategic Forum set the target of supplying an extra 13,500 apprentices by 2010 as part of its Strategy for Sustainable Construction, adding even greater pressure to train people.

What’s causing the pressure? The UK has about £250bn of projects in the pipeline and the EU migrants who have been propping up the industry up for the past four years appear to be leaving. Poland, for one, has launched a campaign to lure back its workers, and the UK government says half the eastern European migrants who came to the UK after 2004 have already gone home.

In that case, it seems all the more odd that the industry is ignoring – and letting down – sorely-needed people like Sullivan. Lister says that the old problem used to be attracting people to careers in the industry but “we’re doing a great job of that now”.

The new issue, he says, is how to train them.

And that’s an issue that calls into question companies’ willingness to take on apprentices, the levy system with which training is funded, and even the existence of training body ConstructionSkills itself.

Is there a will?

ConstructionSkills says employers are indeed unwilling to take on apprentices. It has set up a cross-industry apprenticeships taskforce, chaired by the FMB’s Lister, to look at ways of encouraging employers to take on more apprentices.

It says one problem is that employers don’t like having young people on site, particularly 16 year olds, who cost more than older people to insure and by law need to be supervised constantly. Sullivan’s response to this is: “People think that taking on apprentices will slow them down because we’re still learning and we cost money, but what are they going to do in 20 years’ time if they don’t train anyone now?”

Lister says another issue is that main contractors use the fact that they don’t directly employ tradespeople to get out of addressing the issue. One way around this, he says, would be to get clients involved: “If procurement required construction firms to train apprentices, that would be a big help.”

Max Hamps, apprenticeships director at ConstructionSkills, hopes programme-led apprenticeships (PLA) will help. These schemes make it easier for employers to train people than traditional apprenticeships do, by allowing trainees to get experience on site with employers while doing the rest of their training in a college. Hamps is aiming to get 1,000 people doing PLAs onto sites between July and September this year. In five years “I home to train 6,000 a year this way”, he says.

Is the money there?

The problem is, the employers say, we are willing to take on apprentices, but we don’t have enough money. While many employers on other sectors pay for training directly with their own funds, the training in construction relies to a large extent on the levy system. Under it, ConstructionSkills collects the levy from companies who then have to apply for grants to fund training.

Peter Kilby, chief executive of small contractor Cornhill Construction Group, has

first-hand experience of the skills shortage facing the industry. He argues that the solution is to increase the levy significantly. He says: “The levy is woefully deficient; it should be increased – perhaps even doubled.” More money equals more placements for apprentices, is his logical argument.

But for others, the way the levy works is at the heart of the problem. At the moment, almost all construction firms with a turnover above £76,000 have to pay the levy by law.

This adds up to more than 25,000 firms that are obliged to pay a fee of 0.5% of what they spend on people they employ directly and 1.5% of their payments to labour-only subcontractors. ConstructionSkills collected £165.4m in 2007.

The body redistributes the money to employers that apply for grants to pay for training. In 2007 it gave out £137.7m in training grants (see pie chart).

There appears to be wide dissatisfaction with the system. Building ran a poll on its website asking whether people feel they get value for money from the levy and a conclusive 74% of you said no.

Mat McAdams, president of the Federation of Plastering and Drywall Contractors, says the system’s main flaw is that although firms are forced by law to pay the levy, ConstructionSkills has no obligation to provide anything in return. He reckons that his members are “desperate to train” but they only get back 56p in grants and support for every £1 they pay.

Larger specialist contractors agree. Stephen Harvey, company secretary at John Doyle Group, says the firm gets grants amounting to only about 75% of what it pays in levy. He says: “We don’t have enough apprentices partly because of the red tape involved and because it is risky taking on young people, but finance is a bigger issue. Most people feel that they pay the levy but when they apply for a grant the money is not enough.”

He is also frustrated by the fact that the process of applying for grants in itself adds to the costs of training. “We employ someone especially to apply for grants. This person spends a large chunk of their time simply claiming back money we have handed over.”

Main contractors are in a similar situation. The chief executive of a £70m-turnover contractor says that his company pays £250,000 a year in levy and gets back £80,000 in grants, despite having about 180 apprentices.

ConstructionSkills insists that the system is working and that most of those who pay the levy support it. A spokesperson for the organisation stresses that it reviews support for the system annually through an independent employer survey and consultation with construction federations, which culminates in a debate in parliament. He says: “Last year, we received 100% support from the federations. Our survey showed 69% of employers support the continuation of the levy and grant system, and 62% believe levels of training would worsen in the absence of ConstructionSkills.”

The spokesperson adds that ConstructionSkills has tweaked the threshold above which firms have to pay – from £69,000 to £73,000 in 2007, and then to £76,000 in 2008. This latest threshold means 44% of registered employers are exempt.

ConstructionSkills has also been increasing, year-on-year, the total amount of money paid out in grants and employer support. The spokesperson says: “For every £1 of levy ConstructionSkills received in 2007, the industry received £2.03 in total benefits, up from £1.90 in 2006.” In addition to the levy, ConstructionSkills gets income from investments and grants from the government and EU. These totalled £7.3m in 2007.

What should be done?

People think that taking on apprentices will slow them down because we’re still learning, but what are they going to do in 20 years’ time if they don’t train anyone now?

Michael Sullivan

But with so many unhappy with the way the money is distributed, should the levy be scrapped altogether? The industry’s electrical contractors and plumbers extracted themselves from the system in the early nineties because, as Iain Macdonald, head of training and education at the Electrical Contractors’ Association (ECA), says: “We felt the contributions we were putting in were not equal to what we were getting out.”

But the ECA itself admits that leaving the levy system has not solved its training problems. It has launched a £10m training fund and plans to lobby government to provide its members with fiscal incentives to offer training. The problem, Macdonald says, is not necessarily the levy, but the range of solutions to the training problem. “We need quick fixes and long-term fixes as well.”

Main contractors, too, appear to be unwilling to call for the levy system to be scrapped. Julie Tyson, head of training at Wates, says: “It’s an imperfect system. But the levy does maintain a level of investment, and focus, on training that we might not have otherwise. Does everyone get value for money from the system? That’s a different question. You do have to work hard to get something back from it, which we do here at Wates.”

The message seems to be that we should not necessarily scrap the levy, but we do need to look again at how its income is distributed. Perhaps Mark Farrar, who takes over as chief executive of ConstructionSkills in August, can do this – hopefully before thousands like Sullivan turn their backs on construction. Sullivan, at least, has not yet given up: “I“m going to keep trying to get a place. I reckon I deserve a chance and if someone takes me on I“ll prove myself.”

The would-be apprentices

When Building spoke to trainee Michael Sullivan, it also met four other men who are looking for apprenticeships in construction. Each attends the Local Labour in Construction (LLiC) centre in east London. The centre, run by Tower Hamlets council, provides training courses in construction to young people in the borough. It can take them to NVQ level one, but to be fully qualified, candidates must attain at least level two, for which they need a work placement.

Jenny Newland runs the centre. She says: “Our courses are approved by ConstructionSkills and we have formed partnerships with local construction firms aimed at getting our students into placements, but we can’t find enough places for them. I have 17 who have passed their NVQ level one and are ready for a placement but I’ve only managed to place three.”

She says that although the students at LLiC come from difficult backgrounds,they would be assets for any company that took them on. “We make sure they are committed and motivated. We want to have good relationships with the companies we work with so we wouldn’t recommend people we weren’t sure about.”

 

 

 

 

 

Ashraful Hoque is 18, he’s got a multiskills NVQ level one, and is looking for a plumber’s or painter and decorator’s apprenticeship.

“I haven’t got a place but I’m trying to stay positive. I’m hoping to learn plumbing because I like bending pipes, working with heaters, all of it.

“If the construction industry doesn’t think I’m serious, they should take me on and let me prove it. I won’t let anyone down, I’ll meet my targets – maybe even better them. I know it’ll be hard at first but I’ll learn. We realise they would be doing us a favour if they took us on.”

 

 

 

 

John Uter is 18 and is looking for an electrician’s apprenticeship. He has completed a six-month multiskills NVQ level one.

“Companies seem to want people who are already qualified. They also seem to think young people won’t stay in the job. If companies keep an eye on their apprentices to check they’re happy, they won’t leave.

“Employers also seem to be worried that because you’re young you’re going to nick people’s tools. I’ve seen people on site hiding their tools from me, but they don’t realise half the time we’ve got better tools than them.”

 

 

 

 

Jonathan Browne is 17, has his multiskills NVQ level one, and is looking for a placement as plumber.

“Fitting bathrooms and kitchens is the sort of thing I like. I feel comfortable with that stuff. I told my careers officer at school that I wasn’t all that at using my brain so we talked about doing something with my hands instead. That’s how I ended up looking at plumbing. It’s good money but I’ll work for it, I’m a hard worker.”