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4 March 2019updated 09 Sep 2021 3:39pm

Quality costs: why cuts are not an option for construction

Top-level apprenticeships can’t be delivered on the cheap. 

By James Wates

The construction industry plays a dynamic, yet too often understated, role in the growth of the United Kingdom’s economy. 

The built environment is exactly that; it is literally the world shaped around us. The quality of housing, for example, is crucial to people’s physical and mental health. Physical infrastructure and public services – such as roads, railways, hospitals and schools – are essential to our quality of life. And making them a reality requires a thriving construction sector. 

A thriving construction sector, in turn, relies on a steady flow of recruitment, and apprenticeships are central to that. Since the introduction of the government’s apprenticeship levy – a tax on companies with an annual pay bill of more than £3m used to fund new apprenticeship programmes – a total of just £370m (as of 30 September 2018) has been paid out of the central fund to pay for apprenticeships. Despite the levy remaining in credit, there are murmurs within the industry that funding for construction-based degree apprenticeships could be cut, making high-quality vocational training harder to deliver. The apprenticeship levy is set at 0.5 per cent of the value of an employer’s pay bill, while construction employers are also required to pay the pre-existing Construction Industry Training Board (CITB) levy – which is 0.35 per cent on PAYE and 1.25 per cent on sub-contractors. 

The construction industry already faces long-standing challenges with recruitment, independent of any cuts. A survey carried out by the Civil Engineering Contractors Association (CECA) found that over a third (34 per cent) of UK-based contractors experienced difficulties in identifying and recruiting building trade supervisors. One in five firms said that there were severe shortages in these positions. A further 42 per cent of respondents claimed they were having problems in hiring project managers. 

The trope of hard hats and muddy boots and the idea that it is a last-resort career have continually clouded the judgment of many would-be workers in the construction industry, especially young people, and this has seriously hampered our recruitment efforts. While manual labour is an aspect of construction that will endure, more needs to be made of roles that are at the cutting edge of science, technology and management fields. 

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The Chartered Institute of Building (CIOB) is alarmed by a dip in degree-level apprenticeships in the construction sector, as well as the likely damaging impact that a cut in funding would have on the wider economy. Construction-based apprenticeships, especially those relating to site management, which are validated by the CIOB, are funded by the apprenticeship levy, paid for by businesses themselves. It is important that firms realise a tangible return on their contributions, in terms of the quality of apprentices taken on, and the length and funding of these apprenticeship programmes.

As UK universities appear unwilling to lower their tuition fees – typically £9,000 per year, which also applies to degree-level apprenticeships – there is an implied expectation for employers to counter any shortfall. But this expectation is unrealistic for the construction sector tithed to both the apprenticeship and CITB levies. The additional expense would certainly pose questions as to whether the sector was actually getting value for money in terms of its investment into both levies. High-quality apprenticeships cannot be sustained on less money, and any cut in funding would contravene the recommendations of the Richard Review of 2012, which called for “meaningful and relevant” training.

The construction industry is arguably emblematic of the conversation which surrounds apprenticeships in general. While there is a growing acceptance that the bias of the UK’s education system towards traditional school-university pathways has caused imbalance in the employment market, enthusiasm for apprenticeships as an alternative route is also on the rise. But neither clarity nor consensus on what apprenticeships are or how they should be delivered has been achieved. Successive governments have tried to find better balance between technical, vocational and educational training, but there is still work yet to do.

Apprenticeships which are employer-informed are paramount to improving the UK training backdrop. The Institute for Apprenticeships (IFA) is an executive offshoot of the Department for Education, set up by the Apprenticeships, Skills and Learning Act 2009 and amended by the Enterprise Act 2016. Naturally, apprenticeships which are updated according to ongoing industry trends and developments are worth investing in. But this is a tall order for the IFA to manage on its own.

The CIOB, armed with close to two centuries of insight and expertise, wants to consult with the IFA on new and responsive standards for apprenticeships specifically within the construction industry. What skills do construction employers need and want? What timescales should these apprenticeships operate on? These are the questions the CIOB is able to answer with unparalleled precision to help the IFA establish degree-level standards that will translate to value for the industry.

The rollout of apprenticeships is vital to the rebalancing of the UK’s education system and economy, but the success of the vision for vocational education depends on its capacity to be elevated above being the “other” option. Apprenticeships must be viewed as equal to a university education and to achieve that status depends in part on making the on-the-job experience rewarding. Apprenticeships are an investment of time as well as money for employer and apprentice alike, so ensuring that the programme is of the highest standard and with the most benefits to both parties is in the interests of everyone. 

The UK’s workforce should not be viewed solely within the context of the 18-21 age bracket. As well as the chance to “earn as you learn”, free of soaring university tuition fees, the flexibility of apprenticeship programmes opens them up to a wider range of people. As well as skilling and upskilling the nascent employment market apprenticeships can also be used to re-skill members of the existing workforce.

Construction is an exciting, interesting, high-tech and progressive sector. Apprenticeships are not a silver bullet for all of the challenges facing the construction industry, but modernising and diversifying the paths into the profession is certainly a giant step in the right direction. The CIOB hopes to work closely with the IFA to establish the highest possible standards for apprenticeships, and delivering on those standards cannot be done on the cheap. 

James Wates is a past president of the Chartered Institute of Building.

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