3. The Future of Construction

The construction industry, like many other industries, is at a moment of change. The need to transition to a net zero carbon economy and undertake large-scale retrofitting on existing building stock raises significant new challenges around skills and workforce planning. Added to this, construction is facing immediate skills shortages due to the impact of Brexit alongside an ageing workforce with around a third of the workforce over 50 and an estimated 50,000 workers likely to retire in the next ten years[135]. Repeated inquiries have also pointed to perceptions of construction as a poor place to work with young people, particularly young women, unlikely to choose to work in the industry.

These challenges will need to be addressed and workforce growth will be required in key areas in order to meet Scotland’s low carbon targets. While the workforce challenges are significant this is also a key moment for investment and modernisation of the industry. The transition to net zero carbon technologies, if pursued in a just and fair way, offers an opportunity to transform ways of working and provide high quality work to a greater range of people across Scotland and beyond.

3.1 The Transition to a Zero Carbon Economy

Scotland has committed to become a net zero carbon economy by 2045 and set a statutory target to reduce carbon emissions by 75% by 2030.[136] Reaching this target will require a transformation in how the economy and society functions with a range of industries facing significant challenges. In this context the construction industry has a large role to play and emissions from the built environment and construction account for around 40% of total national emissions.[137]

The Scottish Government has set a target that by 2030 at least 30% of Scotland’s building stock will be heated using zero emissions systems. The Climate Emergency Skills Action Plan (CESAP) notes that to achieve this buildings decarbonisation target, the industry needs to adapt building design, construction methods and materials for new and existing buildings, improve thermal efficiency and move to zero emissions heating systems. Decarbonising heating involves improvements to thermal efficiency, for example improved insulation and the use of low carbon heating sources such as heat pumps and heat networks.[138]

Across the UK the investment required for retrofit is significant. The total cost of net-zero retrofit of the built environment across the UK is expected to be in the region of £1 trillion, or around £35 billion a year.[139] The Scottish Government estimates that a total of £33 billion will be required to retrofit all domestic and non-domestic buildings in Scotland and has committed £1.8 billion for upgrading heat systems in Scotland across the lifetime of this Parliament.[140] The Heat and Buildings Strategy commits that by 2030 over one million homes and the equivalent of 50,000 non-domestic buildings in Scotland will be converted to zero emissions heat.

The CESAP outlines the skills implications that reaching the buildings decarbonisation target will have in construction, noting the need for focused upskilling and the development of specialist knowledge and skills around retrofit, zero emissions heating systems and heat networks for professional, technical and craft roles, as well as data and smart systems skills for delivering energy management in buildings services. This will require upskilling of existing roles and adaptation of training will be needed across new build and retrofit to embed best practice and ensure performance gaps are addressed. It notes that the college network is currently developing additional provision to meet anticipated demand for upskilling.[141]

The Green Skills Taskforce at UK level notes that specific low carbon training is required across all roles, with a focus on systems design and implementation, inter-trade issues, and competence and quality. This includes every part of the construction supply chain - from planners, architects, engineers, construction workers, supervisors and auditors, to occupiers.[142]

The CIIG identified a significant challenge for the industry when considering upskilling and the need to build green skills noting that supply and demand for new skills currently do not align. The example of plumbing was explored, which will play a key role in the installation of heat pumps. There was a sense that few customers are currently interested in new technologies or approaches with the effect that businesses are not incentivised to invest in skills and upskilling.

This is reflected in current figures where in recent years around 3,000 renewable heating systems have been installed in Scotland’s homes annually. As set out in the 2021 Programme for Government, to maintain progress towards the statutory emission reduction targets, zero emissions heat installations must scale up to provide a total of at least 124,000 systems installed between 2021 and 2026. The installation rate will need to peak at over 200,000 new systems per annum in the late-2020s.[143]

A CITB report considering the skills needs to transition to net zero in construction made a similar observation to that of the CIIG:

‘Skills development in the construction sector is demand-led but there is currently little demand for decarbonisation, so little incentive to develop the skills required. If demand is created without planning for skills development, there will be a lag in the supply of skilled workers which will cause a delay to net-zero implementation that we cannot afford.’[144]

The CITB, supporting the CESAP work, also conducted specific assessments on the skills needs for Scotland. This report notes that by 2028 Scotland will need an additional 22,500 people working in construction in order to carry out retrofit activities. This will include:

Significant upskilling is also required to support the adoption of low carbon technologies. Widespread heat pump deployment will require the upskilling of the current workforce with an estimated 40 hours of training. The biggest barriers to decarbonisation upskilling were seen as lack of training opportunities, lack of funding for training, regulation changes and a lack of clear training standards or accreditation. Cost was generally seen as most important barrier for smaller businesses. External funding to cover some or all of the cost of training and a recognised accredited qualification were seen as the key ways that Government could support and facilitate upskilling within the industry.[146]

Careful workforce planning will be essential to support the move to net zero and there is a clear need for strong leadership from the public sector to set the direction of travel.

The creation of demand is essential to create a successful skills pipeline but there is equally a danger of peaks and troughs in terms of the skills needs or the need for certain trades, which could ultimately increase uncertainty and precarity for the workforce in the industry. Care must therefore be taken to trace out the skills needs required, to identify appropriate mechanisms that allow for the spikes in demand for certain activities (for example insulating buildings or fitting heat pumps), and to ensure that workers are sufficiently trained and skilled that they can maintain their employment throughout the decarbonising agenda and have a future in the industry.

The Case Study below outlines the work of the Construction Scotland Innovation Centre which has been working to support the develop of green skills within the industry.

Case Study - Construction Scotland Innovation Centre (CSIC)

In 2012, the Scottish Funding Council launched an Innovation Centre programme to support collaboration between universities and businesses. One of the seven centres is the Construction Scotland Innovation Centre (CSIC), which is hosted by Edinburgh Napier University and based at the Innovation Factory at Hamilton International Technology Park in Lanarkshire, central Scotland.

In September 2021, the CSIC announced the launch of its new £450,000 Low Carbon Learning programme. This training course is supported by funding from the Scottish Government and Scottish Funding Council through the National Transition Training Fund, which was introduced in 2020 as a response to the economic impact of Covid-19. The Low Carbon Learning programme follows the successful ‘Passivhaus in Practice initiative’ run by CSIC, which included a mix of online, augmented reality (AR) and hands-on training modules. The new Low Carbon Learning programme will equip construction workers with the skills to retrofit buildings for a low carbon future; an important contribution to the national mission to ‘create new jobs, good jobs and green jobs’. It is expected that initially 200 workers will undertake face-to-face training at CSIC’s Innovation Factory, while 500 more will train online. The training programme will support construction workers who are out of work or are facing the prospect of redundancy, offering a route back into the sector with new skills and knowledge aligned with the future demands of the sector.

Source: Scotland Construction Now (2021), CSIC to deliver Passivhaus in Practice programme for Scottish construction workers

The CSIC Low Carbon Learning programme is an example of positive practice and the focus on construction skills and pathways within the CESAP is welcome. However, the speed and scale of the change required to meet Scotland’s emissions targets is unprecedented and a step change is needed in the scale of interventions if decarbonising targets are to be met.

Off-Site and Modern Methods of Construction

Construction has a range of ways to modernise, by building in new working practices, new building materials, higher levels of automation and higher levels of offsite manufacturing. Off-site and modern methods of construction (MMC) are commonly used for smaller buildings, such as housing, as significant elements of each building are still small enough to transport. In off-site construction, components such as floor, wall and roof sections are manufactured in the controlled conditions of a factory, then transferred to site for assembly. The process has now developed to the point where entire sections, including internal and external cladding, services and utilities can be manufactured off-site, reducing the time spent on-site and the skills required significantly.[147]

Manufacturing and off-site approaches are likely to play a large role in the industry going forwards, as modular builds reduce costs, support energy efficiency and offer a speedy route to new build housing projects, particularly in the context of large-scale retrofitting programmes that have significant workforce requirements.

Off-site construction has the potential to offer high quality employment opportunities to communities and to support more settled and less transitory working environments for construction workers. Yet, the CIIG group noted that factory work is potentially more repetitive and a less skilled role for individuals and there is a need to ensure that the employment offered is both skilled and fulfilling.

The CIIG felt that automation and multi-skilling, if used appropriately, could support an increase in both efficiency and safety in this context. Within a manufacturing setting for example, single-skilled workers rely on a constant stream of the same work whereas multi-skilled workers could work across areas. They noted that having an awareness of work within the factory as a whole can provide opportunities for progression and support better career outcomes for the workforce.

Within construction it is important to note that multi-skilling has too often been used as a deskilling agenda or a way to undermine collective agreements. Modernisation and the creation of new ways of working must be an upskilling agenda and must continue to support high standards and high quality work within the industry. It may also be necessary to consider how well existing collective agreements support workers engaged in Modern Methods of Construction. It is important that this approach maintains high standards and provides positive outcomes for the workforce and parties involved in collective agreements should consider how they can be renewed and updated to support workers in these areas.

3.2 Apprenticeships and Skills

3.2.1 Construction Apprenticeships

A third of construction workers are aged over 50 and an estimated 50,000 construction workers will retire by 2029. The industry already faces labour shortages and the decarbonising agenda will require additional workers. Skills Development Scotland (SDS) estimates that these pressure combine to require an additional 79,100 construction workers by 2029.[148] For many of these roles the main entry route is through apprenticeships. Construction is the single biggest discipline in apprenticeships in Scotland with over 11,600 construction Modern Apprenticeships in 2020/21. One third of all apprentices in Scotland work in construction.[149]

CITB has estimated that the annual recruitment requirement within construction in Scotland is 2.3% per year which means an extra 26,250 new workers are needed between the end of 2020 and 2025 alone. CITB notes that this translates into a need to recruit 5,250 workers per year and that the following occupations have some of the strongest recruitment requirement levels:

There is also pressure on civil engineers, architects, labourers and logistics staff where demand is high compared to their workforce level.[150]

Evidence to this Inquiry also pointed to a variety of pressures on current apprentices, with an overall fall in apprenticeship numbers in 2020. A survey undertaken by the Fair Work Apprenticeship Coordinator also identified that approximately 1200 fourth year apprentices were awaiting their final skills test. This was partly a result of COVID-19, with many having problems completing the required portfolio of evidence and issues with access to the skills tests, but also reflects changes in the structure of apprentices with this the first cohort of apprentices post the 2017 reform of the construction building apprenticeships framework. An Apprenticeship Task Force group including CITB, Trade Federations, SDS, Scottish Government and Colleges Scotland was set up to develop and implement plans to ensure the backlog was tackled and that no apprentice would be penalised by the delay.[151] Importantly this group guaranteed the apprentice’s skills test if they were made redundant.

This action is important as it seeks to maintain apprenticeship numbers within the system. This is essential given the pressures the industry faces in terms of recruitment. However, taken in the round there is evidence of significant and growing pressures around skills and recruitment in the industry.

Changes to the Scottish Apprenticeship System

There is much to value in the construction apprenticeship approach in Scotland, which has continued to emphasise quality and apprenticeships in construction are often four year qualifications and train the apprentice to a high level, preparing them for a career in construction. All apprentices in Scotland (excluding foundation apprentices) are employed. SDS provided evidence to this Inquiry that construction apprentices score the quality of their experience very highly, at 8.8 to 9 out of 10 depending on the trade, and 93% to 98% would recommend their apprenticeship to others.

Deregistration and Deskilling

Through the course of the Inquiry there were a number of significant areas of concern raised relating to apprenticeships. The two main issues identified were deregistration and deskilling. In many ways these are related issues and point to a change in 2017 in how building construction apprenticeships were designed, agreed and monitored within Scotland. This change partly relates to external pressures resulting from the interaction with the apprenticeship system in the rest of the UK.

It should be noted that in other parts of the UK apprenticeships are often narrower and shorter with limited support for the apprentice who is not always employed. The role of federations and trade associations is also weaker. The issues also relate to employer views and the changing nature of work in the industry, with employers in housebuilding in particular expressing a desire to change how apprentices are designed to more closely match job roles.

The approach of construction apprenticeships in Scotland had previously emphasised the preparation of an apprentice for a career in construction rather than an individual job role with a single employer and apprenticeship frameworks could therefore require skills that were not routinely used in the apprentices day to day work. In this way it had been common for apprentices to be skilled beyond the needs of their employer and to undertake modules and simulations of work at colleges in order to complete their apprenticeship and ensure that they had the skills needed for their trade.

A move to more workplace-based assessment in the construction building apprentice framework sought to align apprenticeships more closely to specific job roles and reduce the need for simulations or training that was conducted off the job.

Apprenticeship frameworks at SVQ Level 2 (SCQF Level 5) are now offered for a range of roles in construction. The creation of lower level qualifications is related to issues around modern methods of construction where simpler installation techniques can reduce the skills needs of specific jobs – for examples for roofers or for timber frame erection – with a large number of businesses specialising in high volume, lower skilled work.

‘The national minimum wage and the SNIPEF wage as my boss is with SNIPEF but does not go by there wage recommendations which he is entitled to do but as I have bill too pay I think my union and SNIPEF should work together to look into getting an apprentices recommended wage and the minimum wage more fair. For example my unit of pay hourly is 4.9 but SNIPEF say for a second year apprentice it should be 5.3. This is a lot of money I have lost and losing that I find unfair’

Apprentice

Source: SCER & FAI (2020), Facing the future constructively? The experience of work in the construction industry in Scotland

It should be noted that SVQ Level 3 (SCQF Level 6) frameworks are also offered, and SDS highlights that these provide clear progression routes for workers to improve their skills and to support career development. The expectation therefore is that workers will undertake multiple shorter apprenticeships across their career, in line with the needs of their current employer. In training terms this progression pathway is clear, however, apprenticeship wage structures may act as a barrier for workers engaging in this approach in practical terms.

A key part of the change in the industry in 2017 was the removal of the requirement to register construction apprentices with their relevant trade body. Up to this point trade federations had been responsible for monitoring and regulating the working conditions, wages, recruitment and training of apprentices working in the Scottish construction industry. Employers taking on an apprentice signed an apprenticeship agreement that required the application of collectively agreed terms and conditions. These contracts also contained a clearly defined dispute resolution system that could be used by both the apprentice and employer. The registration process also ensured that all craft apprentices were employed on the same terms and conditions throughout Scotland.

Since 2017 apprentice’s terms and conditions are left to individual employers, CITB now advises employers that registration with SBATC or SPADAC (covering bricklayers, carpenters, plasterers, painters and decorators) is optional, and that the required rate for the job is the National Minimum Wage which is £4.30 for all apprentices in their 1st year, rising to that National Minimum Wage for their age group if they are over 19 years of age and compliance with this is tracked by both SDS and CITB.

It should be noted that SDS’s modern apprenticeship framework template for apprenticeships which forms the guidance for Sector Skills Councils, including CITB, is silent on the issue of sectoral agreed rates for apprentices. However, SDS do write to each apprentice setting out that their rate of pay may be covered by collective agreement and provides them with contact details for trade union officials in construction. While this is a welcome intervention, it would be more valuable to create a clear expectation to CITB and to construction employers that the collectively agreed rates for the construction industry should be applied through mandatory requirements within the relevant craft apprenticeship frameworks and re-establishing registration conditionality on apprenticeship grant funding arrangements.

Case Study - Fair Work Apprentice Coordinator

Since September 2018, Unite the Union has employed a Fair Work Apprentice Coordinator (FWAC), funded by and reporting directly to the Scottish Government. The role of the FWAC is principally to visit apprentices and adult trainees in colleges and workplaces to promote fair work and to support individuals to understand how fair work is relevant to their apprenticeship. The FWAC also supports apprentices with issues at work that can include disciplinary actions, redundancy risks or where they have a grievance with their employer. Originally the visits to apprentices were in-person, but these moved online meetings in line with public health restrictions during the pandemic.

The FWAC found that apprentice’s terms and conditions are now generally set by employers, with the majority only paying the National Minimum Wage. The existence of the FWAC goes some way to mitigate the damage caused by the removal of registration structures. However, the FWAC notes that issues often arise when apprentices instruct him not to contact their employer for fear that this may cause them more problems at work. Moreover, some employers refuse to communicate with the FWAC, which normally results in an escalation of issues and a reliance on legal enforcement action through Unite.

Related to the issue of registration, the need to uphold the quality of the qualifications and prevent a deskilling agenda was also identified by the Inquiry Group. Previously, trade associations or employer federations and the CITB were joint awarding partners with Scottish Qualification Authority (SQA), which meant any changes to qualifications had to be agreed by the joint partners, including the registration bodies the Scottish Building Federation (SBATC) and the Scottish Decorators Federation (SPADAC). The demise of the partnership means that apprenticeships standards are determined without formal agreement with federations.

‘There are far too many apprentices and mates who through no fault of their own [do not] get the proper on the job training due to lack of time to train them on site. A serious lack of quality tradesmen and boys qualifying as tradesmen have nowhere near the knowledge or skills to lead the future of the trade, I dread to think what the future holds unless we invest in our people and provide the necessary skills’

Worker

Source: SCER & FAI (2020), Facing the future constructively? The experience of work in the construction industry

The partnership has been replaced with a Technical Expert Group (TEGs) process, which will gradually replace existing apprenticeship frameworks with a new system of apprenticeship programmes and qualifications linked to occupational standards set at a national level.[152] TEG is a short-life working group which develops apprenticeships through the expertise of the people involved. SDS describes a TEG as being made up of 10-to-15 people from: employers; industry and professional bodies; qualification and education experts; and social partners, such as trade unions. The group involves people who have experience at operational manager level and volunteers must commit to a minimum of four half-day meetings over a six-month period.[153] The TEG process also includes a period of formal consultation with apprentices, employers and others.

Inquiry members were concerned about the rise in apprenticeship frameworks in construction at SVQ Level 2 (SCQF Level 5). There was a strong belief in the group that apprenticeships should provide young people with a skills base to support them in their careers and this is typically achieved through the provision of apprenticeship frameworks at SVQ Level 3 (SCQF Level 6) or above. The growth of apprenticeships at lower levels were seen as narrower less robust qualifications and were therefore seen as a part of the wider deskilling agenda within the construction industry, and often had the impact of putting roles beyond the collective agreement.

The Inquiry Group was also clear that reducing the quality of the qualifications or narrowing the skills packages offered would not help to attract young people into the industry or deal with skills shortages. The Inquiry notes the debate around changes to the design of apprentices but notes that the TEG process seems to offer a useful approach to partnership working as long as formal group membership incorporates a role for all industry stakeholders. It is important that this approach consistently supports employers, employer federations, professional bodies and trade unions within its structures, and where this is done successfully it should support apprenticeships that are positive for the apprentice and support long-term industry need rather than sort-term needs of a single employer.

Ultimately maintaining standards and promoting fair work outcomes is more likely to produce the results that the industry needs. There is already evidence that falling wages, limited training support and poorer career pathways is impacting young people’s career choices. The example of bricklayers was provided to the Inquiry which, as the Cole Report notes, is an increasingly outsourced profession. There is now a significant shortage of bricklayers in the industry and an issue around their skills levels, impacting build quality and safety on sites. Greater use of direct employment across all employers in the industry and maintaining high standards within apprenticeships has a key role to play in supporting skills, delivering fair work and transitioning the industry to net zero.

Supporting Employers to Support Apprentices

Electricians and Plumbers are covered by national agreements through the SJIB and Scottish and Northern Ireland Joint Industry Board for the Plumbing Industry (SNIJIB). These organisations continue to play a leading role in offering training and supporting apprentices within the industry. These areas have not been impacted by deregistration issues and both organisations also directly provide apprenticeships.

The case study below considers SJIB’s Apprentice programme which enjoys widespread support amongst employers for a number of reasons. Firstly, most electricians are members of SELECT and were, themselves, trained by SJIB. They, therefore, recognise the high-quality training for apprentices. Additionally, employers are supported throughout the programme for example, if a company specialises in a particular field and cannot provide all aspects needed for the apprentice’s training, SJIB’s Training Officers can often support informal ‘swaps’ or will ensure additional training is carried out in the college setting. This makes it easier for the employer to participate in the programme while also supporting high quality learning for the apprentice.

Case Study - SELECT

SELECT - the trade association for the electrical contracting industry in Scotland – founded the Scottish Joint Industry Board (SJIB) along with Unite the Union in 1969. The SJIB develops and delivers apprentice and adult training schemes for electrical installation. Management of its training schemes is delegated to the Scottish Electrical Charitable Training Trust (SECTT) – a Trust established by SELECT and Unite the Union. SECTT is one of two organisations contracted to deliver modern apprentice Electrical Installation programmes with funding from Skills Development Scotland (SDS).

SJIB and SECTT are well regarded for delivering high-quality apprenticeship training. SECTT recruited 738 new apprentices in 2021. Apprentices attend one of 20 approved colleges to work towards gaining an SCQF Level 7 in Electrical Installation and passing their Final Integrated Competence Assessment (FICA). Colleges are provided with guidance from SJIB on what should be taught at each stage. It is important that apprentices, wherever they are in Scotland, are trained to, and work at, the same standards. The FICA has almost become an informal industry standard.

Each apprentice is assigned a local training office. Training officers can support the apprentice on a range of issues throughout their training, and also liaises with employers. Throughout the pandemic, this structure allowed for personalised and proactive assistance. For instance, all apprentices were provided with access to a laptop to ensure their learning could continue from home. Beyond this, SJIB can step in with any employment issues and broader support is also made available through the Electrical Industries Charity. The extent of the support for apprentices not only has an immediate benefit for them, but also helps to build the apprentices’ sense of belonging to their companies and to the sector, raising productivity and retention rates.

The SJIB Wage Rates for Apprentices are negotiated and agreed by the SJIB National Board. They vary by whether the apprentice is ‘at work’ or ‘at college’ and by their stage (Stage 1, 2, 3 and 3 FICA), rising from £4.83 for a Stage 1 apprentice at college to £11.05 for a Stage 3 FICA-eligible apprentice at work. The SJIB contractual rates apply to all Apprentices, regardless of age during the first 12 months of the apprenticeship. After the first 12 months, when the National Minimum Wage/National Living Wage is higher than the negotiated rates, the National Minimum Wage/National Living Wage will take precedence, depending on the age of the Apprentice. In addition to wage rates, sick pay and welfare benefits are also agreed.

While SELECT is a membership-based trade association, training is open to all, including non-members. However, all apprentices are employed under SJIB rules.

Source: SJIB (2022), SJIB National Rates & Allowances 2022-23

Recognising issues identified in previous inquiries, steps have also been taken within the industry to create a shared apprentice programme. The purpose of this is to support small construction businesses to participate in apprenticeships even where they may not be able to sustain a 4 year apprenticeship or offer the variety of work necessary for the apprentice to develop the range of required skills.

Case Study - Scottish Apprenticeship Ltd

Apprentices are registered through Dundee and Angus College and are employed by Scottish Apprenticeship Ltd for the duration of the 4 year apprenticeship in the following trades: joinery, brickwork, painting/decoration, roofing/slating and electrical. Scottish Apprenticeship Ltd then places the apprentice with construction host employers.

Shared Apprentice Ltd. is a not-for-profit company and the main employer covering all wages when apprentices are in the college, annual leave, sickness and maternity/paternity pay. Host employers are invoiced for the time the apprentice worked with them plus 20%. The apprentices’ wages align with Scottish Building Apprenticeship and Training Council (SBATC) and Scottish Joint Industry Board (SJIB) wage rates. The host company is asked to support apprentices for a minimum of three months at any time, although placements can last longer.

Scottish Apprenticeship Ltd[154] is unique in that is has successfully delivered a shared apprenticeship model for the first time. However, SDS has identified some issues with the model including, around the length of time individuals remain with the same employer, feedback from apprentices around moving between employers and the size of employers involved. A full evaluation has not yet been undertaken so it is difficult to gain a clear picture of the merits of the programme.

The role of a shared apprenticeship scheme is important within the construction industry as much of the current training provision is taken forward by small and medium-sized employers, with large numbers of smaller employers in the industry particularly in rural areas. A range of trade federations and employers have expressed interest in the shared apprenticeship approach. The CIIG believes a positive step forward would be for SDS to work with CITB, employers, trade federations, professional bodies and trade unions to develop principles for taking forward a shared apprenticeship scheme successfully and in line with fair work principles. This may also help with the inherent tensions in supporting employers to engage with apprenticeships while offering narrower more specialised roles. If delivered successfully this scheme along with ‘swaps’ and other arrangements could prevent the deskilling of construction trades as it incorporates more modern methods of construction at scale.

Equality, Diversity and Inclusion

There has been significant focus placed on the issue of equality within construction with a range of schemes and programmes designed to encourage a different workforce profile. Despite this equality, diversity and inclusion issues within the industry remain largely unchanged over the last decade.

The evidence shows that construction industry faces significant challenges with regard to equality, diversity and inclusion. This is illustrated by:

With an ageing workforce and growing skills shortages tacking negative perceptions of construction and encouraging a wider more diverse workforce is key to strengthening the industry and meeting future challenges.

3.2.2 Improving Equality, Diversity and Inclusion in Construction

Evidence suggests that when women do work in construction they work in more technical roles or in backroom functions like human resources or administration. The SCER & FAI research also noted evidence from unions that when women work within craft trades they are more likely to progress and to access senior positions than their male counterparts. There is, therefore, reason to suggest that working within construction can and does offer fulfilling roles to women, yet, there is also the reality that many women are not attracted to the industry.

‘Female apprentices they tend to go up the scale pretty quickly, they tend to be off the tools pretty quickly, and into work based positions or site based positions …a lot of supervisors within the painting occupation are women’

Union Officer

Source: SCER & FAI (2020), Facing the future constructively? The experience of work in the construction industry in Scotland

The Inquiry considered both perceptions of the industry and genuine constraints to work practices that could act as disincentives to women. There is a widely held perception that outdoor working is unattractive to women and therefore the nature of construction work is, in and of itself, a barrier. The Inquiry found no compelling evidence that this is the case, but noted limited studies examining men or women’s preferences with regard to outdoor working.

There are, however, other issues within the nature of how construction works that might act as barriers to women. Firstly evidence suggests that women have a stronger preference for roles which offer flexible working options. While some roles within construction may support flexible working practices, there are significant barriers for construction site based working and trades in this regard. The Inquiry noted that Local Authority regulations often stated that work can only take place 8am-6pm, placing a clear limit on the working day. Equally the seasonal and transitory nature of many of the jobs in the industry is difficult to overcome, as is the pressure from clients and the intensity of the work which often drives a long hours culture.

Case Study - Timewise Flexible Working Pilots.

Flexible working pilots were designed and trailed by Timewise and Build UK, with support from Barclays LifeSkills programme and CITB. These pilots set out to test whether improved access to flexible working for site-based teams in construction, could address some of the long hours, cultural issues and demanding working patterns.

The initial phase of the pilots identified structural barriers that relate to how work is organised which place genuine operational constraints to flexible working in frontline construction roles. These included the interdependency of roles, constraints on site operating times, workers’ long travel times to reach site, the challenge of decoupling time and output in situations where people were hourly paid, client expectations, and the differing pay methods and interests of the multiple layers of directly employed, self-employed and subcontracted workers.

The second phase of the pilot was to trial specific working patterns. These varied between sites to match the individual operating constraints and included:

These pilots found that:

However, Timewise notes that because of a number of complex operational barriers, a systemic roadmap for change is needed, to ensure that any new approaches meet business drivers as well as benefiting workers’ wellbeing. Timewise therefore also recommends that all firms carefully trial their plans to increase flexible working, on one or two sites, before rolling out.

Source: Timewise (2021), Making Construction a Great Place to Work: Can Flexible Working Help?

These pilots provide a useful starting point to consider how working practices can be adapted and modernised to encourage a more diverse workforce within construction. The need to make construction an attractive place to work and to tackle negative perceptions of the industry is clear.

There are also elements of the culture of work within construction where attention is also required. Construction is a male- dominated industry which creates a sense of isolation that can act as a deterrent for women and other under-represented groups.

‘Pregnancy is a very big issue in construction trade unions don’t help with this situation’

Worker

Source: SCER & FAI (2020), Facing the future constructively? The experience of work in the construction industry in Scotland

The SCER & FAI research also presented a worrying picture of some of the workplace cultures. Respondents to the research reported high incidents of verbal abuse, bullying and harassment, and humiliating treatment and behaviours compared to wider survey evidence, on the grounds of age, religion and nationality. A large minority reported that employers did not deal with this effectively, and workers subjected to these forms of treatment had a higher intention to quit the industry. Worryingly unions also reported that workers are fearful of raising any concerns over bullying and harassment as it may affect their employment prospects.

It is important for the industry to face up to the experience of its workforce and to recognise that bullying, harassment, racism, homophobia, sexism and religious discrimination need to be tackled in all parts of the industry, and standards must be high throughout the supply chain. While progress on these issues has been made, particularly within larger employers, there is a need to ensure that the perception and indeed, at times, the reality of the industry as an unsafe working environment for certain groups is tackled. This starts with clear and straightforward policies for dealing with issues within an agreed timescale. Clear communications and leadership from the top of organisations about these polices and a culture of respect and intolerance to bad behaviours and discrimination is key to making meaningful change.

Research from CITB on the perceptions young people have of the industry suggests that concern about discrimination remain which includes a sense that construction is an environment where sexism is common and racism and homophobia still exist.[159] Go Construct[160] was developed by CITB to breakdown the stereotypes around careers in the construction industry. It is an important resource as it emphasises what a career in construction offers, as well as how to join, train and progress through the industry.[161] Evidence to this Inquiry from CITB and SDS suggests that young people’s awareness and use of the Go Construct website is particularly low in Scotland.

It was also clear from evidence to the Inquiry and from the SCER & FAI research that mental ill-health is a significant issue on construction sites which is given insufficient attention within the industry. The SCER & FAI research found that:

‘Stress and mental health issues were experienced by 13% of survey respondents but when analysing this by employment type, 15% of those directly employed had been absent due to stress and mental health compared to 5% of those in non-standard work reporting absence from work due to stress and none absent for mental health reasons. By definition, this latter group will have more limited access to sick pay, which may explain in part the differences in findings.’[162]

A recent report by CITB also looked at the issue of mental health within the construction industry. The report found that the risk of suicide among some site based male construction workers was three times the national average and skilled finishing trades, such as painters and plasterers, were twice the national average. The report also found that key triggers of poor mental health in construction were:

It is notable how many of these issues relate to fair work within the industry. Improving fair work outcomes within the industry should therefore support more positive mental health outcomes for workers in construction.

The Inquiry Group pointed to the need to offer greater mental health support on sites and to recognise that the physical pressures of the job and the insecure nature of work within the industry could place high burdens on mental health. Part of supporting change and improving diversity in the industry will need to consider the issue of improving mental health for workers.

‘Long term health/disability issues are not addressed and provisions are not made for peeps who have developed these during their employment with the management more likely to make things difficult so the individual will leave thinking it's their fault’

Worker

Source: SCER & FAI (2020), Facing the future constructively? The experience of work in the construction industry in Scotland

Existing collective agreements in the industry do not always consider issues that may support improved diversity. It is important to consider how existing collective agreements can better support issues like mental wellbeing, maternity and flexible working and how they can encourage better outcomes for workers.

3.2.3 Recruitment Practice

The Inquiry heard evidence that recruitment within the construction industry could often be on the basis of word of mouth and that many roles are not advertised. Evidence was found in a range of areas:

The CIIG recognised that attracting workers to the industry is a key priority. It is notable that when most roles in the industry are advertised they are oversubscribed, suggesting that perceptions of the industry may already be more positive than is currently perceived.

While in some respects it is a strength of the construction industry is that it recruits locally and it creates a variety of entry routes, it is also important that employers are able to use more formal recruitment channels, particularly if they perceive a skills or labour shortage in their area. It is also likely to be detrimental for equality and diversity if only a small number of roles are advertised and this method of recruitment is therefore the most competitive.

A recent report by CITB noted that construction workers are more likely to have found a job through their personal network and word of mouth rather than through competitive application. If workers without the right personal contacts don’t get a chance to apply, industry misses their talent.[164] CITB have also developed a new toolkit for employers to support them to take on apprentices. This will be launched in apprenticeship week.[165]

While the construction industry as a whole lacks diversity it is striking that Glasgow City Building and Royal Strathclyde Blindcraft Industries have a higher level of diversity within their business than is usually seen within the industry. As the two case studies below highlight, a clear business choice has been taken to promote and support diversity. Interventions have been made to support a more diverse workforce, including ongoing support for the apprentice throughout the apprenticeship programme. This offers a model of good practice that could be adopted more widely in the industry to support improved diversity outcomes.

Case Study - City Building

City Building is one of Scotland’s largest construction businesses. It comprises two organisations:

1) City Building (Glasgow) LLP (CBG) which has operated as a 50/50 joint venture between Glasgow City Council and the Wheatley Housing Group since 2017, and

2) City Building (Contracts) LLP (CBC), which is a wholly owned Arm’s Length External Organisation (ALEO) of Glasgow City Council (GCC).

A strong social ethos underpins their operations. Recruitment strategies, for instance, target those furthest away from the job market including young people and people with disabilities. A 2018 commissioned review of equality and diversity within the business found that almost a quarter of staff – 24% – were from the most impoverished postcodes (Scottish Index of Multiple Deprivation 1) and 54% of apprentices were living in the two most deprived data zone areas.a

City Building employs around 250 craft apprenticeship, equivalent to around 13% of its overall workforce. This makes up 4% of all craft apprentices in Scotland, including 20% of all female craft apprentices in Scotland. In 2020 alone, 60 new trade apprentices joined the business. This included 3.3% who identify as BAME (black and minority ethnic) and 7% womenb. City Building undertake all repair work for Wheatley’s social landlords in the west of Scotland including Glasgow Housing Association (GHA) and targets are also set for providing training to care leavers and people living in Wheatley Group homes. The business’s commitment to apprenticeship has been further demonstrated by an investment in a New Craft Apprenticeship Training College, which aims to deliver 2,000 new craft apprenticeships over the next 30 years.

City Building reports one of the highest qualification rates in the industry, with around 94% of apprentices becoming time-served compared with an industry average of around 75%. A Fraser of Allander Report suggests their success is due to factors including: the method of recruitment that guarantees all applicants an interview/assessment and places more emphasis on work ethic and commitment than formal qualifications; passionate instructors; wrap-around support and support for ‘softer skills’ (e.g. social awareness, financial wellbeing, drug and alcohol awareness, social media and counselling services).c

The strong collective agreement with Unite covering 2,200 of City Buildings workers, including their craft apprentices, further supports the ambitions of the business.

Source:

a. City Building Glasgow (2018), City Building discloses diversity performance in landmark report

b. City Building Glasgow (2020), City Building recruits 60 new apprentices

c. Fraser of Allander (2021), The economic, social and environmental benefits of stimulating repairs and improvements to the Scottish built environment to aid a green recovery from Covid-19

Case Study - Royal Strathclyde Blindcraft Industries

Royal Strathclyde Blindcraft Industries (RSBi) is the manufacturing division of City Building. It is a ‘supported business’, defined as an enterprise where over 50% of their workforce have a disability and these individuals are assisted to get and keep paid jobs. These jobs are, however, also available in the open labour market as opposed to ‘sheltered employment’ where jobs are not available in the open labour market.

A survey in 2018 found that 51% of RSBi employees had a disability, 13% were women and 2% were from ethnic minorities. The workforce’s average age was 44 and average length of service was 14 years. Most disabled employees come to RSBi via their local Jobcentre Plus. In 2018, 42% of RSBi employees were supported by the ‘Work Choice’ scheme - a programme run by the DWP with the specific aim of supporting people with disabilities who want to work, which is accessed from Jobcentre Plus. From 2019, temporary TESC funding , provided by Access to Work, replaced Work Choice for 109 RSBi employees for a period of two years. Workers at RSBi are able to access a range of support through the business’s onsite Learning Centre (including courses to develop core skills such as numeracy, IT and literacy as well as life skills). Good progression opportunities exist for all staff.

There are a small number of similar supported businesses in the construction sector. Dovetail Enterprises (Dundee) and Highland BlindCraft (Inverness), for instance, are both suppliers to Lot 1 (furniture and associated products) on the Scottish Government’s “multi-lot, multi-supplier framework for the provision of commodities reserved for supported businesses”. However, many other long-standing businesses following a similar model have been forced to close including Blindcraft Edinburgh, which shut in 2011 after more than 200 years in operation. RBSi has been a highly adaptive and proactive business – seeking new commercial opportunities as they arise in the sector, while also producing high-quality products. However, financially, it can be costly to run a business which offers the levels of support to employees that RSBi does. The involvement of City Building and security of core housing contracts have proven to be important to safeguard the business and what it offers disabled workers.

Source: GenAnalytics (2019), Building greater diversity and inclusion in the construction sector

Construction will need to recruit large numbers of workers in the next few years to deal with the changes in the workplace and to support the transition to a zero carbon economy. This provides a key opportunity to consider how to strengthen recruitment practice on an industry wide basis with a high-profile recruitment campaign which builds in strong diversity messages. The role of supported businesses could also be strengthened in the industry particularly when expanding the use of off-site construction or modern methods of construction.

3.2.4 Modern Slavery

Construction has been identified by the Gangmasters & Labour Abuse Authority (GLAA) as at high risk for modern slavery practices, with the complexity of the supply chain highlighted as the key driver of exploitation. Modern slavery is clandestine, involving unskilled labourers and cash-in hand working and often relates to gangmasters or agency work. The GLAA identifies that the workers most likely to be victims of modern slavery in construction are Romanian or Albanian men under 45 years of age, with limited English language skills. These workers are often unskilled and in possession of fake CSCS cards and as a result can cause safety issues on sites.

Trafficked workers are subject to significant labour abuses including wages below the National Minimum Wage at around £10-£50 per day, or wages withheld completely or coming in the form of food and accommodation. The GLAA have limited intelligence of the level of risk associated with the construction industry in Scotland with much of the identified poor practice reported in the South East of England.[166]

The GLAA has developed a construction protocol which encourages large construction companies to monitor practice within their own supply chains, to be aware of who is working on sites and to have clear processes in place for everyone on sites to raise concerns.[167] This approach aligns well with wider fair work practice, particularly the emphasis on voice mechanisms to raise concerns.

When dealing with fair work issues it is important that the issue of trafficked workers is not forgotten. Given that construction is a high-risk industry and given that the construction protocol now exists, contracting authorities should be setting an expectation that larger companies participate in the construction protocol and monitor their own supply chains.

3.3 Recommendations on the Future of Construction

The construction industry is at a moment of change. In the next ten years it faces an ageing workforce and skills shortages and must meet the challenges associated with delivering a net zero carbon economy. Skills Development Scotland (SDS) estimates that an additional 79,100 workers will be needed in construction by 2029[168] and extensive upskilling and retraining of the existing workforce will be required to support the decarbonisation of the built environment. This is also an opportunity to transform the workforce, creating higher-skilled roles, more diversity and equality, and building in modern methods of construction and new ways of working. The Inquiry found that:

The Inquiry Group therefore makes the following recommendations:

The Future of Construction

Recommendation 13

Employers should better engage with existing collective agreements, and unions and trade associations should be prepared to work together to ensure collective agreements support new ways of working and equality, covering elements like flexible working, mental health and maternity issues. The Scottish Government should facilitate unions, employers and trade associations to work together to support effective modernisation within the industry through the collective bargaining structures that already exist.

Owner

Timeframe

By 2023

Recommendation 14

The Construction Leadership Forum should support development of an effective workforce strategy to facilitate the transition to net zero carbon economy. Workforce planning must consider how to support workers through peaks and troughs in demand.

Owner

Construction Leadership Forum

Timeframe

By 2023

Recommendation 15

All public funding supporting the transition to net zero should include fair work conditionality and drive fair work in the industry.

Owner

Timeframe

With each funding stream

Recommendation 16

Public sector bodies and construction employers at all parts of the supply chain should increase their use of direct employment and support upskilling and retraining to support high quality careers in the industry and improve attraction and retention. Support for direct employment should also reinforce a commitment never to use umbrella companies.

Timeframe

Immediate

Apprenticeships

Recommendation 17

The Scottish Government should work with SDS, SQA and CITB to reinstate the need to register with trade associations / federations and employers should be required to pay collectively bargained rates as part of the apprenticeship agreement, as was the case prior to 2017.

Owner

The Scottish Government

Timeframe

Immediate

Recommendation 18

SDS should take action to support apprenticeship pay including by:

Owner

SDS

Timeframe

By September 2022

Recommendation 19

Continued funding and support should be provided for the Fair Work Apprenticeship Coordinator role, which has been valuable for supporting the Effective Voice of apprentices.

Owner

The Scottish Government

Timeframe

Ongoing

Recommendation 20

SDS should ensure there is full and consistent partnership working between SDS, SQA, CITB, trade unions, employers and trade associations/federations in agreeing apprenticeship frameworks, with an aim to see all construction apprentices trained to SVQ level 3 (SCQF Level 6) or above.

Owner

SDS

Timeframe

Immediate

Recommendation 21

SDS to work with CITB, employers, trade associations/federations and trade unions to develop principles for taking forward a shared apprenticeship scheme successfully and in line with fair work principles.

Owner

SDS

Timeframe

By Dec 2022

Equality, Diversity and Inclusion

Recommendation 22

Scottish Government through the Construction Leadership Forum should convene a working group that includes employers, trade associations/federations, trade unions, SDS and CITB to address skills and labour shortages and future labour needs in the industry and to promote the opportunities that exist within the industry. This group should aim to:

Owner

Timeframe

Advertising Campaign to launch in 2023

Recommendation 23

Employers should support a zero tolerance approach to bullying and harassment at the workplace protecting workers from adverse treatment and employers from potential liability. Embedding a safe culture for reporting must come from the top of the organisation. Employers of all sizes must focus on:

Owner

Construction employers of all sizes

Timeframe

Immediate

Recommendation 24

Unions should provide support mechanisms and dedicated networks for under-represented groups in construction to combat the isolation that workers can feel at work or on training schemes. Employers, trade associations and other relevant actors should signpost to these networks and any dedicated officers who can offer support.

Owner

Trade Unions

Timeframe

Immediate

Recommendation 25

Contracting authorities should require participation in the Gangmasters & Labour Abuse Authority’s construction protocol within large-scale procurement projects.

Owner

All Contracting Authorities

Timeframe

With each large-scale procurement