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The Minister for School Standards (Nick Gibb)
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) on securing this debate.
At the heart of our industrial strategy is having a skilled workforce that supports the continued development of our economy. The construction workforce is fundamental to that development—to building new homes, hospitals and schools and creating new jobs across the country. The workforce needs to be of a high quality, and the Construction Industry Training Board plays an important role in ensuring that the construction workforce grows and is trained to a very high standard.
I appreciate my hon. Friend’s concerns about CITB selling Bircham Newton as part of its wider reform plans, and I have listened carefully to what he has said. He made a compelling case for the CITB HQ to remain at Bircham Newton in his constituency. I can confirm that Ministers do not have a preference for where the HQ should be located. We support the reform programme and “Vision 2020”, which emerged from the industrial training boards review. I also appreciate that the local community is understandably apprehensive about the impact the reforms and this particular proposal will have on them.
CITB is an industry-led statutory body established under the Industrial Training Act 1964. It has a central role in training the construction workforce. It provides a range of services, including setting occupational standards, funding strategic industry initiatives and paying direct grants to employers who carry out training to approved standards. CITB is funded by a levy on British construction firms in England, Scotland and Wales. The levy is approved every three years by a consensus vote of industry federations. There is a serious risk that without that levy-funded training, there would not be enough skills training in construction and the sector could face a serious skills shortage. Construction has a weak track record of investment in skills and is characterised by high levels of self-employment and the use of subcontractors. Indeed, those are two fundamental reasons why we have a levy and why CITB was established.
In the autumn Budget and the housing White Paper, the Government announced a target of building 300,000 new homes a year by the mid-2020s. That relies on having a skilled, highly trained workforce. The UK construction sector needs highly skilled people with the capacity to carry out that scale of work. CITB’s strategic oversight of construction skills training is critical in ensuring that.
A recent Government report on industry training boards concluded that industry training boards with levy-raising powers remain the right model to support the construction and engineering construction industries. It recommended that CITB reforms its operating model and re-focuses on addressing the market failure to train enough skilled staff. It saw the need for CITB to concentrate on driving improvements in skills and training outcomes in line with its statutory purpose.
The industry itself recognises the need for change. The 2017 levy consensus consultation saw equally clear calls from the industry for CITB to reform. In response, CITB announced a major reform programme on 15 November 2017. Its aim was to reposition and repurpose itself to deliver the skills required by the industry. The reform programme has three key elements: the divestment of CITB’s skills training sites; the outsourcing of back office facilities in line with public sector activity—including human resources and IT, among others; and the creation of a single, centrally located headquarters.
CITB will no longer directly train construction workers in its network of training centres located around the UK or run the industry-led construction skills certification scheme, as my hon. Friend referred to. At present, CITB has significant conflicts of interests as it is the provider of training and the body responsible for setting standards. Leaving the training market will allow CITB to focus on its core functions of market sustainability, quality and standards. Outsourcing back office functions will enable CITB to make substantial savings. It is standard practice. CITB will work with future providers to minimise any effects on staff.
CITB’s head offices functions are currently spread over seven sites. Unsurprisingly that results in duplication and inefficiencies, as well as creating an unwieldy decision-making process. Creating a single head office will streamline CITB’s decision making, as well as increasing business co-ordination and continuity. The location of the head office is important. CITB covers the whole of the UK. A central location therefore makes sense for practical and business reasons. As I mentioned earlier, as Ministers we have no view on where that central location should be.
On 27 March 2018, CITB opened a consultation on the creation of a single head office and its location. All parties that could be affected have been involved. CITB is consulting a total of 133 head office staff from the sites in London, Bircham Newton in Norfolk and Thurmaston in Leicestershire. The Norfolk site has the largest number of head office staff, as my hon. Friend said. There is local concern about the future of the site, and the consultation process is still open. On 4 July, CITB discussed its intention to proceed with the head office relocation with its affected staff. CITB remains open to any proposals that meet its long-term requirements.
I am grateful to my hon. Friend for highlighting the issue. There is a strong public interest in having a highly skilled and efficient construction industry. The country’s economic success and social progress rely on building more homes and delivering key infrastructure projects. We need a highly skilled construction workforce with the capacity to carry out the Government’s house building ambition and key infrastructure projects. CITB has a vital role to play in delivering that skilled workforce. It is crucial that CITB is able to deliver its reform programme to undertake that role and to retain the trust and support of the industry it serves.
Motion lapsed (Standing Order No. 10(6)).