21 Nov 2017

CITB gets it, but does the rest of construction?

20 NOVEMBER, 2017

Paul Morrell the former government chief construction adviser who was an adviser to the government steering group which reviewed the CITB thoughts are set out below: –

The response to the government review of the CITB, on which I advised, shows the CITB gets it!

Specifically, that it understands that the positive result of consensus and of the review are not so much the end of a process, as the beginning of a much more challenging one – with scarcely a moment for a sigh of relief.

One question, however, is whether the industry gets it too. There is no doubt that the CITB has lost its way over the years, growing so far beyond its original purpose that the purpose itself has got lost in the mist.

The consequence is that an industry that finds it hard to lead but easy to blame, blames the CITB for everything. It is, for example, no more the fault of the CITB that there is a shortage of bricklayers now, than that there was a surplus of them when the housing market collapsed in 2009. These constantly recurring imbalances are part cyclical and part structural.

Structural failure

To the extent that they are cyclical, it is no more use railing against that than to rail against gravity. The structural matters are, however, both the evidence and the result of market failure. In a fragmented industry with a diverse and cyclical workload, the rewards for having a skilled workforce are too remote and too indirect to motivate investment.

Addressing that market failure is the purpose of the statutory levy, and it is frankly astonishing that, having contributed to it, the industry gives so little thought as to how it should be spent to best effect.

The critical need now, therefore, is for the industry, as an act of leadership, to provide and agree the vision of how the levy might be used to gather regional market intelligence at one end of the process; how developments in IT, offsite fabrication etc, might change the nature of skills needed in the future; and how people can be attracted into the industry and trained up for those future needs.

Government will expect something better than our current pitch of demanding more spending and a waiver from any restriction on the free movement of labour.

The role of the Construction Leadership Council in bringing the industry together to agree with the CITB what this adds up is critical. But it must also involve the trade associations – or at least, those who put equipping their members to make an honest living above protectionism. There should also be a proper representation of the breadth of the industry on the CITB board and council, and in government.

As Brexit simultaneously increases the need for productive infrastructure and undermines our ability both to build and pay for it, the government will expect the industry to come up with something better than its current pitch of demanding more infrastructure spending and a waiver from any restriction on the free movement of labour – including how we plan to build capacity over the next five or 10 years.

Standing up for ourselves

As part of owning the vision for the levy, the industry must be prepared to stand up to free riders and to those who pay the levy then apply all of their energies to getting it back again. Clearly no market failure is resolved  particularly in building a training fund for smaller companies from the contribution of larger ones if everyone gets their own money back.

The CITB can then focus on meeting an agreed core purpose, confident that it will be judged against proper strategic targets, rather than trying to please everyone by demonstrating that funds have been distributed fairly.

The chances of being judged positively will then be substantially enhanced if the CITB adds to its six published objectives a seventh: a programme of major internal cultural reform, replacing the sense of wading through organisational treacle, with a service culture focused on customers.

That is a particular challenge when many of those that the CITB serves don’t actually want to be its customers. But without bringing about that transformation, I fear the other six objectives will not be deliverable. The idea that “culture eats strategy for breakfast” is a cliche for a reason: it’s true.