Construction Industry Training Board HQ

Tuesday 17th July 2018 Westminster Hall

11:00

[Sir Henry Bellingham (North West Norfolk) (Con)]

I beg to move,

That this House has considered the Construction Industry Training Board proposal to move its headquarters from Bircham Newton, West Norfolk.

Thank you very much indeed, Mr Betts, for calling me to speak. It is a great pleasure to serve under your chairmanship for a debate on an issue that may not be of crucial national importance but is extremely important for my constituency.

The Construction Industry Training Board has been based in Bircham Newton in west Norfolk since 1964. CITB took over a disused RAF station—RAF Bircham Newton—and when the then Government gave it the base, which comprises about 300 acres, the quid pro quo was that it would move the National Construction College and the training activities to Bircham and, basically, take over the jobs that had been supplied by the Ministry of Defence and the RAF. Today, about 600 jobs are based at Bircham and they are spread in roughly four ways, among the headquarters, the National Construction College and other colleges, the card scheme call centre and the awarding body.

CITB raises about £300 million in income every year—in fact, the amount for the current financial year is £307 million—of which I believe 63% comes from the levy, authorised by Parliament, allowing CITB to raise money from the industry. That money is used on the grant scheme and charitable activities; in fact, CITB is a registered charity.

I am delighted to see that it is the Minister for School Standards who will respond to this debate, because although he is not the Minister responsible for this issue, his position means that he takes a great interest in the whole apprenticeship and skills agenda. The construction and civil engineering sector is a vital part of our economy. In order for it to be able to compete internationally and deliver the highest possible safety and skills, it is necessary to have an organisation such as CITB and, indeed, a levy, without which CITB would not be able to raise money from the industry.

I will not go into too much detail about why we need CITB, because I want to concentrate on its “Vision 2020” and what will happen in the future. Before doing so, however, I will just say a word or two about the proposal’s profound impact on my constituency. King’s Lynn in the centre of my constituency is a town of about 40,000 people and it is surrounded by many remote rural villages. Bircham is about 10 miles from King’s Lynn and CITB is a very big employer in a remote rural area. It provides high-quality jobs, and the links to the community, which have been established over all the years that CITB has been at Bircham, are extremely significant, because CITB has been excellent in its outreach to the community and in putting in place its community social responsibility.

Of course, there is also the multiplier effect, because an organisation employing that number of people on good wages in a remote area will have a profound impact on suppliers and on the small and medium-sized enterprise sector. That multiplier effect underpins probably at least as many jobs as CITB offers directly, possibly many more.

There has been a really important link between the community of west Norfolk, my constituency and CITB. I also suggest that there has been a covenant, as it were, between CITB and the local area, because we have supplied it with a truly excellent place to do business, to carry out its training and to locate its headquarters; in turn, CITB has made investments in the area. That covenant between CITB and the local area is based on trust and partnership.

As the Minister will be aware, in 2017 a consensus process was carried out and, furthermore, Her Majesty’s Government carried out an industrial training board review. One of the conditions of CITB raising the levy, through statute and under parliamentary control, is that it needs to build consensus with the industry and get its support.

Obviously, the consensus process takes place regularly, and in 2017 consensus had to be built with the industry at a time when many smaller firms were finding the levy onerous, and a number of larger construction and civil engineering businesses were making it very clear that they wanted CITB to change. They all took the view—and I think the Government did, too—that CITB was underperforming, had rather lost its way and needed a new vision. The result was last year’s CITB’s “Vision 2020” paper and recommendations.

CITB submitted a business plan to adopt a simpler and more streamlined way of working, and described it as “levy in, skills out”. It wants to become an oversight body and an enabler, rather than a direct provider of different services. Part of the process of building “Vision 2020” is to exit direct training. At the moment, CITB provides the training itself through the National Construction College and other colleges, which are incredibly impressive. They operate out of a number of buildings in Bircham Newton, some of which are former RAF hangars and ideal for different types of training, including bricklaying. Outside those hangars—indeed, on the airfield itself—CITB can provide scaffolding training and heavy plant training. There is a huge amount of space and the National Construction College is a world-class college.

I certainly find it regrettable that CITB is going to exit direct training, because there is a cadre of really impressive instructors and support staff at the National Construction College. I understand the arguments—although I do not agree with them—that the CITB should exit direct training to become an overseer and an enabler.

The second part of “Vision 2020” is to hive off CITB’s non-core activities, such as the card scheme and the awarding body, and the third part is to co-locate the headquarters. Currently, CITB’s headquarters are split among Bircham Newton, London and a few satellite offices. Let us look at each of those in turn.

I have already mentioned the National Construction College and the world-class activity that goes on there. Any Minister who visits it can only be impressed at the calibre of the instructors, the ethos of the place and its reputation for delivering top-class training. Furthermore, a lot of money has been spent on the college’s training facilities, the hangars and the other support facilities, as well as on the student accommodation, which is obviously vital. If the aim is to attract students sponsored by the different construction firms, those students require good accommodation and a lot of money has been spent on that in recent years.

I think that moving away from direct training is a bad decision and I believe that a more confident, better-run and better-managed organisation would have had the presence of mind to have made the case for retaining the direct training provision. However, that argument has now moved on, leaving, unfortunately, a great deal of uncertainty among the cadre of instructors and support staff, who feel they have been very badly let down. On the other hand, there are many construction and civil engineering businesses out there that I think will consider taking on that contract. I have spoken to plenty of firms that have great trust in Bircham and I think they will put in a bid to take on the contract to provide training.

Let us have look at the other parts of “Vision 2020”. The card scheme and the awarding body are non-core activities and will be sold off. In fact, the awarding body has already been sold off to a larger business, which has moved it to an innovation and technology centre in King’s Lynn. That is very good news indeed and there is no reason why the card scheme, which is based near a call centre, cannot stay in the area, too. The prospects are promising and I am working with CITB to ensure that that process makes progress.

As I have said, the headquarters are currently split among mainly London, Bircham Newton and a number of satellite offices. There has been a consultation on moving the headquarters, and CITB says that it wants to co-locate them. I absolutely get that argument because split headquarters do not enable the best possible streamlined management that we would expect. Unfortunately, the consultation has been extremely badly handled and the staff have been let down in many ways. Had there been a better consultation, the current situation of really poor staff morale might well have been averted. For example, at the start of the consultation process, incorrect letters were sent to a number of employees. According to middle management and the unions, which have proposed an alternative plan, that has led to a huge amount of stress and confusion. I certainly believe that that could have been avoided.

In its paper of 25 June, CITB makes the case for new streamlined headquarters. I get that, but I do not understand why it says that they cannot be at Bircham. It says that they need to be moved to a new location, away from Norfolk, that has better communications and a better pool of skills, and which clients, industry and the Government are able to reach more effectively and efficiently. Middle management and the unions made an alternative case for keeping the headquarters at Bircham, which I support 100%. At this juncture, for CITB to move from headquarters that it owns and has recently spent a great deal of money on makes no sense whatsoever.

I will go through the main arguments for staying at Bircham. If an organisation owns somewhere and then sells it to move to another office it owns, I get that, but CITB says that it will sell the entire Bircham site and rent an office, preferably at Peterborough. I have nothing against Peterborough. My constituency has great economic links with the city and, indeed, with Cambridge and Norwich, but Peterborough is about 40 miles away. Yes, it has good communications, being on the A1 and having a main line rail service, but King’s Lynn also has a good rail service and, with modern working practices in place, and with the power of the net and more flexible working, there is absolutely no reason why the headquarters cannot stay at Bircham. Furthermore, the headquarters staff are trained up, highly motivated and know the area. They work in extremely congenial surroundings, on a former RAF base in beautiful countryside with the most fantastic views. Job satisfaction is incredibly high. They do not have far to drive to work—some probably cycle. It is a very happy atmosphere, which has been completely poisoned by CITB’s suggestions. What is worse, in the collective consultation’s supporting information the organisation has the nerve to say that middle management and the unions have not put forward an alternative location. They have, and it is Bircham. That statement is completely and utterly insulting.

Furthermore, staff must be kept on side. The process will be difficult and tough. If CITB moves out of direct training, it must have supportive and loyal headquarters staff who are motivated and who understand the organisation. What it has done so far is to collapse staff morale, creating real anger and bitterness, and I am very angry myself about how this has been handled. The organisation has been extremely badly managed at the higher level—middle management has done an excellent job—with an absolute absence of strong leadership and, indeed, proper vision. It keeps talking about “Vision 2020” but there has been no proper vision regarding how the organisation should move forward and, as a result, the staff are extremely angry. A new chairman has come in, Peter Lauener, for whom I have great admiration, but he has his work cut out. If the organisation is to recover in any way, shape or form, the decision must be reversed.

There are other arguments for staying at Bircham, which I will briefly put to the Minister. The first is that it is important to have a positive, constructive relationship with the new training provider, whoever that might be—it could be one of the large civil engineering companies, or a further education college. The training contract is worth many millions of pounds—possibly hundreds of millions. If the headquarters move to Peterborough and all the current staff are either contracted out, as some will be, or do not move—the staff surveys show that very few want to—there will be new management and historic knowledge will be lost. The current staff will not be on hand to manage the important relationship with the new provider. There are bound to be teething problems with the new provider, with the protocols and the specifications, but it needs to be a partnership. If the headquarters are moved to Peterborough or elsewhere—such as Milton Keynes, or even down to the south coast—that staff will not be on hand to oversee and work alongside the new training provider.

Another important reason why CITB must stay at Bircham—in the short term, at any rate—is the oversight of the masterplan for Bircham Newton. I will not go into details, but my right hon. Friend the Minister can talk to my right hon. Friend the Member for Esher and Walton (Dominic Raab)—I am glad to say that he is now right honourable—who, when he came to Bircham the other day, as Minister for Housing, which includes responsibility for planning, was incredibly impressed by what he saw. I think he was amazed at how modern and impressive the buildings were, and really blown away by the site and all it had to offer.

The site is more than 300 acres and is divided in half by the B1153. The eastern part, which is probably half of the total acreage, has been completely underutilised historically and it has the most phenomenal potential for all sorts of exciting, dynamic possibilities. There could be some new housing or a science park, and there is no reason why we could not have an offshore wind farm academy. Along the Norfolk, Lincolnshire and Suffolk coast there are vast numbers of offshore wind farms and there is a burgeoning onshore service sector. However, we need skills and training in that sector, and what better place to locate a college than Bircham Newton? There could be demonstration eco-homes on that part of the site, provided by different construction and housing companies that would bring their trainees from around the country to work in an environment that would be highly conducive to improving those skills. There could also be supply chain centres of excellence.

To oversee such a great programme of reform and innovation, we need a strong input from CITB itself; it needs to be on hand to oversee the masterplan. We have in place a taskforce of which I am a member, chaired by CITB and with the membership of the local councils, the borough council, the county council, the local enterprise partnership, the further education college and all the other bodies that really want to make the masterplan work. If we get that plan right, we will have something to be proud of. As the Minister knows, Norfolk and Suffolk have far too many disused RAF bases that have not had a masterplan and have been subjected to inappropriate development with no proper oversight or consistency, and all the things that can go wrong with ad hoc development on a brownfield site have gone wrong on some of those airfields. They are not places to be proud of. If we get this right we will have something we can be really proud of, but we need CITB on hand to work alongside the MPs—my right hon. Friend the Member for North Norfolk (Norman Lamb) and me—and the local councils, the LEP and so on. Getting it wrong does not bear thinking about.

What I suggest to CITB is a compromise arrangement. I will go along with plans to diversify training and sell off non-core activities, and I also support the plan to co-locate the two headquarters, but what I am saying to the incoming chairman, Peter Lauener, is that he needs to keep the headquarters at Bircham for at least three to four years. If he does that, he will not hollow out senior management, lose a huge amount of historic knowledge, go through very costly disruption or spend a lot of money that CITB probably does not have on renting new offices, and he will be on hand to oversee the training partnership and the masterplan.

What I find depressing is that the state of mind of CITB senior management seems to be such that it has made a decision and is determined to go, even though it says in letters that there is ongoing consultation on Peterborough and the preferred location for the joint headquarters. It says that is not a final position and that collective consultation remains open for the unions, middle management and elected employee representatives to submit for consideration any proposal that includes an alternative location. We have submitted exactly that—staying at Bircham.

Peter Lauener has two choices. He can either go ahead with this ill-thought-out, illogical move now—in other words, take a decision later this year and move towards the end of next year or in early 2020—or put things on hold and we can all see what the position looks like in, say, three years’ time. That would enable us to see how the training partnership and the masterplan develop. If the jobs are secured, would it be the end of the world if CITB then said, “We have overseen this great success story and we are going to move to somewhere that is nearer to our client base”?

Alternatively, it can carry on with the current policy, which will result in the organisation going into meltdown. There will be a further, complete collapse in staff morale and a withdrawal of co-operation and good will from the staff. There will also be a significant backlash from MPs in the region and county, the local councils and the LEP. There will be a dissipation and destruction of that good will, which will make life very difficult for CITB. It will be difficult to continue its current “Vision 2020”. If CITB carries on like this, MPs will say that the organisation is not fit for purpose, does not deserve the levy and deserves to close down completely.

Will the Minister make it very clear that although he supports “Vision 2020”, Ministers do not have a strong view on the organisation moving to Peterborough or any other new headquarters? Ministers should listen carefully to what I am saying, call in the new chairman and make clear to him that he is in danger of presiding over a complete disaster area. A once proud organisation will fail completely, unless action is taken.

11:22

[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)).

11:22

Sitting suspended.