Built Environment Committee
Tuesday 30th June 2026
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11:44
Speaker 1
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Speaker 1
It's with the college in their local area. So for example, some even have offices of space within the college so that they're working together really closely to, to build that apprenticeship experience for, for learners to make sure that it's seamless rather than one day they're with the college, another day with the employer. And there's sort of nothing that meets in between. Um, I think there's a lot of work that we're trying to do on the KTP programme to work with SMEs and micro-businesses around their.
Accessibility to understanding what the Fe systems about how they can work with students, how they can work with apprenticeships, and making that experience easier for them. So trying to get rid of some of the red tape, the bureaucracy, the demystification of what the Fe sector is about. So we're doing a lot of work on the programme around, you know, because because SMEs are key for.
Accessibility to understanding what the Fe systems about how they can work with students, how they can work with apprenticeships, and making that experience easier for them. So trying to get rid of some of the red tape, the bureaucracy, the demystification of what the Fe sector is about. So we're doing a lot of work on the programme around, you know, because because SMEs are key for.
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Speaker 1
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Speaker 1
That you're trying to do. So we've got, we've got on the Ctec program itself, we have ten hubs. Each of those have got a multitude of what we call spokes. So they could be colleges, independent training providers, you know, anything within the Fe sector, you know, we will utilise to make sure that there's enough people training our learners to, through their qualifications. So I don't I don't have a concern over that right now. I think the programme of work that we're focusing on at the moment is as wide reaching as it as it can be.
So.
So.
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Speaker 4
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Speaker 4
Baroness Barron. Thank you chair. Um, so I wanted to just get your. sense of what you would like to see the government focus on, uh, going forward and. prioritise like your top three things. Sam, if I can, um, start. With you in terms of addressing skills shortages. And if I may, I just, I mean, you must say what you think, but I'm.
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Speaker 4
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Speaker 4
There or not. Number two. Okay. Number two. Uh, and then the other thing is the lifelong learning entitlement and whether that will. change the. ability at. I think from memory, it's levels four and above for students to get finance for Fe to be better funded. But, but if they're not there, that's fine, but I'm just interested we haven't touched on either of.
11:49
Speaker 1
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Speaker 1
Those themes so far. Yeah. So I think I'll go to my number two then. I think the qualifications are absolutely key. What we're finding at the moment is, um, I think I mentioned right at the beginning, our learners are going through the qualification and seeking employment and the employers are feeding back that they're not, not site ready. Some of the qualifications we have funded to deliver are out of date. They need updating. I know that is not a quick process, but that is definitely something that's critical and needs to happen for us to ensure that the learners are not having those gaps when they get.
When they get to employment. That's really important for us. Um. One thing I was going to mention was around, and I think Baroness Andrews mentioned it earlier about that involvement in Fe at the planning stage of new towns. If we are involved right at the very beginning, we can help shape that. And there are some good examples of where that's actually happened in Exeter, for example, where they you know, the colleges have been involved right in that from the very beginning.
Um, it gives us time to align our curriculum because there's time to have the right staff in place, etcetera, etcetera, rather than, you know, a really quick turnaround. That's if he really struggles to deal with. So I'd say as a, as a, a quick win, but a win for us that that would definitely be beneficial. Um. I think. Social value for us is, is really important. We've not really picked that up. So that, that part around social, social value section 106 and that, um, the.
The need for tier ones to engage really well with their SMEs about what apprenticeships they're going to offer, etcetera, etcetera. That's key because and having oversight of or having oversight, having sight of that or being involved in that would be a game changer in terms of those apprenticeship vacancies.
When they get to employment. That's really important for us. Um. One thing I was going to mention was around, and I think Baroness Andrews mentioned it earlier about that involvement in Fe at the planning stage of new towns. If we are involved right at the very beginning, we can help shape that. And there are some good examples of where that's actually happened in Exeter, for example, where they you know, the colleges have been involved right in that from the very beginning.
Um, it gives us time to align our curriculum because there's time to have the right staff in place, etcetera, etcetera, rather than, you know, a really quick turnaround. That's if he really struggles to deal with. So I'd say as a, as a, a quick win, but a win for us that that would definitely be beneficial. Um. I think. Social value for us is, is really important. We've not really picked that up. So that, that part around social, social value section 106 and that, um, the.
The need for tier ones to engage really well with their SMEs about what apprenticeships they're going to offer, etcetera, etcetera. That's key because and having oversight of or having oversight, having sight of that or being involved in that would be a game changer in terms of those apprenticeship vacancies.
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Speaker 1
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Speaker 1
Sit for a new town. Yeah, absolutely. And part of part of the programme that we're working on, it demands that we work really closely with, we have to work with the L six. Otherwise, um, there could be lots of work pockets of work going on in a region that's not a line. Potential duplication, not value for money. So it's really important that we, we are working together on, you know, those L tools that have just gone in and the C tech delivery plans that we work through.
So.
So.
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Speaker 6
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Speaker 6
Low carbon design, those kind of things would be number one. Um, the second and this. Is very much a CIC agenda is to promote. alternative routes for. qualification for all. professions and, and examples of that will of course be apprenticeships. But I'd particularly call out the built environment technical.
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Speaker 6
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Speaker 6
My conversion took seven years. It shouldn't take that long. And, and I think. encouraging different routes to enable that to happen. It's really important. And then final one, I think, again, picking up lifelong learning is supporting the development of micro. accreditation again for specialist areas, AI, building safety, BIM, all of those. areas because I think it's those small. additional sort of. Bite sized chunks of.
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Speaker 4
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Speaker 4
I just challenge you on the micro accreditation. Why shouldn't employers pay?I mean, if we look at how much employers have been spending on training, we know it's been on a downward trajectory and the state steps in to fill the gap. Surely the micro. accreditation would be the easiest place and the most agile place.
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Speaker 7
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Speaker 7
Yeah. Well, um, you'll forgive me if I don't. necessarily lobby the government for a, for a, for my recommendations. I'm bursting with them inside. I think the, um, the, some of the things I think I've talked about, um, you know, are things that I think we need to build on and continue. Um, and that's really where, where I see the real focus. So, you know, I really actually agree with lots of what Sam Simon have said here.
Um, there is something about taking a fresh look at the content and. structures of the. available skills, products that, that we look after. Have we really got the right mix of apprenticeships, technical qualifications, apprenticeship units, or, you know, some of the drivers of the apprenticeship levy, you know, sort of driven us to end up with apprenticeship provision in places where perhaps other other.
Um, there is something about taking a fresh look at the content and. structures of the. available skills, products that, that we look after. Have we really got the right mix of apprenticeships, technical qualifications, apprenticeship units, or, you know, some of the drivers of the apprenticeship levy, you know, sort of driven us to end up with apprenticeship provision in places where perhaps other other.
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Speaker 7
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Speaker 7
Um, might, might be optimal. Um and I think um that, that, that is, that is something that I think, you know, need needs to keep on happening. We've got to make sure that those, those products are really fit for the purposes that, that they're aimed at. Um, it will not surprise you to hear me say that, that, that. really the work, the really good work that I think we've done in the last, um, sort of year or so since skills England's formation to really build close collaboration between.
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Speaker 4
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Speaker 4
You know, you, you raise the point about, um, working really closely with employers. And if I understand rightly, you also are part of Irf8 who also wanted to work really closely with employers. So what's the kind of tangible difference that you feel?Now, I'm not saying one's better or worse. I'm just trying to. understand what's the difference in focus.
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Speaker 7
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Speaker 7
Um, some of the spaces that we felt unable to get into with our work very sharply focused on the generation of occupational standards and products of various different kinds was in those areas where we could play a really an active role. convening the right bits of government and the right bits of industry and the right bits of the provider community and so on and so forth to solve problems together. Um, and that, you know, so I'm, I'll be running a meeting jointly with the Construction Leadership Council in a week or two's time about how can we help the construction.
industry coalesce around a vision for how skills passporting might work in construction?It won't be our job to deliver that, that passporting solution. That's that's for industry to, to work through for itself. But I think we can play a really useful convening role. Um, and supporting role in terms of helping to get some of those things to happen. That was less of a feature, I think, of our remit as, as I fade, but at Skills England, I think we're able to make a real impact.
industry coalesce around a vision for how skills passporting might work in construction?It won't be our job to deliver that, that passporting solution. That's that's for industry to, to work through for itself. But I think we can play a really useful convening role. Um, and supporting role in terms of helping to get some of those things to happen. That was less of a feature, I think, of our remit as, as I fade, but at Skills England, I think we're able to make a real impact.
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Speaker 1
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Speaker 1
I think, um, if will will always be responding to the skills agenda in the way that they can as quickly as they can. And I think there's a set of wave two technical excellence colleges that are focusing on green skills that will be picking a lot of a lot of that response, um, up and, and provision. There will be some overlap with some of the construction texts in some of the areas that we're working on, but that, that wave two sort of provision will be.
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Speaker 3
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Speaker 3
Thank you. Fantastic. Thank you very much. Pleased to know that's the end of this session. I'm sure I speak for everyone. All very delighted to have you. Really interesting discussion. Very grateful for you giving up your time power to your elbow as well. And with that, that is the end of the meeting. Good afternoon. Just about it is or maybe morning, whichever it is.
Um, welcome back to the House of Lords Built Environment Committee. This is the second part of our session, which we're going to be looking at the role of. developers in new towns of different, the role of developers of different size and scale in the New Towns.
Um, welcome back to the House of Lords Built Environment Committee. This is the second part of our session, which we're going to be looking at the role of. developers in new towns of different, the role of developers of different size and scale in the New Towns.
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Speaker 3
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Speaker 3
Absolutely delighted to have Alison Crofton, the chief regional delivery officer at Homes England, and Richard Cooke, the chief development officer at Clarion Housing. Thank you so much for joining us today. I think, you know, we've got a series of questions to ask, uh, from around this horseshoe. All I'd ask is of yourself and of my colleagues, just to keep your questions and answers short, if at all possible. Uh, but with that, I'm going to go straight into.
12:08
Speaker 2
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Speaker 2
Baroness Lawrence. Well, thank you and good afternoon. And my question is around, um, around the house building. So I'm going to keep my question really short. So what um what is the most significant. challenges. affecting home built house building sector?And what steps can the government take to address these. challenges in the short term to ensure that.
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Speaker 10
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Speaker 10
Costs over the last 3 to 5 years. I think if you look at some of the statistics, the quarter between 30 to 40% and that's through. hyperinflation from all the challenges that we got through Ukraine and also recently into the Middle East. Um, so that fundamentally means actually the, the base level of. cost has increased dramatically. Yeah. On top of that, we've seen a lot of legislation change. Most of it is actually has been needed, but it comes with a cost again.
And whilst that has happened, we've seen probably the value. Um stay fairly static over the last number of years. So we've got that squeezed. between costs. increasing and value staying the same. Yeah. And then if you actually then look at what does that really mean. It means actually. volumes are actually decreasing rather than increasing. And we've got that level of uncertainty. Yeah. And what that then generally means that where we would take longer term investment.
decisions and development is about long term.
And whilst that has happened, we've seen probably the value. Um stay fairly static over the last number of years. So we've got that squeezed. between costs. increasing and value staying the same. Yeah. And then if you actually then look at what does that really mean. It means actually. volumes are actually decreasing rather than increasing. And we've got that level of uncertainty. Yeah. And what that then generally means that where we would take longer term investment.
decisions and development is about long term.
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Speaker 10
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Speaker 10
Like new towns is a great example. A new town will take 30 to 40 years to come to. fruition and actually develop through in its progress. Yeah. So we'll go on many cycles and everything that comes with it, but to invest in. schools and for the sector, supply chain to invest in schools and also new materials and.
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Speaker 10
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Speaker 10
And lots of. organisations take short term decisions. Yeah, we're quite lucky. We're a affordable housing provider. So we take the long term view. 126 years old. But you've got to remember companies are in PLC. Organisations actually need to report every six months. Yeah. So you've got that. challenge between how do you take a long term view, but also making more, I would say. returns that are required of you.
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Speaker 11
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Speaker 11
Thank you. Yeah. Thank you. Um, I can come in and show you explain how Homes England work on long term delivery in terms of large strategic sites that are complex. Um, in terms of our delivery at live delivery activity. So our homes England tackle it is, is we've actually restructured as of the 1st of April to become a regional place based first model. So we have um, live discussions with the place first to make sure that we deliver what is needed on that site and what is needed for that local area.
We also have, excuse me, we also have set up the National Housing Bank and also the new delivery fund, which allows us to have.
We also have, excuse me, we also have set up the National Housing Bank and also the new delivery fund, which allows us to have.
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Speaker 10
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Speaker 10
1.5 million is, is I think it's aspirational. Okay. Um, I'm supportive of an aspiration to get houses built. We have a housing shortage in the UK. Um, so there's no harm in having an aspirational target. Yeah. Um it's going to be a very difficult to meet the aspirations of 1.5 million. When you look at the statistics and the numbers that have been delivered in the first two years of the parliament. Yeah.
Um, so we've got to be realistic about that, um, to make it work. You need lots of things to come together. Okay. Um, the planning.
Um, so we've got to be realistic about that, um, to make it work. You need lots of things to come together. Okay. Um, the planning.
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Speaker 10
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Speaker 10
Um, we are supportive of, I've got to be honest with you. Um, the planning reforms that have come in will make a difference in terms of delivery. Um, we've seen some very strong actions. We're involved in Colchester Tendring Garden community where the master developer, that's. 7750 homes. Yeah. Um we've seen the intervention there and that's now in planning. Okay. Um the intervention there, we've seen from government, we've had the accelerator team involved in that.
project that has been very. successful at bringing the statutory authorities together and the statutory. consultees who can always be also a challenge. Yeah. So actually they've actually brought people together and shaken a few heads to get to the right outcomes. One of them was we had the statutory water. authority demanding that a new, um, sewage treatment works would be built for that project. Yeah. Ultimately the demand was proved not to be required.
And that actually was by the accelerator team bringing the relevant people together. But that would have been a sticker which would have ground that project to a halt. Yeah. So that side of it is working, but you've got things like the affordable housing programme that we are heavily involved in with Homes England. Yeah, but we need that to come forward and we need it to come forward at pace. Yeah. And at the end of the day, that'll be very much dependent upon how much money is available from Treasury in the early years on how much we can actually deliver in the early years as well.
So there's a lot of things riding on this. And then if I look at our core business, which is affordable housing, we also do market sale and we do shared ownership because we build mixed use communities. The current housing market isn't in a good place. From a sales perspective. So that ultimately means, again, at the demand side. Yeah. Um, from. customers is reduced. So you're not building houses if you haven't got a customer to spend to as well.
So there's lots of.
project that has been very. successful at bringing the statutory authorities together and the statutory. consultees who can always be also a challenge. Yeah. So actually they've actually brought people together and shaken a few heads to get to the right outcomes. One of them was we had the statutory water. authority demanding that a new, um, sewage treatment works would be built for that project. Yeah. Ultimately the demand was proved not to be required.
And that actually was by the accelerator team bringing the relevant people together. But that would have been a sticker which would have ground that project to a halt. Yeah. So that side of it is working, but you've got things like the affordable housing programme that we are heavily involved in with Homes England. Yeah, but we need that to come forward and we need it to come forward at pace. Yeah. And at the end of the day, that'll be very much dependent upon how much money is available from Treasury in the early years on how much we can actually deliver in the early years as well.
So there's a lot of things riding on this. And then if I look at our core business, which is affordable housing, we also do market sale and we do shared ownership because we build mixed use communities. The current housing market isn't in a good place. From a sales perspective. So that ultimately means, again, at the demand side. Yeah. Um, from. customers is reduced. So you're not building houses if you haven't got a customer to spend to as well.
So there's lots of.
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Speaker 11
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Speaker 11
Alison, do you want to add anything else?Yeah, if it helps. So last year Homes England, um, delivered over. 4000 completions and over. 4000 starts. Um which was actually. countercyclical to the market because completions overall were going down. And we've done that by, um, um, like working with our partners at Clarion, um, but also listening and changing and making sure that we've changed our structure to become place first to change our funding so that we're flexible.
Everything that I alluded to in the, in the first response, we've just got to make sure that we really listen to our partners and.
Everything that I alluded to in the, in the first response, we've just got to make sure that we really listen to our partners and.
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Speaker 12
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Speaker 12
Come back and see a hand. Thank you very much indeed. It's very good to see both of you this morning. I have a question about Homes England and the the new and the housing bank in relation to the question about the target for affordable homes. particularly now as we look at the need for long term planning in the new towns, um, when will we be able to see money flowing from the housing bank. into. um you know, that sort of strategic new settlement and what will be the transition.
arrangements from the. present rather complex funding arrangements that Homes England had to this more streamlined situation. Um, I mean, are you working with, for example, the task force or some of the new, um sites on, you know, they've had their CA done, you know, at what point do you join the dialogue about funding from Homes England?
arrangements from the. present rather complex funding arrangements that Homes England had to this more streamlined situation. Um, I mean, are you working with, for example, the task force or some of the new, um sites on, you know, they've had their CA done, you know, at what point do you join the dialogue about funding from Homes England?
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Speaker 11
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Speaker 11
Yeah. Yeah, you're absolutely right. In your observation about the complex funding arrangements and the different criteria that we've had in the past. And that's exactly why from the 1st of April that we did set up the National Housing Bank, but also our new housing delivery fund. Um, that allows us to be flexible. So there's not particularly set criteria or set ring fences within that fund in order to. Place and to what makes the biggest. impact in terms of the social and affordable homes.
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Speaker 11
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Speaker 11
Homes England are responsible for about 70% of that, which is about 27 billion, which is over ten years, which we very much welcomed. And we're just taking us through all the applications as at the moment. Um, and that will be deployed as soon as we have a ministerial steer going forward. But we are working on that. Um, and we, we can say that it's been very popular and oversubscribed, which we did, which we did expect. And there are other aspects of the bank where we have changed our products.
We still do equities, loans, guarantees and debt, but we are kind of working on a better kind of work. Streams, very specific in specifically for small and medium sized enterprises in particular, where we've really kind of expanded our work stream in that. And that's where the bank will be deployed. The bank has already started doing business. So as of the 1st of April, we have done three SM loans.
We still do equities, loans, guarantees and debt, but we are kind of working on a better kind of work. Streams, very specific in specifically for small and medium sized enterprises in particular, where we've really kind of expanded our work stream in that. And that's where the bank will be deployed. The bank has already started doing business. So as of the 1st of April, we have done three SM loans.
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Speaker 11
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Speaker 11
Um and we have already done um a number of deals and equity partnerships going forward. Um, we see it as a real positive. Baroness Andrews that the National Housing Bank under the control framework that Treasury has allowed us to go, go under, allows us to be flexible. It allows us to have very swift.
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Speaker 12
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Speaker 12
Deliver the houses. Of course. One final question. There was a separate stream under the old scheme for remediation. Um, is that going to be because a lot of these sites will probably be quite heavily contaminated. So would that is that still a separate stream or from what you said, it's going to be a lot of the the conditions are going to be removed. It will be seen as a.
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Speaker 11
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Speaker 11
Very high infrastructure assets that the private sector just could not get their business model to work. However, we knew that if we stepped in and provided the the. decontamination provided the rails, roads and bridges and there that the private sector would then be interested and then deliver the homes that were required there. We have spent probably circa um. Probably 50 to £70 million in terms of contamination. But that also includes two new bridges and. 1.3km of roads, a kilometre of cycleways as well.
And I don't have the breakdown in terms of.
And I don't have the breakdown in terms of.
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Speaker 11
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Speaker 11
Ability to build. Absolutely. We make sure that we enable sites that become attractive investment propositions. And nine times out of ten that will involve getting outline planning, putting in infrastructure first. And sometimes that includes schools like at Northstowe in Cambridge and also decontaminating land. So the platform is ready for partners like Clarion and private sector partners to.
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Speaker 10
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Speaker 10
And our ambition on Colchester is probably to get somewhere between 30 to 40%, but that's greenfield. The challenges you've got when you go into somewhere like Leeds. Yeah, where there's a new town identified and we have a big project in Leeds at present. 1800 homes that is delivering not affordable housing under a section. 106 because it's not viable. Okay. We've had to use brownfield housing money. So answering Baroness Andrew's question as well, we work with combined authority to get combined authority money.
They have a slug of capital that they can use to intervene on projects to make them viable. And we're using that on our Leeds project as well. And then we're using our relationship with Homes England to deliver 40% affordable housing. But it's grant funded. Okay. So we need that grant coming from central. government at rates that. work to make. brownfield sites in city centres viable. So it's the difference between building greenfield with infrastructure funded somewhere against actually working on brownfield sites, which are always going to be more costly.
And then you're going to need grant funding. Yeah, the end of the day, it's a simple terminology. There's a bucket of cost. Yeah. And it's normally short of what it needs. So somewhere there needs to be some form of loans or grant goes into that to deliver the aspiration.
They have a slug of capital that they can use to intervene on projects to make them viable. And we're using that on our Leeds project as well. And then we're using our relationship with Homes England to deliver 40% affordable housing. But it's grant funded. Okay. So we need that grant coming from central. government at rates that. work to make. brownfield sites in city centres viable. So it's the difference between building greenfield with infrastructure funded somewhere against actually working on brownfield sites, which are always going to be more costly.
And then you're going to need grant funding. Yeah, the end of the day, it's a simple terminology. There's a bucket of cost. Yeah. And it's normally short of what it needs. So somewhere there needs to be some form of loans or grant goes into that to deliver the aspiration.
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Speaker 11
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Speaker 11
Your reflections. Yeah. So I think um, it's probably. Quite good to point out that the National Planning Policy framework does say anything up to 50%. And that's regardless whether it's a new town or whether it's any planning going forward. So the industry is used to. providing social and affordable housing programs to like a like a high.
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Speaker 11
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Speaker 11
Um, do struggle with having a, they don't have a team to apply for it, they don't know who to contact, etc.. So we've kind of addressed that in a couple of ways. One is going back to the regional model. So we know who the regional players are so that we can actually provide that one single front door to those SME players to make sure that they know and can ask questions straight away, so they don't spend a long time going through the agency, um, trying to find the answer to their question.
We also have in the past provided a council housing support fund, which allows councils. So we've funded £9 million worth of funding to 44 councils to give them the capacity and. capability in order to provide bids for the the fund coming up as well. So we do recognize that, um we do need to make sure that we provide the grant and have the access to that grant available to all the players.
We also have in the past provided a council housing support fund, which allows councils. So we've funded £9 million worth of funding to 44 councils to give them the capacity and. capability in order to provide bids for the the fund coming up as well. So we do recognize that, um we do need to make sure that we provide the grant and have the access to that grant available to all the players.
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Speaker 8
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Speaker 8
I'm intrigued. Um, Richard, by your, your, your mentioning Tendring and Colchester. I grew up in Tendring, so my perception was that during the 60s there was an explosion of home owner building there. And are you experiencing any pushback from the local district councils and the villages there to your your, you know, to that what seen from what you've said, the numbers you gave?Yeah, quite an intense. programme which could lead to quite.
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Speaker 10
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Speaker 10
Yeah. So, so actually, um we've got Colchester, Tendring and Essex County Council involved in this. Um so we, we have three local authorities with a say because we border Colchester and Tendring in the Essex is the county. Um so they have a combined planning team and a whole combined team that we're working with here. Now we shouldn't forget this is 15 years in the making to get us to where we are today. Okay. These these new towns, these these ambitious garden communities don't come quickly.
So when Colchester was first put together with the options, with an SME at the time, actually Mercia Homes, who are our partner there, um Mercia promoted that through the local plan um for around about ten years. Yeah. Once it was.
So when Colchester was first put together with the options, with an SME at the time, actually Mercia Homes, who are our partner there, um Mercia promoted that through the local plan um for around about ten years. Yeah. Once it was.
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Speaker 10
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Speaker 10
Working through getting to planning. Okay, so big costs of money are actually expended on these large scale. projects just to get to a planning permission. Yeah. Um, in terms of the support, we've really engaged Mercia, have engaged the local authorities, have engaged. So we've taken the community with us here. Yeah. And we've been very, very lucky. So we're actually in consultation at present. It's probably the lowest.
number of negative reviews I've ever had in the planning permission is on Colchester, Tendring and the scale and size of it. You would be bewildered by. 7500 homes. Yeah, that's a big number. But but I think there's a reality of. sensibility the way it's been done, the way it's been promoted, the way the local authorities have come together somewhere. Housing does need to be built. And actually this is something that's going to bring something for the wider.
community because it's infrastructure first. Yeah. So we're not building. 150 homes with no infrastructure. We're building. 7500 homes here with half £1 billion worth of infrastructure. Yeah, with new schools and everything else that get delivered as the homes are built. Yeah. And I think that is that will be the. success of any large scale community. extension or new town. You've got to have the infrastructure.
And back to how does the affordable housing come?You need not just affordable housing, but you need all the other infrastructure that comes that comes with a cost. The private. sector will struggle always to do that. Yeah. Um, because of the initial outlay. Now Homes England have lots of tools that actually they can assist with that and we're leaning on some of them as well. But somewhere in Colchester is a great example. We have needed government money.
If funding of a significant. amount to make that scheme come forward and be viable.
number of negative reviews I've ever had in the planning permission is on Colchester, Tendring and the scale and size of it. You would be bewildered by. 7500 homes. Yeah, that's a big number. But but I think there's a reality of. sensibility the way it's been done, the way it's been promoted, the way the local authorities have come together somewhere. Housing does need to be built. And actually this is something that's going to bring something for the wider.
community because it's infrastructure first. Yeah. So we're not building. 150 homes with no infrastructure. We're building. 7500 homes here with half £1 billion worth of infrastructure. Yeah, with new schools and everything else that get delivered as the homes are built. Yeah. And I think that is that will be the. success of any large scale community. extension or new town. You've got to have the infrastructure.
And back to how does the affordable housing come?You need not just affordable housing, but you need all the other infrastructure that comes that comes with a cost. The private. sector will struggle always to do that. Yeah. Um, because of the initial outlay. Now Homes England have lots of tools that actually they can assist with that and we're leaning on some of them as well. But somewhere in Colchester is a great example. We have needed government money.
If funding of a significant. amount to make that scheme come forward and be viable.
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Speaker 14
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Speaker 14
Thank you. And thank you both for being here. And I think you've actually answered a lot of this, but maybe we could elaborate. And apparently I have to declare an interest that I don't have an interest in this module. So it's now on record. Um, I haven't heard section 106 mentioned so often since I was a councillor, and that was a while ago. Um, I'm really interested in what you're saying about new infrastructure and presumably the infrastructure.
includes clean and green, because I get so upset about seeing housing developments that don't have infrastructure. Um, and I was really delighted with what you were saying about taking communities with you because if you don't, we will have failed in all of this. So one of the conclusions from new towns and the foundations argue that the inclusion of plots of different sizes and. masterplans offers opportunities for. developers to participate. effectively in the delivery of new towns. And I expect that you'll go broader.
The new towns. Um, but. Stepping outside London for a bit, if I may, um, the next generation of new towns and expanded settlements will be, we hope, delivered across all of the country. How should smaller regional housebuilders be involved in their development and enable to be involved, which is what you were touching on, in what. capacity and how can the government or should the government support their involvement?
includes clean and green, because I get so upset about seeing housing developments that don't have infrastructure. Um, and I was really delighted with what you were saying about taking communities with you because if you don't, we will have failed in all of this. So one of the conclusions from new towns and the foundations argue that the inclusion of plots of different sizes and. masterplans offers opportunities for. developers to participate. effectively in the delivery of new towns. And I expect that you'll go broader.
The new towns. Um, but. Stepping outside London for a bit, if I may, um, the next generation of new towns and expanded settlements will be, we hope, delivered across all of the country. How should smaller regional housebuilders be involved in their development and enable to be involved, which is what you were touching on, in what. capacity and how can the government or should the government support their involvement?
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Speaker 10
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Speaker 10
Thank you. So I again, I'll talk from a clarion perspective here and then look at the wider industry perspective. Um, I think the delivery new towns who delivers them is going to be absolutely critical. Okay. Absolutely critical. And what I mean by that is one is development corporations or however politically it will be developed. Yeah. And we've got three local authorities, as I mentioned earlier, I think everybody said you're working with three local authorities and one project.
You must be mad. Yeah. Actually they have all come together.
You must be mad. Yeah. Actually they have all come together.
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Speaker 10
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Speaker 10
And officer to drive this project forward. Okay. So there's a general. consensus that is key. And we've turned the community on that journey as well. From our point of view, we're a master developer. Okay. So we're not a housebuilder. We are approaching Colchester as a master developer. What that means is we control the land. We are doing the design, and we are going to look after the stewardship in perpetuity.
And we can do that because we're housing association and we think very, very long term. Yeah. So that sets the tone. We will then bring in partners to deliver that project at pace. And different forms of tenure as well is really important to us. Okay. And our answer to that is we expect on.
And we can do that because we're housing association and we think very, very long term. Yeah. So that sets the tone. We will then bring in partners to deliver that project at pace. And different forms of tenure as well is really important to us. Okay. And our answer to that is we expect on.
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Speaker 10
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Speaker 10
Um our ambition is to be delivering over 500 homes a year at one project. Yeah. That will be a third of it will be affordable. Okay. Um which we will deliver with partners, um, and on in perpetuity. We're then looking to bring in single family homes. Yeah. So that's a single family rental model. We'll have private house builders in partnership with us. We'll also be delivering things like um, over retirement living, um, mixed.
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Speaker 10
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Speaker 10
Um, we'll also be doing. self-build and then we'll also be bringing plots forward service plots for SMEs, because that's really important to us because we want. diversity of tenure. diversity of well, we want high quality, but diversity of design. Yeah. And actually we also once I'm going to call it more flags, more outlets and openings. So actually we accelerate the pace of the project because to underpin the infrastructure we want to put in, we want a pace of delivery.
Yeah. And that is going to be really, really important to us. So we will. facilitate um opportunities for SMEs in our projects. And self-build as I said earlier. Yeah. And community funding as well if that's required. Yeah. That's a master developer role. I think that's, that's the important bit is. differentiation between a housebuilder who maybe buys a site of a thousand homes, builds the affordable housing through 1 or 6, and then sells housing.
Yeah. Is a different route to where a master developer will bring other people. We're also going to be creating 6000 jobs at Colchester, so we shouldn't forget. New communities is not just about homes, it's about sustainable communities. It's about jobs and opportunities for people. Yeah, we don't build offices. Um, and we, we, we, we don't build industrial. Okay. But we will bring partners in who specialise at that again, because actually getting jobs created on our project.
early will actually drive demand. Yeah. And make it attractive for people to want to live there. Yeah. And that's the success of Colchester. Yeah. And if we deliver it at pace, instead of being a 40 year.
Yeah. And that is going to be really, really important to us. So we will. facilitate um opportunities for SMEs in our projects. And self-build as I said earlier. Yeah. And community funding as well if that's required. Yeah. That's a master developer role. I think that's, that's the important bit is. differentiation between a housebuilder who maybe buys a site of a thousand homes, builds the affordable housing through 1 or 6, and then sells housing.
Yeah. Is a different route to where a master developer will bring other people. We're also going to be creating 6000 jobs at Colchester, so we shouldn't forget. New communities is not just about homes, it's about sustainable communities. It's about jobs and opportunities for people. Yeah, we don't build offices. Um, and we, we, we, we don't build industrial. Okay. But we will bring partners in who specialise at that again, because actually getting jobs created on our project.
early will actually drive demand. Yeah. And make it attractive for people to want to live there. Yeah. And that's the success of Colchester. Yeah. And if we deliver it at pace, instead of being a 40 year.
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Speaker 10
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Speaker 10
Everything's future home. Um, so everything will be built to future homes and new legislation that's coming. Yeah. It's going to be a. decarbonised project. Yeah. And we're also looking at what our, our embodied carbon is as we work through that project as well. So we're looking at all that whole. sustainability wrap around just delivering.
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Speaker 11
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Speaker 11
Thank you Alison. Yeah. We strongly agree that, um, allowing multiple players like SMEs to develop our sites and creates a resilient market, creates a sustainable market. It's what local places want and need. And also it delivers the right product and we do it via a various number of means. Not only we also play a master developer role. So for example, on Northstowe in Cambridge, we have a parcel of land where um, we have made kind of development ready and we have town who is a co-housing co community designed, um phase on there where the locals, um, the local residents then design their own homes.
It's sort of like a self-build um design and they are going to be on our master developer site right next door to a keepmoat who are a large developer, um, a cross England as well. So we also do the master developer role, however, where we also play to make sure that we get a SME angle. Is that in our bank we have a. particular SME funding, uh, work streams. So for example, we have an SME lending alliance which allows the. micro SMEs to be able to access funding where they can't normally access mainstream funding.
And when I say micro, it's anything from two homes and above. Um, and we have actually invested and have a approval to invest between 2020 and 20, 30, over £47 million worth into that SME, uh, um, lending. Alliance. And we've had real good success rates on that. And they can then use that to then purchase land or to develop alongside Clarion. We also have something called the SME accelerator loan, uh, which allows um, SMEs to, um, uh, again.
Funding from Homes England, but it's so at the moment the SME model, they have to develop a site, get the funding from that, from the completions, and then they can start the next site. The whole idea of the SME accelerator loan is, is that we can fund them to build out their existing site, but then also. purchase the next site. So instead of being very sequential in the SME market, it allows them to accelerate and do, um, multiple sites in tandem, allowing their business to grow.
And we have really good examples of that where we've given Yorkshire homes a 3.38 million to, to build 21 homes, but it's also allowed them to then purchase the next site. And we believe that it's accelerated their business model by about 12 months. So we're trying to make sure that we do not only the funding packages for the SMEs, but also the master developer model and our disposals process. We have worked very hard over the last 12 months to make sure that is faster for our SME partners to make sure that we do lease freehold instead of.
leasehold to make sure that we are there to to work with them and understand their model. And I will admit, there is definitely more that we could do in that space. Um, but it being one of our strategic objectives and also one of our investment themes, we.
It's sort of like a self-build um design and they are going to be on our master developer site right next door to a keepmoat who are a large developer, um, a cross England as well. So we also do the master developer role, however, where we also play to make sure that we get a SME angle. Is that in our bank we have a. particular SME funding, uh, work streams. So for example, we have an SME lending alliance which allows the. micro SMEs to be able to access funding where they can't normally access mainstream funding.
And when I say micro, it's anything from two homes and above. Um, and we have actually invested and have a approval to invest between 2020 and 20, 30, over £47 million worth into that SME, uh, um, lending. Alliance. And we've had real good success rates on that. And they can then use that to then purchase land or to develop alongside Clarion. We also have something called the SME accelerator loan, uh, which allows um, SMEs to, um, uh, again.
Funding from Homes England, but it's so at the moment the SME model, they have to develop a site, get the funding from that, from the completions, and then they can start the next site. The whole idea of the SME accelerator loan is, is that we can fund them to build out their existing site, but then also. purchase the next site. So instead of being very sequential in the SME market, it allows them to accelerate and do, um, multiple sites in tandem, allowing their business to grow.
And we have really good examples of that where we've given Yorkshire homes a 3.38 million to, to build 21 homes, but it's also allowed them to then purchase the next site. And we believe that it's accelerated their business model by about 12 months. So we're trying to make sure that we do not only the funding packages for the SMEs, but also the master developer model and our disposals process. We have worked very hard over the last 12 months to make sure that is faster for our SME partners to make sure that we do lease freehold instead of.
leasehold to make sure that we are there to to work with them and understand their model. And I will admit, there is definitely more that we could do in that space. Um, but it being one of our strategic objectives and also one of our investment themes, we.
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Speaker 15
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Speaker 15
Lord Bailey. Thank you. Um, how the next generation of new towns and expanded settlements and opportunity to engage with new and emerging. And in your view, have the most would that have the most potential to support delivery?What steps are the government taking to ensure that the risks are balanced against potential opportunities?Because you made a comment earlier on that Homes England provides infrastructure and obviously that is, I think is a Kickstarter to getting things done because nobody wants to put in the sewers.
Somebody has to pay for that. But we are bad in this country. Infrastructure on, on, on most levels is new.
Somebody has to pay for that. But we are bad in this country. Infrastructure on, on, on most levels is new.
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Speaker 10
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Speaker 10
Yeah, I think we can look at innovation and technology across, I think everything that we do, I think, um, I'll probably look at the innovation side about actually how we build our homes, if that's all right. Is that is that hopefully answer the question. I think that's really important because we've been through, again, ups and downs, many conversations around modern methods of construction and everything else. And that that sector has really struggled. Yeah. Um, I look at Colchester gives us a real.
opportunity to um. refine what we do, learn what we do and make it more efficient about building because we're building. 7500 homes in one place. So for us, it's about how do we build those homes and build them efficiently. Yeah. Um, and that is actually about job skills and training at the beginning and making sure we create a long term. platform to grow our, to grow our workforce on that project. And then it's also to work with people who actually can.
opportunity to um. refine what we do, learn what we do and make it more efficient about building because we're building. 7500 homes in one place. So for us, it's about how do we build those homes and build them efficiently. Yeah. Um, and that is actually about job skills and training at the beginning and making sure we create a long term. platform to grow our, to grow our workforce on that project. And then it's also to work with people who actually can.
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Speaker 10
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Speaker 10
New ways of building houses. Yeah. Um, and that is actually, um, I'm going to call it the flat pack type systems. Or we build a factory close to our site or on our site where we manufacture housing. Yeah. And that would. probably be our most efficient way of using technology and innovation on Colchester. Yeah. That comes with risks because we still need warranties. Yeah. And the warranty market is still pretty fragment.
fragmented around modern methods of construction. And ultimately if we're going to actually. invest in that. technology and invest in manufacturing in a project like that, we're probably going to need more than just Colchester to make it efficient. Yeah. Because actually you need that. longevity and you need that supply. And you can probably see that whole modern methods, construction. manufacturing break down over the last few years where many companies have gone into.
fragmented around modern methods of construction. And ultimately if we're going to actually. invest in that. technology and invest in manufacturing in a project like that, we're probably going to need more than just Colchester to make it efficient. Yeah. Because actually you need that. longevity and you need that supply. And you can probably see that whole modern methods, construction. manufacturing break down over the last few years where many companies have gone into.
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Speaker 10
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Speaker 10
They didn't have the. demand and the output that kept them. Like any factory needs to be consistently efficient. Yeah. But that's how I would look at the innovation side of it. Um, what we would want to do on our large scale project, I think the garden communities, a new towns because they are at scale, gives them that. opportunity. And quite possibly, maybe when the next seven come.
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Speaker 10
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Speaker 10
That should be one of the exam questions for whoever actually is running the. project around. What are you going to do around actually driving efficiency through delivery and production?Yeah, because actually that's probably one of the parts that actually is going to be really, really important. Yeah. I said very at the beginning, costs in our. industry have gone astronomical over the last 4 to 5 years. Yeah. The only way we're going to stop them, they're always going to keep rising and inflate.
We've got to find efficiency in what we do now to try and stop that.
We've got to find efficiency in what we do now to try and stop that.
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Speaker 15
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Speaker 15
You know, and and. Do I and forgive me if I'm wrong. I don't sense a willingness to adopt new. technology and even new towns like you say you'd need, you'd need quite a pipeline to get it off the ground. But how are you going to overcome the disaster of last time?Because if I if I had a modular factory.
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Speaker 10
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Speaker 10
Past those cultural pieces?I think the leap to modular, this is just my view. Okay. Um, I've been in the industry for a long time. Um, the leap to modular came without the thought of actually what the modular going to supply. Yeah. Okay. And. We didn't venture into modular, I'll be honest with you because, um, Clarion and I'll use this as a real life example. The worst performing stock we have in our.
portfolio was the modern methods of construction in the. 1960s and 70s. Yeah. Where it wasn't thought through. Things were built very, very quickly. And we now are living with the after effects of that. Yeah. So we all step in as asset owners into making sure we have longevity. And when you're getting modular product, coming out the factory with a piece of cladding on it, that really has a lifespan of 10 to 15 years, that's not what we're really looking for.
Yeah. The other bit is it's.
portfolio was the modern methods of construction in the. 1960s and 70s. Yeah. Where it wasn't thought through. Things were built very, very quickly. And we now are living with the after effects of that. Yeah. So we all step in as asset owners into making sure we have longevity. And when you're getting modular product, coming out the factory with a piece of cladding on it, that really has a lifespan of 10 to 15 years, that's not what we're really looking for.
Yeah. The other bit is it's.
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Speaker 10
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Speaker 10
Bizarrely, is constrained by the size of the lorry that you can put it on. Okay. Housing and homes. Yeah. Isn't designed by lot, isn't designed around lorry sizes. It could be. But that would actually need to go down a certain route. Yeah. Of design and space standards and everything else that we've already got embedded. Yeah. Would need changing. Yeah. Because to make it.
efficient you've got to design it efficient for the. factory and the module. What we've been trying to do is back engineer the factory and the module into the.
efficient you've got to design it efficient for the. factory and the module. What we've been trying to do is back engineer the factory and the module into the.
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Speaker 15
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Speaker 15
You know, because I come from an engineering background, I did I would build something without my partners being able to look at exactly the same object that I'm looking at. It seems ridiculous to me. Why doesn't that happen in construction?Is there anything that you can do with your scale?Because you'll be around forever. The homes, England. You might get a new name, but you're going to be around forever. Is there something that you could do to.
encourage these modern.
encourage these modern.
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Speaker 11
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Speaker 11
Um, which is well publicised, which um, uh, you know, has been very high risk and companies have gone into. administration and we've taken that risk in terms of funding them. But it was essential in order to kind of, um, show what is required to make those businesses work in terms of the way of thinking in terms of like a car manufacturer type of thinking, um, instead of.
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Speaker 11
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Speaker 11
Sort of house building thinking, but so we have funded, and I'd say mainly our role has been through funding. What we have done though, as part of an innovation that's different to funding is, is we have had what we've done called demonstrator sites, where we've used our land to provide either research. valuation or help suppliers learn about products, for example, for different methods of modern methods of.
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Speaker 11
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Speaker 11
Um or. compartmentalised or type two and type of MMC, and we've learned that and shared that evaluation and research across the industry. And we see that as part of our remit and role to do as well. In addition to that, we've also had demonstrator sites on future home. standards where we've, um, pulled forward the future home standards to kind of show in the supply chain what is required and also what works from a customer point of view and an end user point of view.
And again, we've shared that with the industry as well. So I would say our area of focus has been on funding. Um, in terms of companies for modern methods of construction, and then also.
And again, we've shared that with the industry as well. So I would say our area of focus has been on funding. Um, in terms of companies for modern methods of construction, and then also.
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Speaker 15
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Speaker 15
Demonstrator sites, the funding will always remain the most important part listening. To Richard's answer, I cannot tell you, Richard, how you've cleared that up for us, at least for me. I've had lots of fluff up until this point, but it then it then suggests there is parts of of construction that that, that are. homogenized, that are, that have high standards.
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Speaker 10
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Speaker 10
I so you mentioned something earlier and I think I think it's got a little bit lost. I remember if you go back about ten years, we had a BIM Academy, which was set up by the government, which was building information modelling, which was digital design. Yeah. And anybody who wanted to work in government project required to use BIM. Yeah. So again, you look at, I'd say large scale infrastructure projects are very good. Using technology to do design.
Yeah. You then come down to the level of house building and actually it's not done. Okay. Yeah, it's still done traditional ways and things like that. And the industry can definitely get better. We, we need the golden thread. So we design everything digitally in our business. Because we want the golden thread for safety because ultimately we own the assets. Yeah. The bit you talked about is where, where does the.
acceleration come?
Yeah. You then come down to the level of house building and actually it's not done. Okay. Yeah, it's still done traditional ways and things like that. And the industry can definitely get better. We, we need the golden thread. So we design everything digitally in our business. Because we want the golden thread for safety because ultimately we own the assets. Yeah. The bit you talked about is where, where does the.
acceleration come?
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Speaker 2
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Speaker 2
Earnings come out at two. How it could have been done better. But there's some amazing innovation going on there as well. Yeah, I think procurement is where innovation can come. Yeah. About how do we procure to get schemes going quicker?Yeah. In the public sector and more efficient and more standardised. I think that would be. And then if I come back to projects like we're doing, we are using a lot of MMC, but we're using, as Alison said, we're thinking about it a bit like a car is manufactured.
Yeah. So a large scale project which is relevant to the new towns in like Leeds and the urban extensions in the major city centres. We're using prefabricated concrete, prefab, precast concrete. We're using precast cladding systems. We're using modular bathrooms, modular kitchens, modular service risers. Yeah. So we're using that in all our high rise projects. Yeah. The smaller houses we're using flat panel timber frame systems now. Yeah.
And then we're using modular roof systems. So we it's definitely moving on. Yeah. The challenge comes at present is the, the efficiency that it brings doesn't get recognised in the cost base. Yeah. And until you start doing it in a mass real mass market basis, yeah. You don't get the efficiency because everybody counts what the bottom line number is. Rather than thinking, do I save three weeks in the programme and everything else?And I think that is the challenge for our industry.
Always has been. I'm over 35 years in the industry and it's everybody always looks at the bottom line first rather than actually, you know, what, if we do this investment, that bottom line will go down in five years time. We're all really worried about what the bottom line looks like today. Yeah. And the environment we're in at present makes that even more challenging. Yeah.
Yeah. So a large scale project which is relevant to the new towns in like Leeds and the urban extensions in the major city centres. We're using prefabricated concrete, prefab, precast concrete. We're using precast cladding systems. We're using modular bathrooms, modular kitchens, modular service risers. Yeah. So we're using that in all our high rise projects. Yeah. The smaller houses we're using flat panel timber frame systems now. Yeah.
And then we're using modular roof systems. So we it's definitely moving on. Yeah. The challenge comes at present is the, the efficiency that it brings doesn't get recognised in the cost base. Yeah. And until you start doing it in a mass real mass market basis, yeah. You don't get the efficiency because everybody counts what the bottom line number is. Rather than thinking, do I save three weeks in the programme and everything else?And I think that is the challenge for our industry.
Always has been. I'm over 35 years in the industry and it's everybody always looks at the bottom line first rather than actually, you know, what, if we do this investment, that bottom line will go down in five years time. We're all really worried about what the bottom line looks like today. Yeah. And the environment we're in at present makes that even more challenging. Yeah.
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Speaker 4
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Speaker 4
Very specific question, actually. Do you see the new towns as an opportunity to develop, innovate, test out some really innovative building materials and products which we've heard about. And is that compatible with the sort of standardisation that you've been talking about?Um, Mr. Cook, in relation to modular constructions, can we have both can we have beauty innovation, brilliant new materials innovation in that sense and good design as well as mass development.
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Speaker 2
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Speaker 2
Yeah. Okay. So so the first can I pick the first one because I think that's relevant is about customers and design and innovation. Okay. Customers ultimately always want always come back is location, location, location, affordability. Okay. Um, is key to people. Absolute key is affordability. Okay. And actually affordability probably comes above location now. Can I afford it?Can I live where I want to?Yeah.
Then the bits they look for is quality. Yeah. Functionality in a home. Yeah. Does it work for me?Yeah. And actually, it is definitely becoming more important as future proofing, especially around energy. Okay. Um, and we've seen that and people are interested. Is there a premium for innovation and is there a premium for, I would say, investing in energy efficiency at present. Um, at the top end of the market, probably because people can afford it, but in the mid-market.
Not really. Yeah. Because actually it comes back to that bit I said, it's about what is affordable type thing. But people ask, have we all have aspirations about what we want?Yeah. And if we look at somewhere like in Newtown, we should be able to meet parts of that through the Newtown, because we have a real diversity of product for every marketplace there. Yeah. So that hopefully tries to answer the question around what customers are after, then coming back to innovation and everything else.
Um, there is a whole opportunity for innovation. Um, the thing that will probably hold us back is legislation. Okay. Um, uh, because we, we legislate, I'll use an example of that is timber. Yeah. Um, is we can't use timber on external buildings now above 18m for all the reasons that we all know. But timber is an unbelievable sustainable material and an innovative material. But we look at other legislation that restricts things. Yeah.
Then the other bit that sits behind it will always be that ultimately, we need warranties. Yeah. And warranties are provided by insurance companies who do want to know that material, which is innovative is going to last and rightly so. And we would look at that as an end user, as clarion, as my customer, who's going to buy my market sale home as well, does want to know that innovative material is still going to be on their house and not not deteriorated in five, ten, 15, 20 years.
Yeah. Because homes are, let's be honest, the homes that we're building in these new towns are going to need to last 60 to 100 years. Yeah. Because that's how long our housing stock, if not longer takes to, to regenerate and renew and everything else. So we've got to think long term. So innovative. Yes. And we're definitely interested as an organisation, but we've got to look at what the risk looks like. And then we've got to look at what the legislation looks like as well.
But we should always, always be actually trying to, um, get people. To innovate and come forward with great ideas. Okay. Yeah. And I guess, I guess we've got to look at places like government can actually facilitate that. Yeah. And the industry does. But ultimately we're going to need government to facilitate that through legislation.
Then the bits they look for is quality. Yeah. Functionality in a home. Yeah. Does it work for me?Yeah. And actually, it is definitely becoming more important as future proofing, especially around energy. Okay. Um, and we've seen that and people are interested. Is there a premium for innovation and is there a premium for, I would say, investing in energy efficiency at present. Um, at the top end of the market, probably because people can afford it, but in the mid-market.
Not really. Yeah. Because actually it comes back to that bit I said, it's about what is affordable type thing. But people ask, have we all have aspirations about what we want?Yeah. And if we look at somewhere like in Newtown, we should be able to meet parts of that through the Newtown, because we have a real diversity of product for every marketplace there. Yeah. So that hopefully tries to answer the question around what customers are after, then coming back to innovation and everything else.
Um, there is a whole opportunity for innovation. Um, the thing that will probably hold us back is legislation. Okay. Um, uh, because we, we legislate, I'll use an example of that is timber. Yeah. Um, is we can't use timber on external buildings now above 18m for all the reasons that we all know. But timber is an unbelievable sustainable material and an innovative material. But we look at other legislation that restricts things. Yeah.
Then the other bit that sits behind it will always be that ultimately, we need warranties. Yeah. And warranties are provided by insurance companies who do want to know that material, which is innovative is going to last and rightly so. And we would look at that as an end user, as clarion, as my customer, who's going to buy my market sale home as well, does want to know that innovative material is still going to be on their house and not not deteriorated in five, ten, 15, 20 years.
Yeah. Because homes are, let's be honest, the homes that we're building in these new towns are going to need to last 60 to 100 years. Yeah. Because that's how long our housing stock, if not longer takes to, to regenerate and renew and everything else. So we've got to think long term. So innovative. Yes. And we're definitely interested as an organisation, but we've got to look at what the risk looks like. And then we've got to look at what the legislation looks like as well.
But we should always, always be actually trying to, um, get people. To innovate and come forward with great ideas. Okay. Yeah. And I guess, I guess we've got to look at places like government can actually facilitate that. Yeah. And the industry does. But ultimately we're going to need government to facilitate that through legislation.
10:55
10:55
10:55
10:56
Speaker 9
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Speaker 9
Thank you. This is just a chance to hear your ideas and creativity. So if you could, uh, persuade the government to prioritise three things. And that could be do more of something they're already doing. Do something brand new or stop doing something they're doing, uh, to encourage home builders to be new town builders, specifically, what would you recommend?Richard?
10:56
10:56
10:56
10:56
10:57
Speaker 2
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Speaker 2
Um, I think the first thing I would ask is I think we feel I think the industry probably feels we've been legislated to death over the last 5 to 7 years. And some of it, as I said right at the beginning is for good reason. Yeah. But we need to absorb what we've got. Okay. Yeah. It is very difficult out there in the environment that we're in for whoever you are, we know everything. Industry and everything else.
It is challenging out there. Yeah. And we need to embed legislative change. Yeah. And actually learn from it. And actually as an industry improve from it as well. Yeah. So that probably would be my first ask. And if we are looking at legislative change with the industry as we bring it in. I think that would be the starting point. Yeah. Because we still do have challenges around things like, and if we are going to do it, be ready for it.
The building safety regulator is a good example of where something was implemented without the systems and the processes and the people in place. And that has cost us as a business millions of pounds. Yeah. And two to at least 12 to 18 months on a project in terms of delivery. Yeah. So if we're going to do something, we've got to think it through. Okay. Because that is really important for us. And then then we can plan for it.
And that's what we need to do. Because if we're going to develop and make big investments, we're investing over 600 million a year in new homes. 50 of them are affordable housing. Yeah. We need to be able to see that visibility, and we need to be able to plan for it. So that would be my first one. The other one where I think government can play significantly because I've been able to I've worked across the world is actually focus on infrastructure and be the enabler of infrastructure.
Yeah. Um, because new communities will thrive and people accept them. If there is a plan around infrastructure and not for my private sector colleagues probably wanting to tell me off on it, because I've spent most of my life in the private sector, the private sector isn't best facilitated to do that. Okay. Yeah. You've got development corporations, the successful schemes. I look at regeneration schemes. I'll use Newcastle because it's near where I live.
Yeah. Is the quayside in Newcastle the success of Newcastle Quayside was down to the Tyne and Wear Development Corporation, because they put that infrastructure in first. Then the developers were able to come and do that. Now Homes England are the type. People can do that. Yeah. And you look at dev codes and things like that, but there's definitely a place and I'd always say I use Vienna as the best example of it. Vienna has the model.
Where it is the state it plays in the land market. Yeah. It gets zoning planning for the land. Yeah. And it puts the infrastructure in. Yeah. Works with affordable housing providers to deliver the affordable housing. And then it lets the public sector, the private sector, deliver private sector housing and placemaking. Yeah. As master developers. But that and that structure will deliver. I have no doubt it will deliver success.
Yeah. And why are we being we think Colchester has been so successful to date is because we have worked very closely with the public sector and Essex County Council and Homes England Mhclg. Everybody's had to come together there to make that successful to where we are now. We haven't actually started digging on that site yet other than the roads, but actually in 20 years time, I hope and know that it will be a successful project. But that is collaboration and partnership.
But I think I think it needs if for these new towns are going to be successful, infrastructure is absolutely key to it.
It is challenging out there. Yeah. And we need to embed legislative change. Yeah. And actually learn from it. And actually as an industry improve from it as well. Yeah. So that probably would be my first ask. And if we are looking at legislative change with the industry as we bring it in. I think that would be the starting point. Yeah. Because we still do have challenges around things like, and if we are going to do it, be ready for it.
The building safety regulator is a good example of where something was implemented without the systems and the processes and the people in place. And that has cost us as a business millions of pounds. Yeah. And two to at least 12 to 18 months on a project in terms of delivery. Yeah. So if we're going to do something, we've got to think it through. Okay. Because that is really important for us. And then then we can plan for it.
And that's what we need to do. Because if we're going to develop and make big investments, we're investing over 600 million a year in new homes. 50 of them are affordable housing. Yeah. We need to be able to see that visibility, and we need to be able to plan for it. So that would be my first one. The other one where I think government can play significantly because I've been able to I've worked across the world is actually focus on infrastructure and be the enabler of infrastructure.
Yeah. Um, because new communities will thrive and people accept them. If there is a plan around infrastructure and not for my private sector colleagues probably wanting to tell me off on it, because I've spent most of my life in the private sector, the private sector isn't best facilitated to do that. Okay. Yeah. You've got development corporations, the successful schemes. I look at regeneration schemes. I'll use Newcastle because it's near where I live.
Yeah. Is the quayside in Newcastle the success of Newcastle Quayside was down to the Tyne and Wear Development Corporation, because they put that infrastructure in first. Then the developers were able to come and do that. Now Homes England are the type. People can do that. Yeah. And you look at dev codes and things like that, but there's definitely a place and I'd always say I use Vienna as the best example of it. Vienna has the model.
Where it is the state it plays in the land market. Yeah. It gets zoning planning for the land. Yeah. And it puts the infrastructure in. Yeah. Works with affordable housing providers to deliver the affordable housing. And then it lets the public sector, the private sector, deliver private sector housing and placemaking. Yeah. As master developers. But that and that structure will deliver. I have no doubt it will deliver success.
Yeah. And why are we being we think Colchester has been so successful to date is because we have worked very closely with the public sector and Essex County Council and Homes England Mhclg. Everybody's had to come together there to make that successful to where we are now. We haven't actually started digging on that site yet other than the roads, but actually in 20 years time, I hope and know that it will be a successful project. But that is collaboration and partnership.
But I think I think it needs if for these new towns are going to be successful, infrastructure is absolutely key to it.
11:03
11:04
11:04
11:04
Speaker 3
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Speaker 3
I can answer from a singular perspective, because this is exactly what the agency role is, is to enable housing and enable it to happen quicker and in the right place with the right design. I think, um, things I've already referred to in terms of our structure, doing a place first is exactly why we've put that in, um, into our structure since the 1st of April. Our flexible funding and allowing access to that funding with less criteria to a myriad of market players as well, has been absolutely fundamental to it.
And I think the idea is, is that we de-risk, we make the investment attractive, we make it attractive so that partners like Clarion and other housebuilders will, um, take the risk and also invest in that proposition as well. So we all do that with various examples in terms of funding the contamination like we have done as a landowner in York, Central Northstowe in Cambridge, Burgess Hill and in Mid Sussex. And we have multiple examples of that, but also the funding of partners, um, in terms of providing them cash flow.
So the return on capital employed is very important to our house building partners. And we allow that to either profile payments or to help the funding of that infrastructure first, to make sure that that is delivered without the private sector kind of having to not start that site. So we look at infrastructure funding, and also just like the pipeline, that's really important to our partners. And I think, um, we, we try to ebb and flow in terms of flex, what we do for our private sector partners.
So that's why we have to constantly have the flexible funding, which we now have in place, the long term funding of the social and affordable housing programme, which we now have in place, and our new structure within homes England allows us to be more fleet of foot, and it's really important that we are we are flexible, that we get approvals quickly, so partners like Clarion can just get on and do what they do best.
And I think the idea is, is that we de-risk, we make the investment attractive, we make it attractive so that partners like Clarion and other housebuilders will, um, take the risk and also invest in that proposition as well. So we all do that with various examples in terms of funding the contamination like we have done as a landowner in York, Central Northstowe in Cambridge, Burgess Hill and in Mid Sussex. And we have multiple examples of that, but also the funding of partners, um, in terms of providing them cash flow.
So the return on capital employed is very important to our house building partners. And we allow that to either profile payments or to help the funding of that infrastructure first, to make sure that that is delivered without the private sector kind of having to not start that site. So we look at infrastructure funding, and also just like the pipeline, that's really important to our partners. And I think, um, we, we try to ebb and flow in terms of flex, what we do for our private sector partners.
So that's why we have to constantly have the flexible funding, which we now have in place, the long term funding of the social and affordable housing programme, which we now have in place, and our new structure within homes England allows us to be more fleet of foot, and it's really important that we are we are flexible, that we get approvals quickly, so partners like Clarion can just get on and do what they do best.
11:05
11:05
11:06
11:06
Speaker 2
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Speaker 2
I may, very briefly. Okay. Accelerate the cash flow of the affordable housing programme. The sector is ready to deliver on it. Okay. Yeah. Um, and, um, we we are working really well with Homes England, but we are constrained by the Treasury cash flows. We could do more now. So you talked about the 1.5 million ambition. Our sector is primed to do it. Yeah. Yeah.
I'm just putting that in there because I think. it's why wouldn't I, why wouldn't I. Because I'm in the sector. Yeah.
I'm just putting that in there because I think. it's why wouldn't I, why wouldn't I. Because I'm in the sector. Yeah.
11:07
Speaker 8
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Speaker 8
Yeah. Great. Thank you very much. That's been a fantastic discussion over the last hour or so. Massively appreciate your time. Sure. We all we all value everything that you've had to say. And with that that's the end of the meeting. House of Lords built Environment Committee. We have just started a new inquiry as part of our broader inquiry into the government's plans on on new towns and expanded settlements.
And last week we started a session which we're calling bricks and mortar. It's about some of the physical and logistical issues around building these new towns and what stops them, and how do we get them going. And today we are focused. We've got two sessions. The first one is going to be on construction skills, and we've got three witnesses before us. First is is Sam Egan, who is the group director of construction at Bedford Colleges Group. Next we have Jonathan Mitchell, the deputy director of Skills England.
And then on the end there is Simon Rawlinson, the deputy chair, Construction Industry Council. Thank you very much, all three of you, for coming along today. I think, you know, we've got a series of questions scattered amongst the team here. All I'd ask is both for witnesses and colleagues alike, to keep questions and answers as short as possible. If you don't know the answer, please don't feel compelled to fill the air. Please. Equally, if you'd like to write to us after the meeting with some additional information, please say so.
That is absolutely fine for us. First up, we have Lord Bailey.
And last week we started a session which we're calling bricks and mortar. It's about some of the physical and logistical issues around building these new towns and what stops them, and how do we get them going. And today we are focused. We've got two sessions. The first one is going to be on construction skills, and we've got three witnesses before us. First is is Sam Egan, who is the group director of construction at Bedford Colleges Group. Next we have Jonathan Mitchell, the deputy director of Skills England.
And then on the end there is Simon Rawlinson, the deputy chair, Construction Industry Council. Thank you very much, all three of you, for coming along today. I think, you know, we've got a series of questions scattered amongst the team here. All I'd ask is both for witnesses and colleagues alike, to keep questions and answers as short as possible. If you don't know the answer, please don't feel compelled to fill the air. Please. Equally, if you'd like to write to us after the meeting with some additional information, please say so.
That is absolutely fine for us. First up, we have Lord Bailey.
11:10
Speaker 6
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Speaker 6
Um, thank you chair. Good morning to all our guests. I'm going to start with Jonathan and then come to to our two guests as well. Um to what extent will shortages of construction skills impact the successful delivery of new towns and expanded settlements in the short term and the long term?Where are the shortages most acutely felt in the sector?And is there a distinction between technical skill and professional skills?So if I start with Jonathan.
11:11
Speaker 12
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Speaker 12
Yes, thanks. Thanks very much. And just quickly to to say, you know, that yes. There's no question that skills shortages are a real delivery risk for new towns, expanded settlements, um, and so on and so forth. And the challenge isn't just the number of people entering construction. Um, but it's about the right mix, I think of skilled trades, um, and higher technical specialists and professional roles across the whole piece. And our job at Skills England is to make sure that we are providing the right evidence, um and maintaining.
The employer led occupational standards that lie at the heart of the skills system that drive apprenticeships and technical qualifications and so on and so forth to make sure, um, that, that what people are trained in really does the job for, for industry. And as you say, um, you know, there is a significant skills challenge out there at the moment. So we know that from the research carried out in the skills needs analysis by Skills England, that about 493,000 additional workers will be needed in construction priority occupations by 2035.
Further, 595,000 replacement workers will be needed over the same period. So that's about a demand of about a million. Just over a million workers. We know that about 59% of those will be needed at levels 2 or 3, with about 41% at level four and above. So it's a significant challenge with a range of dimensions to it. Um, and there is a distinction between the technical or trade skills, I suppose, and the professional skills. But our view and the approach that we're taking is that these are profoundly interdependent.
Um, you know, no new town can come into being without the right mix of both of those. Um, so yes, we, we 100% recognise the skills shortages are already acute in construction. Um, but that the work that is going on now we think means that the future doesn't have to look the same as things do right now. Um, and some of the activities that we're undertaking at the moment are aimed at sort of addressing some of those challenges.
The employer led occupational standards that lie at the heart of the skills system that drive apprenticeships and technical qualifications and so on and so forth to make sure, um, that, that what people are trained in really does the job for, for industry. And as you say, um, you know, there is a significant skills challenge out there at the moment. So we know that from the research carried out in the skills needs analysis by Skills England, that about 493,000 additional workers will be needed in construction priority occupations by 2035.
Further, 595,000 replacement workers will be needed over the same period. So that's about a demand of about a million. Just over a million workers. We know that about 59% of those will be needed at levels 2 or 3, with about 41% at level four and above. So it's a significant challenge with a range of dimensions to it. Um, and there is a distinction between the technical or trade skills, I suppose, and the professional skills. But our view and the approach that we're taking is that these are profoundly interdependent.
Um, you know, no new town can come into being without the right mix of both of those. Um, so yes, we, we 100% recognise the skills shortages are already acute in construction. Um, but that the work that is going on now we think means that the future doesn't have to look the same as things do right now. Um, and some of the activities that we're undertaking at the moment are aimed at sort of addressing some of those challenges.
11:13
Speaker 6
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Speaker 6
Thank you. I'm going to come to you next, Sam. Um, a first question. Do you agree there's a shortage and does that affect what you try to provide on a daily basis. Are you responding to, to, to new courses needed new materials?And does the the imposition of new technologies mean a lower level of skill is needed or a higher level of skill is needed?
11:13
Speaker 1
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Speaker 1
Thank you. I think yes, I do agree it would be would be my response. We in terms of fee provision that we are developing at the moment through our Construction Technical Excellence Colleges programme, which is where the Bedford College is a lead for. We're looking really closely at where that demand is. We know that that um. Demand is outstripping supply at the moment. So very much the focus of what we're looking at is looking to employers and industry to ask what, what, what they actually need, I think at the moment there's, um, the feedback that we get from employers is that the qualifications and the training that our learners are receiving at the moment aren't, isn't good enough to be employable as, as employers would wish them to be.
So that's what we're looking at to sort of plug those gaps across the network and make sure that our learners are leaving and their site ready. That's, that's the main thing. Um, I think we have some of the challenges we have in face, obviously around funding capital funding space to deliver those qualifications is a real challenge for us. Um, there's a variability in funding approaches across, through devolution that we're trying to grapple with at the moment to make sure that that funding is being channelled in the right way.
Um, and one of our key, um, challenges. Is around teacher recruitment for those specific courses. So, um, around 17 in 100, um, teacher vacancies at the moment is in construction. So we're doing a lot of work to try and rectify that challenge.
So that's what we're looking at to sort of plug those gaps across the network and make sure that our learners are leaving and their site ready. That's, that's the main thing. Um, I think we have some of the challenges we have in face, obviously around funding capital funding space to deliver those qualifications is a real challenge for us. Um, there's a variability in funding approaches across, through devolution that we're trying to grapple with at the moment to make sure that that funding is being channelled in the right way.
Um, and one of our key, um, challenges. Is around teacher recruitment for those specific courses. So, um, around 17 in 100, um, teacher vacancies at the moment is in construction. So we're doing a lot of work to try and rectify that challenge.
11:15
11:15
Speaker 1
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Speaker 1
It's hard to fill the construction teacher roles because the the challenge is salary. They're not competitive. Um, in further education to industry. So the work that we try and do is to go out to industry, speak to industry experts and say, you know, you know, have you thought about giving back?Have you thought about delivering a masterclass or coming to speaking to students about careers in, in construction and what's out there?So it's about sort of making sure we're bringing as much of that industry expertise into our classrooms.
11:15
11:16
11:16
Speaker 6
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Speaker 6
Interesting. And I come to you, Simon. Now, um, how how are the industry seen this?Are you helping enough or are you just waiting at the end of the line with arms open, expecting fully trained, fully prepared, free to staff?Or are you trying to lean in and help provide for the future of the industry?
11:16
Speaker 11
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Speaker 11
Certainly not. And before I answer that, if I can just make a couple of observations about the overall question. Absolutely. I think firstly, is that the challenge around skills for new towns has to be viewed in the context of the wider capital investment programme for the UK. And so this then becomes a participation choice for organisations that the CIC represents. From point of view of both the institutions and say, for example, my employer. So do we prioritise new towns?Do we prioritise investment in net zero infrastructure?Do we prioritise our involvement in defence?And I think the viewing the new towns programme in isolation is is a risk, particularly in the skills sector.
Now we see the new towns programme as a particularly interesting opportunity to apply the new skill sets that the industry needs, because if one thinks about new towns, they require a multidisciplinary approach. They need an approach that is going to be focused on long term delivery. People centred, for example. And if one thinks from my surveying background, this is requiring a long term investment patient capital rather than what you might describe as the quick return from for sale housebuilding. So I think it does represent a really great opportunity for the professions to develop those new skill sets and to expand our offer to the wider population as well.
The idea that people can see themselves reflected in the professions that are working on these programmes. I'm going to make one final observation, which is that it's the professions and the management grades that are expected to see the greatest level of growth over the next three years. So the average growth, I think the Citb has come up with is about 1.6% over that period. For the professions, it's somewhere between 1.9 to 2.2%. Architecture growing the fastest. And that very large group, the cadre of senior managers and executive 1.9%.
So the challenge is not necessarily just in the skills, which is very, very important, but also the ability, the organisation of the industry to organise itself, to deliver effectively.
Now we see the new towns programme as a particularly interesting opportunity to apply the new skill sets that the industry needs, because if one thinks about new towns, they require a multidisciplinary approach. They need an approach that is going to be focused on long term delivery. People centred, for example. And if one thinks from my surveying background, this is requiring a long term investment patient capital rather than what you might describe as the quick return from for sale housebuilding. So I think it does represent a really great opportunity for the professions to develop those new skill sets and to expand our offer to the wider population as well.
The idea that people can see themselves reflected in the professions that are working on these programmes. I'm going to make one final observation, which is that it's the professions and the management grades that are expected to see the greatest level of growth over the next three years. So the average growth, I think the Citb has come up with is about 1.6% over that period. For the professions, it's somewhere between 1.9 to 2.2%. Architecture growing the fastest. And that very large group, the cadre of senior managers and executive 1.9%.
So the challenge is not necessarily just in the skills, which is very, very important, but also the ability, the organisation of the industry to organise itself, to deliver effectively.
11:18
Speaker 6
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Speaker 6
And when you. When you look at the future, um, how, how are you able to support people further upstream?So colleges and how do you represent the real needs of your of your members?So your members saying, we want people right here, right now with traditional skills, is that their biggest ask or are they saying we would like the development to deal with new technologies and these new towns situations?
11:19
Speaker 11
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Speaker 11
That's a that's a very good question because I think what you are describing there is the dynamic between accreditation of courses and the needs of the market, and there are probably things that 2 or 3 removes there. Um, there's a later question around high technology and that is effectively developing in the studio on projects in real time. And to some extent, you've got people who are being trained who won't be doing at work for five, seven years, perhaps depending on their professional career trajectory are being brought into degree courses that need to catch up to that.
And they, to some extent, are then dependent on being accredited by the institution. So there is a lag there, and I think that is a very important consideration, particularly given the long term nature of the development of new towns, that creates an opportunity so we can actually plan these things over a period of time, but also challenge from a point of view of scaling as well.
And they, to some extent, are then dependent on being accredited by the institution. So there is a lag there, and I think that is a very important consideration, particularly given the long term nature of the development of new towns, that creates an opportunity so we can actually plan these things over a period of time, but also challenge from a point of view of scaling as well.
11:19
Speaker 6
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Speaker 6
And quickly back to Jonathan, are you losing?Professional staff at the top. So in London, when we we've done a number of big things. We built the Elizabeth line. For instance, one of the big asks was to try to keep the team together that delivered that because it was a very unique team that, you know, got a lot of expertise. Do people finish these major things and then disperse?Do they go abroad?Are largely are your members etc.
able to hold on to that expertise into the industry?
able to hold on to that expertise into the industry?
11:20
Speaker 12
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Speaker 12
So I think, I think that that isn't really an area that skills England coordinates, but obviously a lot of the work that we do through various regional bodies and things like that takes, takes account of some of the thinking that needs to happen around, you know, the sort of ebbs and flows of, of workforce demand in particular regions. And we have a regions division within Skills England that is that is working with strategic authorities around the country to, to think about some of those challenges. Our our focus, you know, pick up on the point that was just made.
There is, is, is very much on making sure, um, that we are looking at how we can secure that pipeline of talent, um, into both the professions and the trades, you know, in this industry, um, to make sure that, that, that pipeline is constantly being renewed. And I think there are opportunities that we're exploring right now about where the sort of quite large steps sometimes between, you know, school leaving and degrees, um, and the sort of, you know, the professions that being the standard entry route to the professions, um, there are opportunities for there to be stages in between that, which we think will help make sure that that pipeline is as strong as possible.
There is, is, is very much on making sure, um, that we are looking at how we can secure that pipeline of talent, um, into both the professions and the trades, you know, in this industry, um, to make sure that, that, that pipeline is constantly being renewed. And I think there are opportunities that we're exploring right now about where the sort of quite large steps sometimes between, you know, school leaving and degrees, um, and the sort of, you know, the professions that being the standard entry route to the professions, um, there are opportunities for there to be stages in between that, which we think will help make sure that that pipeline is as strong as possible.
11:20
Speaker 6
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Speaker 6
And finally, I'm sorry, I'm to you, what level of, of career planning is there?Do I come from one of your courses to just be a brickie and, and leave and be a brickie?Or are you saying to me, I can go on from there?Are you talking to the young people about start point, end points, career development, or is it just about getting your ticket and moving on?
11:21
Speaker 1
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Speaker 1
I think I think it depends on the learner's wishes and desires fundamentally, and the sort of initial advice and guidance that would be provided for that student. But absolutely, it's about the full breadth of occupation and mapping that there is in the sector, and thinking about careers advice, which starts at school in this area, could be could be better, I think, to raise awareness of those professions within construction, not just I say just, but not just the trades, but it's about, um, you know, the breadth of opportunity that there is out there for our, for our learners and to sort of remove some of the stigma that's around, you know, some with parents in regards to how they view the construction trades and what else is out there.
So there's, there's quite a lot of work to still be done around that, but that's very much where it sits in terms of broadening those horizons.
So there's, there's quite a lot of work to still be done around that, but that's very much where it sits in terms of broadening those horizons.
11:21
11:21
11:21
Speaker 16
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Speaker 16
Thank you chair. A brief supplementary from me. So Jonathan, you just talked about the. Um, the work you're doing with strategic authorities, the regional work you're doing, which is really good. But can I, can I clarify in terms of governance, is there a are there any gaps in terms of that?So for example, where areas which aren't covered by a strategic authority. If you look at the Midlands, for example, where I live, we have a number of strategic authorities, mayoral combined authorities, but we have a lot of the region which isn't covered by strategic authorities.
How are you engaging there?Um, yeah. So I think are there any gaps that we need to look at?
How are you engaging there?Um, yeah. So I think are there any gaps that we need to look at?
11:22
Speaker 12
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Speaker 12
I think we work really hard to try and make sure that there aren't there aren't these gaps, especially where really significant things are happening. We have a infrastructure and investment skills service, which particularly in the case of like major things happening. Gigafactories and the like, where there is clearly going to be a skills demand challenge that needs to be met. Um, we would, we would work with the, the employers, the local authorities and so on and so forth to try and address that. And that's one of the ways, I think, in which we bridge to some of those.
So those really significant areas. And of course, we are working across sectors understanding, you know, we have an expert network of employers, you know, who cover the whole of the country, I think, and from whom we can draw really valuable and important, um, in. Insight about things that are happening in various different corners of the country. So I think we try really, really hard to do that. Inevitably, the way that devolution has sort of functioned so far. Is that there are sort of, um, there's some contouring there, you know, in terms of, in terms of how we engage, but I think we do our best to make sure that we iron out some of those contours as best we can.
So those really significant areas. And of course, we are working across sectors understanding, you know, we have an expert network of employers, you know, who cover the whole of the country, I think, and from whom we can draw really valuable and important, um, in. Insight about things that are happening in various different corners of the country. So I think we try really, really hard to do that. Inevitably, the way that devolution has sort of functioned so far. Is that there are sort of, um, there's some contouring there, you know, in terms of, in terms of how we engage, but I think we do our best to make sure that we iron out some of those contours as best we can.
11:24
11:24
Speaker 12
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Speaker 12
Yeah, no, thanks for that. And I think I think it's really helpful to, to think about the way the skill system works, you know, through, through the lens of purpose, as you, as you just have done, you know, there are a range of purposes we need to satisfy. They include workforce entry, but they also include reskilling and upskilling. Um, so, you know, as part of that, we, some of the work that we've been doing lately, including in construction, but in other areas as well, um, has involved looking at, uh, the introduction of apprenticeship units, um, which effectively draw on the same learning outcomes as standard apprenticeships, um, but enable people to take a core set of skills that they may already possess, um, and do some learning that enables them to, to, you know, to transition into a particular occupation that perhaps is emerging or something like that.
So I think that's one example of the kind of work that we're doing there. Of course, many people do choose to retrain through apprenticeships as well, and that that is a totally viable, um, option. But we're, we're working really hard as well to try and balance that, um, between, you know, kind of retraining and also the really critical importance of getting the pipeline into the workforce, um, flourishing as well.
So I think that's one example of the kind of work that we're doing there. Of course, many people do choose to retrain through apprenticeships as well, and that that is a totally viable, um, option. But we're, we're working really hard as well to try and balance that, um, between, you know, kind of retraining and also the really critical importance of getting the pipeline into the workforce, um, flourishing as well.
11:25
11:25
Speaker 17
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Speaker 17
Thank you very much. Yes. And we've heard both from written evidence and from oral evidence that we've got a crisis in skills. I mean, everyone seems to be describing it as strongly as that. Um, and, you know, the, the Construction Industry Training Board saying we need over 40,000 new members, new workers this year, 2026. And every year from now until. Well, Jonathan, you described it as 493,000 workers, new workers by 2035. Um, this is a pretty good amount of something that's gone terribly wrong that we're so short of skills.
And I'm just wishing to play this sort of the blame game. What I'd like to do is, is what changes, what changes needs to happen in order to in order to get 40,000 new workers this year, what what needs to change both government, private sector education?How do we how do we get this to actually happen on the ground?Jonathan, do you want to go first?
And I'm just wishing to play this sort of the blame game. What I'd like to do is, is what changes, what changes needs to happen in order to in order to get 40,000 new workers this year, what what needs to change both government, private sector education?How do we how do we get this to actually happen on the ground?Jonathan, do you want to go first?
11:26
Speaker 12
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Speaker 12
Dave. Thank you. Um, yeah. So, um, I think the reason that this has persisted is that there's a really structural problem, you know, at the heart of all of this, it's not a temporary shortage. As you as you've outlined, um, the way construction works, it's fragmented. It's highly project based. It's really reliant on subcontracting and sometimes very small SMEs. Um, and there's also the fragmentation in terms of skills demand. There's the need to meet the skills for the building of new towns.
As we, as we're talking about here. Um, but there's also the need to meet the skills, demand for the maintenance retrofit, conversion of the existing building stock as well. All of these things make the long term workforce planning really difficult. And in that context as well, one thing that we know across the economy is that employer investment in training has, has been declining. We know that SMEs tell us that the system can be hard to navigate, at least in apprehension, if not in reality.
But I think many find that they feel it is in reality as well. Um, and the, you know, the sector hasn't attracted or retained enough new entrants. So these, these are, these are all massive challenges. Um, I think the thing that I'm seeing change right now that I think is where we need to throw our weight, um, is not trying to solve that through the lens of a single organisation alone. I'm not going to solve it on my own at Skills England.
Um, neither of my two colleagues sitting alongside me are going to solve it on their own either. And I think where we're seeing the real opportunities is in industry and government and regions and national government and all those kinds of things really working together on this. That's where I think we saw some of the real opportunities coming in, the construction skills package, which itself was a kind of reflection of parallel commitments being made both by government and by industry. So leading to a £625 million investment from government, but also parallel commitments being made by industry, um, that were part of what made all of that possible.
Our work at Skills England is to try and bridge those things, to try and make sure that we identify the areas where we can, we can bring construction industry, which doesn't always agree with itself together. Um, and, and find, find ways forward. Um, and that's what we're trying to do.
As we, as we're talking about here. Um, but there's also the need to meet the skills, demand for the maintenance retrofit, conversion of the existing building stock as well. All of these things make the long term workforce planning really difficult. And in that context as well, one thing that we know across the economy is that employer investment in training has, has been declining. We know that SMEs tell us that the system can be hard to navigate, at least in apprehension, if not in reality.
But I think many find that they feel it is in reality as well. Um, and the, you know, the sector hasn't attracted or retained enough new entrants. So these, these are, these are all massive challenges. Um, I think the thing that I'm seeing change right now that I think is where we need to throw our weight, um, is not trying to solve that through the lens of a single organisation alone. I'm not going to solve it on my own at Skills England.
Um, neither of my two colleagues sitting alongside me are going to solve it on their own either. And I think where we're seeing the real opportunities is in industry and government and regions and national government and all those kinds of things really working together on this. That's where I think we saw some of the real opportunities coming in, the construction skills package, which itself was a kind of reflection of parallel commitments being made both by government and by industry. So leading to a £625 million investment from government, but also parallel commitments being made by industry, um, that were part of what made all of that possible.
Our work at Skills England is to try and bridge those things, to try and make sure that we identify the areas where we can, we can bring construction industry, which doesn't always agree with itself together. Um, and, and find, find ways forward. Um, and that's what we're trying to do.
11:28
11:28
Speaker 11
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Speaker 11
Um, if I can make a slightly controversial, um, observation, I believe, um, that the labour crisis that you describe is more one of need rather than demand in the same way that the housing crisis currently described 1.5 million homes, is one related to need rather than demand, if one looks at labour market dynamics and cost inflation trends in the UK since 2019, the construction industry has consistently, under underperformed from a cost escalation perspective compared to the wider industry. That points to excess capacity rather than shortage of capacity. Now, my observation in terms of why that is occurring is because of lack of demand.
And if one, again, to go back to the pipeline, there's a very interesting piece of work published by McKinsey March this year. It's called impatient for infrastructure. It's a very good, very short read. And one of the things it does is it it analyses the size of the pipeline that has been reported by Nesta or the or the National Infrastructure Commission since 2015, routinely about 80 billion a year spend. And it calculates the actual spend at about 47 billion. So there's a 40% shortfall on delivery of what the industry is told to plan for, as opposed to what actually happens.
Now, I'm going to say that that need is genuine. So the projections that everybody is making citb skills England are I have absolute confidence that they represent what is needed to deliver the infrastructure this country needs. But at the moment we struggle to actually make that happen. And I think that then takes away what you might describe as the the need for concerted action, say, between the institutions, between the training institutions, the universities, to solve these problems, because the actual problem itself isn't acute enough on the workplace.
So I think part of the solution is actually creating what you might describe as more jeopardy through more programmes, a bit like the Olympics, bit like Crossrail, that actually get people really focusing on having to get things done. Because at the moment we're sort of there, but we're never quite there. And that to some extent allows for the situation that you described, which is little progress taking place.
And if one, again, to go back to the pipeline, there's a very interesting piece of work published by McKinsey March this year. It's called impatient for infrastructure. It's a very good, very short read. And one of the things it does is it it analyses the size of the pipeline that has been reported by Nesta or the or the National Infrastructure Commission since 2015, routinely about 80 billion a year spend. And it calculates the actual spend at about 47 billion. So there's a 40% shortfall on delivery of what the industry is told to plan for, as opposed to what actually happens.
Now, I'm going to say that that need is genuine. So the projections that everybody is making citb skills England are I have absolute confidence that they represent what is needed to deliver the infrastructure this country needs. But at the moment we struggle to actually make that happen. And I think that then takes away what you might describe as the the need for concerted action, say, between the institutions, between the training institutions, the universities, to solve these problems, because the actual problem itself isn't acute enough on the workplace.
So I think part of the solution is actually creating what you might describe as more jeopardy through more programmes, a bit like the Olympics, bit like Crossrail, that actually get people really focusing on having to get things done. Because at the moment we're sort of there, but we're never quite there. And that to some extent allows for the situation that you described, which is little progress taking place.
11:30
11:31
Speaker 11
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Speaker 11
It's many. So if we take, for example, the current um programme of work, we have regulated sectors energy, water, who have very large amounts of investment, which is underpinned by user charges. But still that investment has to deliver a return for those companies to take it forward. And it's fair to say in the in that particular sector, there are resource challenges, and that is perhaps not moving quite as quickly as we'd like it to. But it will. And I think we will see resource challenges in those areas very, very soon in house building.
Um, I think there are thousands of mines in this country trying to work out how to sort out house building, whether that's a blend of social and affordable and market homes, whether you need patient capital involved, whether the current model works or not. And, and I, and I think it's the, the concentration and looking at different alternatives rather than relying on perhaps 1 or 2 levers, like planning to be the solution. So I'm not going to be so bold as to suggest a particular solution to that problem.
But I think it is a joined up, multifaceted, um, range of funding, planning decisions, all sorts of things that need to, to get dealt with. And they do take a long time reflect on lower Thames Crossing. My organization's been working on for ten years. We're now dependent on legislation in the current session of Parliament to define a funding model, to enable that to move forward. So it does take its time to make these things happen.
Um, I think there are thousands of mines in this country trying to work out how to sort out house building, whether that's a blend of social and affordable and market homes, whether you need patient capital involved, whether the current model works or not. And, and I, and I think it's the, the concentration and looking at different alternatives rather than relying on perhaps 1 or 2 levers, like planning to be the solution. So I'm not going to be so bold as to suggest a particular solution to that problem.
But I think it is a joined up, multifaceted, um, range of funding, planning decisions, all sorts of things that need to, to get dealt with. And they do take a long time reflect on lower Thames Crossing. My organization's been working on for ten years. We're now dependent on legislation in the current session of Parliament to define a funding model, to enable that to move forward. So it does take its time to make these things happen.
11:32
Speaker 17
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Speaker 17
Yeah. Thank you very much. And, Sam, what do you think the role of your sector is going to be?I mean, we heard last week, for instance, that although, as you said, you've got people queuing up to join your courses and apparently a large percentage of them we heard last week are actually leaving in the middle of the course and not completing their course. Can you make your courses more interesting, do you think, or what's the solution?
11:32
Speaker 1
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Speaker 1
I think. the the the solution is around. Yes. Making courses. Um, a. More real life for those, for our learners, having sort of a proper work experience, not just not just going and sitting in an office, it's actually going out to those live work construction sites where they can to really It's actually going out to those live work construction sites where they can to really experience what that that industry is like. I think a lot of learners are predominantly taught, for example, bricklaying under a, under a cover.
Um, you know, in real life, it's, it's cold outside. You know, it's about them getting used to what that real working environment is really like. And that's something that, that we're really, really championing through our program. Um, I think, um, a key component to our qualification delivery is that employer engagement piece. That's, that's really, really key because without that employer involvement, it doesn't, it doesn't really bring that sort of career to life for our learners as much as it could do.
Um, and I think that's the support from employers through apprenticeships is really important as well. So they have really good engagement and support from the Fe organisation. And then really good support from the employer as well to help support the momentum them through their qualification to make sure that they're retained on that on their course, that they're studying.
Um, you know, in real life, it's, it's cold outside. You know, it's about them getting used to what that real working environment is really like. And that's something that, that we're really, really championing through our program. Um, I think, um, a key component to our qualification delivery is that employer engagement piece. That's, that's really, really key because without that employer involvement, it doesn't, it doesn't really bring that sort of career to life for our learners as much as it could do.
Um, and I think that's the support from employers through apprenticeships is really important as well. So they have really good engagement and support from the Fe organisation. And then really good support from the employer as well to help support the momentum them through their qualification to make sure that they're retained on that on their course, that they're studying.
11:34
11:34
11:34
11:34
11:34
Speaker 11
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Speaker 11
I'm so sorry not to be with you. Um, just to pick up very, very briefly on what Simon just said. I think the urgency that you point to, the need to make things more urgent is something that really. Really resonates with the committee in terms of our previous reports, in terms of the new towns programme, actually. Um, and you have already answered in part part of my question actually, which was, you know, what are the new towns need by way of new skills to thrive?Because as you described, there is a great opportunity to pioneer maybe some quicker routes into different sorts of skills across construction, but also project management and design and so on and so forth.
The complete skill set. So I won't ask you to repeat what you said, but I do want to ask, um, the, Jonathan particularly about skills England in this respect. You in your opening remarks, you talked about setting standards and providing evidence, but we've heard categorically about skills shortages. Do you see the new towns bearing in mind you cannot see them in isolation, as you have said?Do you see them as an opportunity to pioneer not just new skills, whether that's technological or quick ways of learning?Um, but new methodologies and progression routes into careers, which can then actually, in the long term, provide better, more satisfying careers.
Would that be your job?And could you do it?
The complete skill set. So I won't ask you to repeat what you said, but I do want to ask, um, the, Jonathan particularly about skills England in this respect. You in your opening remarks, you talked about setting standards and providing evidence, but we've heard categorically about skills shortages. Do you see the new towns bearing in mind you cannot see them in isolation, as you have said?Do you see them as an opportunity to pioneer not just new skills, whether that's technological or quick ways of learning?Um, but new methodologies and progression routes into careers, which can then actually, in the long term, provide better, more satisfying careers.
Would that be your job?And could you do it?
11:36
Speaker 4
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Speaker 4
Yeah. Thanks. Um, so yes, I think we, we can do, um, lots of that work not on our own as, as you know, as previously established, I think, um, I think that is something for industry and government to work together on. Our job is to work with, with industry to make sure we really understand what those, what those skills demands are going to be. And of course, you know, it's really obvious to, to all of us, I think that, um, the pace of technological change in construction in the built environment as much as anywhere else is, is very, is very significant.
Some of those new skills, skills, demands are transversal. They can cut across a range of different industries and things like that. And we absolutely get that. I mean, AI being the example everybody gives all the time, but I think there are others as well. Um, I think we see the potential for um, there and certainly through the conversations we're having with industry at the moment for, um, some of these changing skills demands to, to unlock different ways in which we can bring people into these skills pipeline.
So, you know, to give a sort of example that I don't think is necessarily authoritative, but it is not that hard to imagine in terms of some of those, um, some of those built environment professionals that I've, that I've talked about, um, the role that AI can play in such a way that it helps with that bridging between those who want to enter the industry, but perhaps need a step in between getting to full chartered status and, you know, and all of that kind of kind of thing where AI and the skills that they can develop in that space may be a part of that, of that sort of solution.
So I think, I think there are ways in which these opportunities where there is a clear pipeline of demand for, um, for employees, um, can give us the opportunities to begin to build skills training products that, that are different and that work at work in different kinds of ways. And part of the work that I did in the last few years, um, was around making sure that we are in a strong position to detect those early signals of changing labour market demand, where, you know, where employers are beginning to ask for something that may not yet have become the norm across a particular industry, and make sure that we are really spotting that, working out when we need to get that, um, at the heart of training that needs to be delivered, working through our regional partners to, to explore how that can work at a regional level as well.
Um, and, you know, we've done some really interesting work with innovate UK as well in their catapult network. Again, to understand where those, those new technologies are going to lead to new, new skills, skills demand. So I think there's lots of things that we can do.
Some of those new skills, skills, demands are transversal. They can cut across a range of different industries and things like that. And we absolutely get that. I mean, AI being the example everybody gives all the time, but I think there are others as well. Um, I think we see the potential for um, there and certainly through the conversations we're having with industry at the moment for, um, some of these changing skills demands to, to unlock different ways in which we can bring people into these skills pipeline.
So, you know, to give a sort of example that I don't think is necessarily authoritative, but it is not that hard to imagine in terms of some of those, um, some of those built environment professionals that I've, that I've talked about, um, the role that AI can play in such a way that it helps with that bridging between those who want to enter the industry, but perhaps need a step in between getting to full chartered status and, you know, and all of that kind of kind of thing where AI and the skills that they can develop in that space may be a part of that, of that sort of solution.
So I think, I think there are ways in which these opportunities where there is a clear pipeline of demand for, um, for employees, um, can give us the opportunities to begin to build skills training products that, that are different and that work at work in different kinds of ways. And part of the work that I did in the last few years, um, was around making sure that we are in a strong position to detect those early signals of changing labour market demand, where, you know, where employers are beginning to ask for something that may not yet have become the norm across a particular industry, and make sure that we are really spotting that, working out when we need to get that, um, at the heart of training that needs to be delivered, working through our regional partners to, to explore how that can work at a regional level as well.
Um, and, you know, we've done some really interesting work with innovate UK as well in their catapult network. Again, to understand where those, those new technologies are going to lead to new, new skills, skills demand. So I think there's lots of things that we can do.
10:50
Speaker 11
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Speaker 11
Um, so it becomes a sort of virtuous circle, virtuous circle in terms of modern methods of construction. You could actually see a new skill pattern emerging in part of that. For example, two specific questions. Could you see the new towns as sort of test beds, perhaps to embed a training and apprenticeships from the beginning?There's a very long term programs. They are site specific, but they will have a common sort of universality, you know, of essential actions. Um and could you um as it were, audit that sort of becomes transferable across construction or in fact across management.
10:50
Speaker 4
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Speaker 4
Yeah. I mean, simply put, yes, I think we can do that. I've already mentioned the Infrastructure and investment service that Skills England has. And, you know, uh, it may well be that, that there will be areas of that, things that are happening in new towns, opportunities for. Where the pipeline of demand effectively permits employers to invest in the adoption of technological innovation and things like that. Um, that, that gives us real scope, I think, to help accelerate and support that by, by reflecting that in the, in the training that can be delivered.
Um, so yes, I think that is feasible.
Um, so yes, I think that is feasible.
10:51
Speaker 11
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Speaker 11
And finally, who and how, if that were to happen, would you expect people to come to you?Or could you go to say, a number of the development corporations, we expect to be involved and say, okay, you know, we think we could help like this. This is what we think it would look like. What do you think?Or would it be a more responsive rather than proactive a decision on your part?
10:52
Speaker 4
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Speaker 4
I think it's always, in my experience, a mixture of the two and in fact, often, again, in my experience, you know, what happens is that that we we meet in the middle because we're both so desperate to talk to one another. So you take the new hospital programme and things like that. You know, that is the sort of way that is playing out for us. So I think we do see ourselves as having a sort of convening and sort of catalyzing role in, in, in, in the way in which the skill system evolves.
Um, but likewise, we, we often are meeting people in the middle who also want, want that same outcome.
Um, but likewise, we, we often are meeting people in the middle who also want, want that same outcome.
10:52
Speaker 11
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Speaker 11
I think that would be very welcome because we have heard time and time again about the lack of coordination, the absolute essential quality of people getting together. And you again, in your opening remarks, talked about the importance of coordination. So perhaps this could be a testbed to do some of these things in new ways. Thank you very much indeed.
10:52
10:53
Speaker 2
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Speaker 2
Uh, just a quick bit of clarification there. You've talked a couple of times in the answers about regional partners and regional variations. And you mentioned, um, in your. Answer to the first question, um, that they were contoured, which I've been mulling over. Is that a euphemism for something?And could you explain it a little more?And how do you see the regional variations being addressed?
10:53
Speaker 4
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Speaker 4
So sorry. Yeah, that's probably, um, you know, just poor English on my part, which given that I used to be an English teacher, is probably a bad thing. Um, I, yes, I, what I meant by that was there is clearly a difference across the country in the amount of capacity that different parts of the country have to engage with us on skills. The mayoral strategic authorities around the country, you know, often have very mature or maturing, um, sort of skills, uh, dimensions to them, some other parts of the country with fewer devolved powers and things like that.
Um, you know, don't, don't, don't have the same apparatus to engage with us. I don't think that means that we are therefore just sort of ignoring those parts of the country.
Um, you know, don't, don't, don't have the same apparatus to engage with us. I don't think that means that we are therefore just sort of ignoring those parts of the country.
10:54
10:54
Speaker 4
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Speaker 4
Yeah. I think, um, in the ways that I, I've sort of tried, tried to describe, I think particularly where there's particular, um, sort of. High impact or high profile sort of infrastructure or investments taking place as in the South west, you know, in Taunton. Um, but also with, you know, Team Plymouth and all of those kinds of things where we are working with our sector partners, I think, uh, you know, like Babcock and others to, to explore, you know, how we can make sure that the right, the right sort of skills, skills mix is in place and that we are getting the right sort of intelligence that we need and insight and engagement from employers, including where that brings some constructive challenge to us as it sometimes does, um, to, to, to make sure that we, we are cognizant of what's going on and that we, that we're taking the actions required.
So through a number of, of approaches, I guess. Yeah.
So through a number of, of approaches, I guess. Yeah.
10:55
10:55
Speaker 5
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Speaker 5
I'm not quite sure who's best to answer this, but um, how big a distorting impact does or do regional variations in pay house prices. Um etc. impact on, on sort of the labour market for construction skills. I mean, if you're a bricklayer in I don't know, Blythe say the value of your pay presumably is somewhat greater than if you're a bricklayer in Brixton. Um, and property values would have an impact on wage levels as well. I mean, does this impact on the way in which the labour market works and the way in which people approach learning and skilling up.
Um, slightly.
Um, slightly.
10:55
Speaker 3
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Speaker 3
Going off slightly off piste from my role on the CIC. But there are, there are quite noticeable differences in the cost levels to deliver comparable buildings. So for example, in central or outer London, Birmingham, Manchester and, and some rural areas, they tend to be more extreme in London, the south east as you'd expect. And that reflects the kind of factors that you've described from the point of view of cost of housing and such like, um, I don't think there's necessarily a, a huge evidence of shortage of labour in these locations.
And I think that's because the construction sector is quite mobile from the point of view of its preparedness to, to move from the sectors that I represent, uh, which is the professions, um, the professions of course are increasingly spatially agnostic, digitized, and therefore to some extent can practice anywhere. And, and I think that is an important consideration for the scale of the programs that we're describing today, where you do need to bring together large teams at particular crucial moments. So I think that that sense of you're not trapped with a particular regional model is very important.
And I think that's because the construction sector is quite mobile from the point of view of its preparedness to, to move from the sectors that I represent, uh, which is the professions, um, the professions of course are increasingly spatially agnostic, digitized, and therefore to some extent can practice anywhere. And, and I think that is an important consideration for the scale of the programs that we're describing today, where you do need to bring together large teams at particular crucial moments. So I think that that sense of you're not trapped with a particular regional model is very important.