Procurement Hub’s Alan Heron explains why the skills shortage is such an issue for the housing sector and how apprenticeships might help close the gap. Photography by Getty
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Why are apprenticeships important for the housing sector?
Given the unknown availability of skills and labour from EU nationals over the next few years due to Brexit, and the high proportion of UK tradespeople approaching retirement, it has never been more important for the housing sector to become more self-sustaining when it comes to people and skills.
The Construction Industry Training Board has estimated that the housing and construction industry needs 44,690 new entrants per annum to maintain the sector. In 2015, just 7,280 construction apprentices completed their training across all trades. The new apprenticeship levy will catalyse the entrants the housing sector requires.
The introduction of the apprenticeship levy has put greater onus on housing providers to offer new apprenticeship programmes. What have been the results so far and how do you see it affecting change in the future?
The results have been mixed, but the apprenticeship market is very much still in the midst of a transformation. The government’s new legislation will mean a change to the courses available, with a huge transition from the outgoing ‘frameworks’ to new ‘standards’. This will involve the development of new training programmes which are more relevant and meaningful to the current sector.
It is intended that by 2019 all the frameworks will have been replaced by standards. Standards are occupation focused; they are not qualification led. The learning happens throughout the apprenticeship, and the apprentice is assessed at the end, when they have to prove they can do all aspects of their job.
How problematic is the current skills shortage across the sector?
Deloitte recently produced a report which revealed that 36% of non-British workers in the UK are thinking about leaving by 2022, and 26% by 2020.
Meanwhile, the shortage in the skilled trades is becoming more serious. Quite simply, more people are retiring from such professions than joining them, which leaves an ever-growing gap.
There are multiple factors which combine to exacerbate the situation, but an embedded and effective apprenticeship programme would go a considerable way towards alleviating the problem.
What role will apprenticeships play in addressing some of these skills shortages?
Apprenticeships can play a pivotal role in addressing these issues. However, the housing sector needs to understand with more granularity where its greatest skills shortages lie – primarily in skilled trades and engineers – and then create apprenticeships in a proportionate and pragmatic manner that best addresses the issues.
Only this will start to create a strong foundation for a self-sustaining skill set in the sector.
How is the procurement of apprentices changing?
This is a critical consideration, as the method of procurement is fundamental to success given the tumultuous environment of constant change we’re seeing in the apprenticeships market, the housing sector, and indeed the UK as a whole.
Procurement Hub is currently developing an Apprenticeships Dynamic Purchasing System (DPS), which will be launched in December 2017 and will be the first of its kind in the UK.
The use of a DPS is critical, as it is the only procurement technique that will be fluid enough to remain meaningful, commercial and relevant as the legislation, supply chain, and housing sector continue to evolve at such a rapid pace.
The traditional procurement tool of a framework is simply not appropriate as it is essentially a ‘snapshot in time’, and as the market and sector continue to develop, it will become increasingly irrelevant with each passing day.
The main benefit of the Apprenticeships DPS will be that it will continually remain relevant, with the ability to add new emerging suppliers and training providers, and reflect changing legislation throughout its lifetime – something a framework simply could not do. It is the dynamic nature of the DPS that makes it the perfect platform for apprenticeships.
The government has made changes to apprenticeships in recent years as part of a major reform programme. What other changes do social landlords need to consider?
Social landlords first need to fully understand the changes to the delivery of apprenticeships, and the implications of the new apprenticeship levy. Then they need to assess the skills shortage (both current and anticipated) that they face within their organisations.
This should be considered in conjunction with any strategic objectives they may have as an organisation (for example, development of new housing) as these objectives can only be achieved if the right blend of skills and people are available to them.
It will be the collective consideration of legislative changes, individual organisations’ skills shortages, and aspirational objectives that will allow social landlords to make informed decisions about their apprenticeship requirements.
What can the sector do to encourage more people to want to work in housing?
It is fundamentally important that social landlords encourage more people to work in the housing sector.
There is a huge variety of roles required to support the sector, from plumbers to procurement, marketing to maintenance, and engineers to electricians. I don’t feel that the rich variety of roles and opportunities is widely communicated or understood, and the sector must do something to change this.
While this sort of encouragement will undoubtedly offer job opportunities and training to a range of people, it is not an exclusively altruistic act – it is also a very astute commercial one.
The apprenticeship route is probably the most cost-effective way for any organisation to reduce the risk of the skills shortage, and ensure they become more self-sufficient as we head into the unknown post-Brexit world that awaits us.
Alan Heron is head of procurement at Procurement Hub. He has more than 20 years’ experience in procurement and operational management, with specific knowledge of EU procurement legislation, corporate social responsibility in the supply chain, value engineering and leading strategic change through procurement.