New Anglia LEP - Construction Labour and Skills Research Final Report

Transcription

1 - Construction Labour and Skills Research Final Report Client: New Anglia LEP Author: Sandra Lilley, Doug Forbes and Martin Turner Approved by: CITB Date: 12/02/16

2 Version Date Details of modifications Draft 1 17/09/15 Initial draft release Draft 2 05/02/16 Updated labour demand and supply projections This report was commissioned by, and prepared for the New Anglia LEP by a consortium of CITB and Whole Life Consultants Ltd, ('The Consortium ). The findings and conclusions set forth in this report represent the best professional judgment of the Consortium based on information made available to it at a point in time. The Consortium has relied on, and not independently verified, data provided to it by such sources and secondary sources of information cited in the report. We disclaim any responsibility to the client and others in respect of any matters outside the scope of the above. We accept no responsibility to third parties to whom this report, or any part, thereof is made available. Any such party relies upon the report at their own risk. CITB Bircham Newton Kings Lynn Norfolk PE31 6RH t: +44 (0) CITB is registered in England and Wales Charity No and in Scotland Charity No SC Whole Life Consultants Limited Dundee University Incubator James Lindsay Place Dundee DD1 5JJ t/f: +44 (0) enquiries@wlcuk.com Whole Life Consultants Ltd is registered in Scotland as SC259987, VAT number Registered office c/o 14 City Quay, Dundee DD1 3JA i

3 Table of Contents TABLE OF CONTENTS... II LIST OF FIGURES... IV LIST OF TABLES... V INTRODUCTION... 1 Background... 1 Defining strategic objectives... 1 Creating the evidence base... 2 METHODOLOGY... 3 A VIEW OF DEMAND... 4 Introduction... 4 Pipeline analysis Glenigan pipeline Breakdown of spend by project type Producing estimates of labour demand Breakdown of labour demand by project type Sizewell C nuclear power station Assessing the wider demand within New Anglia Methodology and assumptions Updated labour demand calculations and projections Neighbouring regions Summary of demand A PICTURE OF SUPPLY Main points Existing workforce Employer Structure Training provision Mobility of the workforce Main points Work history Worker origins Travel to site Site duration and change Sub-sector and sector mobility Leaving the sector DEMAND AGAINST SUPPLY Main points Gap Analysis ii

4 Construction specific occupations Cross-sector occupations Long term construction employment forecast CONCLUSIONS AND RECOMMENDATIONS Summary of Concluding Remarks Recommendations iii

5 List of Figures Figure 1: The significant projects in Glenigan used in this analysis... 7 Figure 2: Total Construction labour demand arising from the Glenigan data for the LEP including projected growth (excluding Sizewell C) Figure 3: Construction labour demand arising from the Glenigan Pipeline by occupation in the peak year Figure 4: Construction labour demand arising by sector and sub-sector Figure 5: Construction labour demand of the Sizewell C development compared to the rest of the demand in the New Anglia LEP Figure 6: Total construction labour demand including estimate for R&M and projects not in the Glenigan database Figure 7: Construction employment in the East of England: (Source: Experian & CITB) Figure 8: Construction firms by size, 2014 (Source: ONS/NOMIS) Figure 9: Furthest distance worked in past 12 months (CITB, 2015) Figure 10: Average number of weeks from planning to work on site, UK (Source: UKCG/Glenigan) iv

6 List of Tables Table 1: Details of large projects... 5 Table 2: Breakdown of the significant project and total values in the LEP, as captured in Glenigan... 5 Table 3: Proportion of total value related to construction... 6 Table 4: List of 20 significant projects... 8 Table 5: Construction spend per sector for the period Table 6: Construction spend per infrastructure sub-sector for the period Table 7: Total labour demand in the LEP (excluding mine and offshore) Table 8: Comparison of labour demand arising from Sizewell C to the New Anglia LEP Table 9: Total labour demand in the New Anglia LEP area Table 10: Significant projects in neighbouring areas Table 11: Construction occupational breakdown, 2015 (Source Experian & CITB) Table 12: Type of projects spent significant periods on (CITB, 2015) Table 13: Demand as a % of 2015 employment (Source: CITB/WLC) Table 14: Occupational breakdown of demand for New Anglia LEP (Source CITB/WLC) v

7 Introduction Background The New Anglia Local Enterprise Partnership (LEP) and the Construction Industry Training Board (CITB) are working together on the creation of a plan for action to enable some of the challenges the LEP faces to be addressed through local construction activity. This research report creates a detailed evidence base that should be utilised to inform decision making and enable the creation and execution of that action plan. CITB and New Anglia LEP have held a series of discussions highlighting the objectives that this research should inform. This report represents the concluded research, taking into account key questions posed by the LEP, the New Anglia Skills Board and Building Growth Group; addressing issues so that a practical approach can be taken to realising the opportunities that activity in the construction sector can generate in terms of developing skills and creating jobs. Defining strategic objectives Underpinning the action plan is the New Anglia LEP, which is a partnership for growth between the private sector, local authorities, universities, further education and other stakeholders across Norfolk and Suffolk. The LEP s Strategic Economic Plan (SEP) outlines how the New Anglia LEP will: Create the right conditions for business to thrive, establishing New Anglia as a centre of global business excellence. Create 95,000 more jobs across all sectors feeding a more efficient local economy; Create a further 10,000 new businesses, with a focus on SMEs. Shape the local workforce to provide people with skills that businesses need to succeed and that will provide them with job opportunities. Improve productivity, ensuring that by 2026 gross value add per job will equal the national average. Create 117,000 new homes by 2026, a 32% increase in delivery. To achieve the goal of increased high value jobs and increased productivity across businesses New Anglia LEP recognises the need to improve the skills system across Norfolk and Suffolk. Activity has taken place through the City Deal approach to bring stakeholders together, including local businesses, training providers and local authorities to ensure a common approach was identified and an effective strategy developed. This strategy (which includes the creation of a Skills Manifesto and Skills Board) focuses on improving processes, utilising funding streams with improved effect and ensuring national programmes are relevant for local stakeholders. Understanding the challenges that exist in each sector has become key, hence the commission of this study. Construction as a sector is significant and is still feeling the impact of the recession that saw a considerable decline in its skills base and people leaving the sector. Construction projects of all sizes create jobs that contribute to economic growth and stability and require a significantly skilled workforce that needs to be supported and trained, mainly locally. In addition 95% of the construction sector workforce is supplied by SME and micro employers throughout the New Anglia LEP area. The sector is, therefore, dominated by micro businesses and there is a significant proportion of selfemployed labour in the sector. 1

8 Traditionally employers in this segment of the market can be difficult to reach. However, the LEP has made supporting small businesses a priority, which should create significant benefits for the construction sector in this area. CITB s primary remit includes: Assisting and directing the further education offer to employers improving the quality, relevance and impact of the most significant providers of initial training and up-skilling. Sharing labour market intelligence creating a bespoke evidence base where required. Improving employability with a focus on ensuring that young people aged have the best opportunity to get a job locally and are work ready. Supporting business-provider collaboration. The subsequent action plan co-created by the New Anglia LEP and the CITB team will seek to ensure that a continuing supply of appropriately qualified local people is available to meet the identified local skills and employment outcomes. This approach will be supported and informed by the development of a comprehensive evidence base that will provide information to support decision making and help ensure that the vision and objectives for the New Anglia LEP and CITB are met. Creating the evidence base This evidence base will: Analyse the demand pipeline in the New Anglia area (by occupation, sector and geographically) to understand what construction opportunities are likely to be created, the skills challenges and how employment and training opportunities can be maximised. This analysis will include the impact of any potential new nuclear new build at Sizewell in Suffolk. Create additional analysis based on the development of a scenario that estimates an element of unknown construction projects that have a value less that 250,000 or will be repair & maintenance focussed. The purpose of this is to ascertain additional elements of the demand pipeline but it should be noted that this part of the analysis cannot be assessed at occupational level. Analyse the wider New Anglia demand pipeline to understand what additional projects will be taking place that will potentially draw on the localised skills base. What major employers exist in New Anglia that will employ the construction workforce and deliver the forecasted projects. Conduct analysis into current supply including the existing workforce, provision supplied by local colleges, technical and higher level skills development and retention and how new entrants feed into construction. Understand the impact of the loss of skills from construction into other sectors post-recession and the risks associated with an aging workforce. Consider inter-regional supply mobility and how this might impact on construction skills and employment in the area. Evaluate existing construction training provision in the area, the extent to which this is fit for purpose and the potential viability of a range of flexible training options in the future incorporating innovation within the sector. CITB will engage local stakeholders, as appropriate, during the development of this action plan and evidence base. 2

9 Methodology The methodology utilised covers a range of research approaches rather than relying on a singul method, therefore enhancing the ability to produce a richer evidence base through a range of approaches that are both quantitative and qualitative. CITB offers a bespoke research service that builds on the detailed Labour Market Intelligence it produces utilising its unique forecasting model known as the Labour Forecasting Tool (LFT). The team works in close partnership with WLC Ltd (a spin out company from the University of Dundee) that specialises in labour productivity, planning and control and building labour forecasting models. Please refer to Appendix A for an explanation of the methodology followed to produce the labour demand figures. This research has been supported by the CITB research team that specialises in labour market analysis relating to the supply of labour and identifying skills pinch-points. To date our work has been significantly tested and extends to a portfolio of bespoke research skills commissions at project, programme and regional level to create a compelling evidence base to support decision making. The research has included: Demand analysis of construction projects projected over a five year period in the LEP area at a detailed occupational level, utilising the Labour Forecasting Tool. Analysis of labour supply; including the existing workforce, new entrants (including apprentices) and labour mobility. Gap analysis to determine occupational pinch-points and decipher recommendations regarding training interventions. A map of existing provision to support recommendations relating to capacity, capability and collaboration on future curriculum offers. This methodology has enabled a comprehensive research report to be produced that will identify current and emerging skills needs and make recommendations on strategies and actions to ensure the LEP has a construction workforce that is fit for purpose. This will underpin the wider construction strategy work that the LEP is progressing with CITB and support the LEP in meeting its strategic priorities in the production of detailed, specific labour market intelligence for construction. The information it will generate will enable stakeholders to hold effective conversations and work across the LEP and with other agencies, employers and providers to ensure maximum employment and training opportunities for local residents. The Labour Market Intelligence (LMI) and its recommendations will provide the evidence base to enable the New Anglia LEP to ensure that there are adequate and effective programmes of skills development and employment interventions that meet demand during the construction phase of key projects. 3

10 A view of demand Introduction This section provides an evidence base of the labour demand that construction investment will create across the LEP over the next five years. Please refer to Appendix A for an explanation of the methodology followed to produce the labour demand figures. First, in Section 3.2, we analyse the demand based solely on the data contained on the Glenigan database. In Section 3.3, we add to the Glenigan data our estimates of the total value of new build projects that is not included in Glenigan and the value of repair and maintenance projects. We have input this data to our Labour Forecasting Tool 1 (LFT) to analyse the skills requirements in each of 28 occupations listed in Appendix B. The results are also presented at a trade, craft and professional level that will enable the LEP to take a comprehensive view of the demand generated by planned projects. This study includes a detailed analysis of the projects taking place wholly within the counties of Norfolk and Suffolk as well as the relevant portions of frameworks taking place within the area. A detailed picture of the labour demand for the New Anglia LEP area and for the two areas of Norfolk and Suffolk are presented in Appendix E and Appendix F. Pipeline analysis Our analysis of the demand in the area initially considers the demand from the known pipeline of work. This demand is principally generated by those projects included within the Glenigan database although it is supplemented with additional knowledge of the New Anglia area s construction output Glenigan pipeline Our initial analysis of the pipeline of construction work taking place in New Anglia is based on the projects contained in the Glenigan database. This contains details of the planning applications from local authorities. Glenigan supplements this with additional project-specific data. The Glenigan database does not identify every single project in an area as some small projects (typically but not exclusively those less than 250,000 in value) and those which do not require a planning application (including repair and maintenance) are not included. An initial assessment of the projects in the database ensured that only projects which had a) a defined value and b) defined start and end dates were considered in the analysis. Also excluded were two consultancy projects 2 and a number of projects (16 in total) which were clearly identified as duplicates. A full set of the projects which were omitted from the analysis are shown in Appendix D. Values given in the Glenigan database are the total value of construction and engineering works. The scope of this study is limited to the construction sector and where appropriate an estimate of the engineering value has been made and removed from the total value to provide what we have termed the construction value. Included in the Glenigan pipeline are two projects related to the Sizewell C nuclear new build site. These are large, one off projects, which warrant special consideration in understanding the construction labour market in the LEP area. The labour demand figures and timeframe of the Sizewell C project used in the report were provided by the Nuclear Energy Skills Alliance (NESA). 1 A methodological note on the LFT is provided in Appendix A 2 The LFT calculates the demand for professional occupations from a project s construction value. To include consultancy projects separately would result in double counting 4

11 Table 1: Details of large projects Project Area Construction Value ( m 2015 values) Proportion of total Glenigan Construction spend Sizewell C Power Stations - Contract 1 Suffolk 5, % Sizewell C Power Stations - Contract 2 3 Suffolk 1, % The Mean Value Theorem 4 was applied to the remainder of the pipeline for Norfolk and Suffolk separately, excluding the two Sizewell C projects in Table 1, to identify the significant projects in the LEP. This process identified 61 significant projects in Norfolk and 74 in Suffolk, in both cases accounting for over 70% of the construction spend in each respective county. This allowed a detailed analysis of a large proportion of all the projects and a comprehensive consideration of the project types to which they were assigned. Table 2 shows the number of significant projects within each county and the percentage of spend per area arising from the significant projects. The total spend per area can also be seen. The construction spend shown in this table takes account of any adjustments for engineering works and any incomplete, duplicate or consultancy projects. Values are shown in 2015 prices as this was provided in the Glenigan database. Table 2: Breakdown of the significant project and total values in the LEP, as captured in Glenigan 5 Norfolk Areas Suffolk Total (New Anglia LEP) Total number of projects Construction spend ( m 2015 values) 3,741 2,135 5,876 Number of significant projects Construction spend in significant projects ( m 2015 values) Percentage of construction spend in significant projects 2,868 1,721 4, % 80.6% 78.1% Some of the projects within the Glenigan database have elements that cover more than one area. Elements of the UK-wide Social Infrastructure Development (SID) framework are taking place within the New Anglia LEP. These were estimated to be proportional to the population of the Norfolk and Suffolk counties relative to the UK s total population. A maintenance and works framework taking place in Norfolk and the surrounding counties was broken down proportionally to each county s population and the appropriate elements were used for the analysis in Norfolk and Suffolk. A construction framework comprising works in the East of England region was broken down into the 3 Glenigan lists two separate contracts for Sizewell C 4 The Mean Value Theorem states that most information is obtained for least effort simply by considering only those data whose annual construction spend is higher than the mean. This approach is used to identify the few significant values that account for the largest amount of expenditure. 5 The values in this table are the values from the Glenigan database to which the construction element percentage has been applied and thus reflect the adjusted values of the infrastructure projects to distinguish between construction and engineering construction. 5

12 counties of East of England in proportion to their population and the appropriate elements for Norfolk and Suffolk were used in the analysis. The labour demand for all of the projects in the Glenigan database was produced using the Labour Forecasting Tool. The following input data was used to produce the forecasts. The value of each project in the pipeline provided in the Glenigan database, for all projects excluding infrastructure. As noted previously for infrastructure projects, the value used was a percentage of the value in the Glenigan database, representing the construction portion of the value, excluding engineering construction. The percentages applied can be seen in Table 3. The construction proportions have been validated in work we have undertaken for other clients. Start and end dates of each project provided in the Glenigan database. For the significant projects, project descriptions in the database enabled us to apply the most appropriate project type (each type is driven by a different underlying model) to each forecast that was run through the LFT. Cases where a project consisted of more than one type were broken down into multiple forecasts that were assigned specific project types to more closely predict the labour demand. This took account of the different types of work within a single project, e.g. mixed developments comprising housing, commercial and industrial. For the rest of the projects, the default project type allocation as defined in the Glenigan database was applied, except for the infrastructure projects which were individually allocated to the most appropriate type from the available LFT infrastructure types. Table 3: Proportion of total value related to construction Sector Proportion of construction activity Flooding 90% Science & Research 100% Roads 100% Airports 100% Ports 90% Stations (Underground/Network rail) 80% Mixed Rail (Track, stations, E&P etc.) 55% Bridges 100% WTW/WTWW 90% Generation (Renewables Offshore) 20% Generation (Renewables Onshore) 10% Biomass 50% Undefined Energy 40% Nuclear Decommissioning 60% Photovoltaics 80% Gas Transmission/distribution 30% General Infrastructure 100% 6

13 Appendix C provides a full breakdown of the significant projects and their construction values. The significant projects locations can be seen in Figure 1. The radius of the markers are in proportion to the value of the project. Figure 1: The significant projects in Glenigan used in this analysis Table 4 lists the top 20 significant projects, by value, taking place within the LEP in the period The data relating to all of the projects has been stored in the version of the LFT for which the LEP will have a licence. All the assumptions regarding the input parameters - including project duration and values - can be updated by the LEP as and when more specific information becomes available. The forecasts have been saved within the LFT for access by the LEP and any changes to scope (including updates to the construction value) can readily be made Breakdown of spend by project type This section provides an overview of the development spend ( m 2015 values) in the LEP broken down by project type based on the projects included in the Glenigan database. Table 5 shows the construction spend for each sector. It is clear that housing accounts for some 40% of the construction spend. Infrastructure accounts for around a third of the spend and is particularly driven by offshore wind in Norfolk which accounts for more than 60% of the infrastructure spend in the New Anglia LEP, as can be seen in Table 6. Public non-housing projects account for almost 15% of the spend. 7

14 Table 4: List of 20 significant projects Number Description Local Authority Value ( m 2015 values) Start Date End Date Project Type 1 Offshore Wind Farm Norfolk /04/ /04/2020 Infrastructure 2 5,000 Eco Homes Norfolk /10/ /10/2021 New Housing 3 Offshore Wind Farm Norfolk /04/ /04/2019 Infrastructure 4 Minor/Major/Maintenance Works Framework Norfolk /04/ /04/2019 Public Non-housing 5 Wind Farm Development Norfolk /04/ /01/2020 Infrastructure 6 Offshore Wind Farm Norfolk /08/ /08/2019 Infrastructure 7 Offshore Wind Farm Norfolk /06/ /06/2019 Infrastructure Residential Units Development Partner Norfolk /07/ /07/2019 New Housing 9 Biomass Power Plant Norfolk /03/ /05/2017 Infrastructure 10 Social Infrastructure Framework Norfolk /04/ /04/2019 New Housing Houses/Flats/School/Village Hall/Shop Units Norfolk /03/ /03/2017 New Housing Residential Units/1 School & Commercial Units Norfolk /12/ /06/2016 New Housing Residential Units/1 School & Commercial Units Norfolk /08/ /07/2019 Private Commercial 14 CCGT Power Station Norfolk /06/ /12/2019 Infrastructure 15 Centre for Food & Health Norfolk /01/ /07/2018 Private Industrial 16 Solar Photovoltaic Array Norfolk /02/ /11/2015 Infrastructure Residential Units & 1 School/Local Centre Norfolk /10/ /09/2018 Private Commercial 18 Commercial Units Norfolk /09/ /09/2017 Private Industrial 19 Council Office (Refurbishment) Norfolk /03/ /05/2016 Public Non-housing 20 Junction (Improvements) Norfolk /04/ /04/2017 Infrastructure 8

15 Table 5: Construction spend per sector for the period Sector Construction spend in the period (2015 values - m) - Norfolk % of total - Norfolk Construction spend in the period (2015 values - m) - Suffolk % of total - Suffolk Construction spend in the period (2015 values - m) - New Anglia LEP % of total - New Anglia LEP New Housing 1, % % 2, % Infrastructure 1, % % 1, % Public Non-residential % % % Private Commercial % % % Private Industrial % % % Non-housing R&M % % % Housing R&M % % % Total 3, % 1, % 5, % 9

16 Table 6: Construction spend per infrastructure sub-sector for the period Infrastructure sub-sector Generation (Renewables - Offshore) Construction spend in the period (2015 values - m) - Norfolk % of total - Norfolk Construction spend in the period (2015 values - m) - Suffolk % of total - Suffolk Construction spend in the period (2015 values - m) - New Anglia LEP % of total - New Anglia LEP 1, % % 1, % Undefined Energy % % % Photovoltaics % % % Biomass % - 0.0% % Roads % % % Stations (Underground/Network rail) % - 0.0% % Ports % % % Flooding % % % WTW/WWTW % % % General Infrastructure % % % Science & Research % - 0.0% % Airports % - 0.0% % Bridges - 0.0% % % Generation (Renewables - Onshore) Nuclear Decommissioning Mixed Rail (Track, stations, E&P etc) % % % - 0.0% % % - 0.0% % % 10

17 Table 6: Construction spend per infrastructure sub-sector for the period Infrastructure sub-sector Gas Transmission/distribution Construction spend in the period (2015 values - m) - Norfolk % of total - Norfolk Construction spend in the period (2015 values - m) - Suffolk % of total - Suffolk Construction spend in the period (2015 values - m) - New Anglia LEP % of total - New Anglia LEP % - 0.0% % Total 1, % % 1, % 11

18 Producing estimates of labour demand Based on the analysis of the Glenigan database this section presents the labour demand arising within the LEP. Additional detail is shown in Appendix E. The data in the Glenigan database presents a picture of the forthcoming projects. As the time horizon extends there is less clarity on what is planned. For instance, in some cases a small number of projects are due to complete in the 2020s. However, the small workload shown by the demand profile is highly unlikely to reflect the total amount of work that will take place at that time. It is almost certain that there will be additional projects that come on stream at that time that have not yet been considered. The CSN forecasts, which consider the availability of labour, look forward five years. For consistency we have presented the demand forecasts for the five year period used in the CSN model. Labour demand figures have been rounded to the nearest 50. Figure 2 shows the construction labour demand arising from the Glenigan data for the period in the LEP. It should be noted that the workforce will only peak for a relatively short period of time. The ramp up and ramp down to that peak may be quite large. We have therefore presented the average workforce during the year of the peak. Table 7 shows the labour demand arising from the entire pipeline of projects, as well as the portion of this demand within the period. It also shows the peak workforce requirement of around 39,000 people occurring in As noted above the drop off, and indeed the ramp up, of projects from an analysis of a pipeline is somewhat artificial. An approach to overcome this has been applied to the analysis. The approach uses the assumption that the future workforce is approximately equal to the peak. The peak has, therefore, been projected forward and backcast 6 to create a more likely scenario of the ongoing workforce. The growth rate is based on the CSN employment forecast for the whole East of England region. The demand with an employment growth rate included is shown in Figure 2. The shaded area shows the likely total labour demand arising from as yet undefined projects. For the peak year we have shown a detailed breakdown by each of the 28 occupational groups for which the forecast has been produced. These are shown in Figure 3. The projections of labour demand for the trades occupations for the peak year of 2016 are as follows. The trade occupation displaying the highest demand is wood trades and interior fit-out peaking at 4,200 people; general labourers follow with 2,400 people; plumbing and heating, ventilation and air conditioning trades rank third with 2,300 people; electrical trades and installation come next, with around 2,250 people demanded. All other trades display a demand of less than 2,000 people each. 6 This takes account of the fact that the 2015 Glenigan figures which are tailing off and are past their peak than those in

19 Table 7: Total labour demand in the LEP (excluding mine and offshore) Area Total Person-Years Person-Years % of total demand in Average workforce during year of peak Norfolk 62,600 57, % 20,650 Suffolk 37,800 34, % 18,350 New Anglia LEP area 100,400 92, % 39,000 13

20 Figure 2: Total Construction labour demand arising from the Glenigan data for the LEP including projected growth (excluding Sizewell C) 14

21 Figure 3: Construction labour demand arising from the Glenigan Pipeline by occupation in the peak year 15

22 Breakdown of labour demand by project type The labour demand has been calculated from the spend in each project type. In this section we have considered the total labour demand. The peak workforce in 2016 is around 39,000. Figure 4 shows the breakdown of labour demand by project type. For the peak year (2016) it can be seen that more than half of the labour is generated by housing. This is due to the nature of housing work, which tends to be more labour intensive than other types. Towards the end of the five year period there is a rampup in infrastructure and particularly energy. This is driven primarily by offshore wind projects in Norfolk. Figure 4: Construction labour demand arising by sector and sub-sector Sizewell C nuclear power station The Sizewell C Nuclear New Build plant-related projects have been estimated at a total construction value of 6bn (based on a Glenigan total project value of 12bn, which includes an engineering construction element estimated from previous work to be 50% of the total value). The labour demand arising from this development will account for a large additional demand in the local authorities in proximity to Suffolk, including Norfolk and other neighbouring counties. For the purposes of this analysis we have consulted directly with EDFE, but have relied on data that is in the public domain. The data we have used has not been confirmed by EDFE. Stage 2 of the EDFE consultation is yet to start and this analysis should be updated in collaboration with EDFE once that process has commenced. The current estimated timescale for the main civils works of Sizewell C is For the purposes of the demand arising from the Sizewell C work we have used the labour demand figures produced by the Nuclear Energy Skills Alliance (NESA). The NESA analysis shows a peak workforce of almost 4,200 construction people in 2024 for Sizewell C. This analysis is broken down by occupation and these have been mapped to the relevant 28 occupational groups used by CITB. It should be noted that this is an annual average construction workforce demand. It does not include the operations or engineering construction workforce. In their consultation document, EDFE forecast

23 a total monthly peak workforce of 5,600 people 8. From the data available to us, a construction workforce of 4,200 is not inconsistent with a total workforce of 5,600. We have aggregated the monthly demand across the New Anglia LEP into annual figures and superimposed the demand arising from Sizewell C. For clarity we have presented the forecasts in this section over a 14-year period to coincide with the predicted construction programme of Sizewell. This is shown in Figure 5 with a continued employment rate projected at levels. At peak the Sizewell work accounts for a workload equal to roughly 9.3% of the demand arising from the Glenigan pipeline in the New Anglia LEP. Table 8 shows the impact of Sizewell C as a proportion of the peak workforce from the projects in Glenigan in the Norfolk and Suffolk. This has been projected forward assuming that the growth rate from continues into the next decade at the same rate. It shows that the Sizewell C workforce accounts for up to around 9.3% of the workforce working on the Glenigan pipeline of projects in the New Anglia LEP area. Figure 5: Construction labour demand of the Sizewell C development compared to the rest of the demand in the New Anglia LEP

24 Table 8: Comparison of labour demand arising from Sizewell C to the New Anglia LEP Sizewell C labour demand (number of people) Labour demand in the New Anglia LEP (number of people) Sizewell C Labour Demand as a percentage of peak demand (39,000 people) in the New Anglia LEP areas , % , % , % , % , % , % , % ,150 41, % ,100 42, % ,200 42, % ,600 43, % ,350 44, % ,150 44, % , % Assessing the wider demand within New Anglia Methodology and assumptions The Glenigan database has two characteristics that prevent the results from providing the entire labour demand profile for the area: It does not record all smaller projects (roughly those of less than 250,000 value). It records mainly new build projects and with only a small amount of repair and maintenance works included. These two issues could have an effect on the calculated labour demand and produce lower figures than expected. We have developed a methodology to provide a complete picture of the labour demand. The following steps are undertaken to provide an estimate of the total labour demand across a region. 1. Only the new build projects arising from the Glenigan database were run through the LFT, excluding any repair and maintenance work. 2. To estimate the full amount of new build work not captured in Glenigan we compared the total Glenigan new build spend in the region (East of England) with the output estimates for the CSN for the peak year, This allowed us to estimate the new build spend for the entire region not included in the Glenigan database from which we could then factor the corresponding output for the New Anglia LEP area. 18

25 3. The non-glenigan new build spend calculated in the previous step was assigned to different sectors, reflecting the mix of works recorded in Glenigan for New Anglia. A separate item was created for each construction sector (e.g. general infrastructure, housing) and assigned a value proportional to each sector s contribution to the pipeline spend in Glenigan. 4. To calculate the R&M elements of work taking place within the LEP, the CSN output data was used to calculate the ratio of R&M to new build work in the East of England. We assumed this ratio to be constant throughout the region. 5. The LFT was used to calculate the labour demand profile based on the values of different types of work estimated above. 6. Labour demand for 2016 was then projected forward and backcast as required throughout the period analysed. For this process we used the construction employment growth factors applied previously to the known projects Updated labour demand calculations and projections Table 7 shows the labour demand arising from the entire pipeline of projects including the allowance we made for R&M amounting to 96,350 people in 2016, the peak year of Glenigan data, including the allowance made for R&M. The demand is shown in Figure 6. The total labour demand rises from 93,250 people in 2015 to a peak of 98,700 people in Table 9: Total labour demand in the New Anglia LEP area Area Glenigan labour demand Undefined potential projects labour demand Average workforce during 2016 Norfolk 57, ,450 51,650 Suffolk 34, ,950 44,650 New Anglia 92, ,400 96,350 19

26 Figure 6: Total construction labour demand including estimate for R&M and projects not in the Glenigan database 20

27 Neighbouring regions This section provides an overview of the large projects and related developments and frameworks that are current or are scheduled to begin within the next five years in the four counties in close proximity to the New Anglia LEP: Essex, Cambridgeshire, Peterborough and Lincolnshire. The Mean Value Theorem was applied twice to identify the significant projects measured by their average annual spend in Glenigan. Table 10 presents the spending profiles of these projects. Values are given in 2015 values. 21

28 Table 10: Significant projects in neighbouring areas Number Description Local Authority Construction Value ( m 2015 values) Average Annual Spend ( m 2015 values) Start Date End Date Project Type 1 9 Eco Towns Masterplan Cambridge /07/ /12/2015 New Housing 2 Road Improvement Scheme East Cambridgeshire 1, /11/ /11/2019 Infrastructure 3 Road Improvement Scheme Huntingdonshire /11/ /11/2018 Infrastructure 4 Road Improvement Scheme Cambridge /10/ /10/2017 Infrastructure Residential/Schools/Care Home/Commercial Units South Kesteven /11/ /12/2016 Private Commercial 6 Residential & Commercial Peterborough /04/ /04/2020 New Housing 7 Water/Wastewater Integrated Main Works Capital Framework Peterborough 3, /04/ /04/2030 Public Non-housing 8 5,015 Residential/Commercial Units Huntingdonshire /07/ /09/2016 New Housing 9 Water (Maintenance) Peterborough /11/ /11/2018 Infrastructure 10 Roads (Framework) Cambridge /04/ /04/2020 Infrastructure Houses/Flats/Schools/Commercial Units Cambridge /11/ /12/2016 New Housing Residential & Commercial Units Uttlesford /08/ /08/2015 New Housing 13 Energy Park Peterborough /08/ /08/2018 Infrastructure 14 4,005 Residential/Commercial Units Cambridge /09/ /06/2016 Private Commercial Houses/Flats/Student Accommodation/Commercial Units Cambridge /07/ /08/2016 New Housing 16 Capital Works (Framework) Colchester /09/ /09/2019 Public Non-housing 17 Hospital Redevelopment Cambridge /07/ /11/2016 Public Non-housing 18 5 Research & Development Buildings Cambridge /04/ /02/2017 Private Industrial 22

29 19 Airport (Refurbishment) Uttlesford /10/ /10/2015 Infrastructure 20 Offshore Wind Farm East Lindsey /01/ /01/2022 Infrastructure Residential/Care Home/School/Commercial Units Maldon /07/ /08/2017 New Housing Residential Units & Commercial Land Huntingdonshire /11/ /03/2024 New Housing 23 5 Warehouse & Distribution Units Peterborough /08/ /08/2017 Private Industrial Houses/Flats & 3 School/Industrial & Local Centre Maldon /01/ /02/2017 New Housing Houses/Flats South Holland /08/ /09/2016 New Housing 26 Solar Photovoltaic Farm North Kesteven /03/ /12/2017 Infrastructure 27 Hospital Cambridge /03/ /02/2018 Public Non-housing Houses/Flats Cambridge /08/ /09/2016 New Housing Homes & 6 Commercial Units Uttlesford /06/ /07/2017 Private Commercial Residential/Commercial Units (New/Conversion) North Kesteven /01/ /01/2017 New Housing 31 Housing (External Works Programme) Harlow /06/ /06/2016 New Housing 32 Power Station (Expansion) South Holland /07/ /06/2023 Infrastructure Industrial/Office/Distribution & Storage Units Braintree /04/ /10/2016 Private Industrial 34 3,500 Homes, Commercial Units & 3 Schools Cambridge /11/ /11/2021 Private Commercial Houses/Flats & 1 School/1 Enterprise Centre Braintree /06/ /07/2017 New Housing 36 Shopping Centre (Extension/Refurbishment) Peterborough /08/ /03/2017 Private Commercial 37 Junction (Improvements) Chelmsford /12/ /07/2015 Infrastructure 38 Trunk Road (Dualling) Colchester /05/ /05/2024 Infrastructure 23

30 39 Contractors Framework Agreement Basildon /09/ /08/2018 New Housing 40 Bypass Lincoln /02/ /02/2018 Infrastructure 41 Multi Storey Car Park Uttlesford /07/ /07/2017 Infrastructure 42 Key Worker Accommodation Huntingdonshire /01/ /04/2017 New Housing 43 Industrial & Commercial Development Castle Point /11/ /05/2016 Private Industrial 24

31 Summary of demand The analysis of the labour demand arising from the development spend in the New Anglia LEP peaks at around 39,000 people in The tail off beyond this point is not likely to represent an actual drop off in construction activity but reflects projects that have not yet been identified. It should also be noted that these figures only represent the developments that are included in Glenigan, which will not necessarily capture all of the construction activity. To project forward this cliff edge in construction activity we have produced an indication of how construction activity in the region (East of England) as a whole is forecast to change over the next five years. This shows a constantly increasing construction spend and activity rising to almost 40,000 by The labour demand is split in roughly equal proportions between Norfolk and Suffolk. In the short-term, construction activity in the area is dominated by housing, with public nonresidential and infrastructure activity also comprising significant parts of the total spend, the latter mostly owing to offshore wind installations in Norfolk. The largest occupational group is wood trades and interior fit out, with a large labour demand arising from non-manual occupations. The analysis was extended to include the work planned for Sizewell C Nuclear New Build, commencing in The demand figures from NESA were used for the analysis and superimposed on the demand in the East of England region, assuming that for the years beyond 2019, a steady yearly increase of 1.4% will be observed in the employment, equal to the average yearly increase for the period predicted by the CSN. It shows that across the two counties the peak demand at Sizewell accounts for up to almost 10% of the rest of the workload. Should there be any changes in timescales to the works then the increased demand will be delayed. By supplementing the Glenigan pipeline with the data provided by the projections of non-glenigan new build and R&M work, we were able to produce a labour demand analysis that represented the wider construction work taking place within the New Anglia LEP area in the period incorporating the projected growth of the sector. According to these projections, the total labour demand will rise to a number of around 98,700 people in

32 A picture of supply When looking at the supply of workers there are two main elements to consider: the size of the current workforce and the existing amount of training. The first element of this section takes a view on the current employment levels for the New Anglia LEP, how this is made up from the local authorities of Norfolk and Suffolk, and then how this relates to overall employment across the East of England Region. Data from CITB s Construction Skills Network is used along with official Government sources. For the second section, while training occurs at Further Education (FE) and Higher Education (HE) levels, the focus will be on FE that takes place in the New Anglia LEP and wider East of England Region. FE tends to be sourced and delivered in a closer proximity to home and workplace, whereas the length of study time and specialisms for Universities for HE can give greater degrees of mobility. The demand forecasts can then be compared against employment, training and workforce mobility to give an indication of possible gaps and/or occupational pinch points. Main points Current construction workforce estimates for the East of England are just over 247,000 workers. New Anglia LEP accounts for 24% of the East s current construction employment (approx. 59,500 workers). Within the LEP construction employment is fairly evenly spread between the counties of Norfolk and Suffolk (25,700 in Norfolk and 23,400 in Suffolk). Construction businesses are also fairly evenly split between Norfolk and Suffolk with 3,885 in Norfolk and 3,485 in Suffolk, and the size profile of these employers is the same across both counties with the overwhelming majority (over 93%) being micro sized companies (0-9 employees) in both. There were just under 5,600 Construction and Building Services Engineering learning aims delivered in the LEP area, accounting for 6.5% of the total number of learning aims in 2012/13 9. Twenty-eight training providers delivered construction relevant FE courses within the LEP area, with the six main providers delivering almost two-thirds (64%) of all FE Construction and Building Services Engineering learning. 9 Note: a leaner can have multiple learning aims depending upon the nature of the course learning. 26

33 Existing workforce Construction employment across the UK suffered significant declines during the recent recession, and the East was no exception as shown in Figure 7 below. Employment in the region increased steadily from just under 213,000 in 2002 to over 262, The recession saw a steep fall in this figure to a low of 226,600 workers two years later in 2010 before beginning to recover. By 2014 the number of construction workers in the region had climbed to over 242,250, and the current CSN forecast is for continued employment growth to just over 256,000 in 2019, although this will still be below its 2008 peak. Figure 7: Construction employment in the East of England: (Source: Experian & CITB) An analysis of the Annual Population Survey 10 gives an indication of the share of Eastern England s construction workforce located in the LEP. The latest data shows that the LEP area accounts for 24% of regional construction employment, Table 11 below shows what this means for total employment at occupational and industry level in the LEP region. 10 ONS/NOMIS (2015) Annual Population Survey workplace analysis by industry Jan-14 to Dec

34 Table 11: Construction occupational breakdown, 2015 (Source Experian & CITB) Occupation New Anglia LEP East of England Senior, executive, and business process managers 3,370 14,050 Construction project managers 1,100 4,590 Other construction process managers 3,990 16,610 Non-construction professional, technical, IT, and other office-based staff 8,450 35,200 Construction trades supervisors 1,380 5,730 Wood trades and interior fit-out 5,970 24,870 Bricklayers 1,940 8,090 Building envelope specialists 2,470 10,280 Painters and decorators 2,450 10,210 Plasterers 1,340 5,590 Roofers 940 3,920 Floorers 860 3,580 Glaziers 680 2,830 Specialist building operatives nec* 970 4,050 Scaffolders 650 2,700 Plant operatives 850 3,550 Plant mechanics/fitters 670 2,780 Steel erectors/structural fabrication 460 1,920 Labourers nec* 2,850 11,890 Electrical trades and installation 4,650 19,360 Plumbing and HVAC Trades 3,800 15,820 Logistics 720 3,020 Civil engineering operatives nec* 260 1,100 Non construction operatives 390 1,620 Civil engineers 1,760 7,350 Other construction professionals and technical staff 3,930 16,380 Architects 1,280 5,330 Surveyors 1,190 4,950 Total 59, ,370 *nec not elsewhere classified Sub-regional analysis shows that in the New Anglia LEP area the construction workforce is more or less evenly split between Norfolk and Suffolk (52% and 48% respectively), although there is considerable difference in the levels of self-employment between Norfolk and Suffolk with over half 28

35 the construction workforce in Norfolk being self-employed (51%) while just over one-third (35%) of the Suffolk workforce is self-employed. Employer Structure Analysis of construction firms reveals that just under a quarter (23%) of all construction firms within Eastern England are located in the LEP area. As with employment, the number of employers are fairly evenly split between Norfolk and Suffolk (53% and 47% respectively). Overall the pattern of firm size is similar in each county, as shown in Figure 8, with just over 93% of firms being micro (employing fewer than 10 people). There are five large employers (with more than 250 employees) in the New Anglia LEP area, although the numbers are too small to identify them any further than this. Figure 8: Construction firms by size, 2014 (Source: ONS/NOMIS) Training provision In terms of delivering skills to the construction workforce, further education providers play a significant role in equipping people with vocational skills for all sectors of UK business, and for construction in particular. Data available at local authority level produced by the Skills Funding Agency 11 shows that in Further Education learner volumes, Norfolk and Suffolk accounted for just under 69,840 learners which represents 25% of total provision in the East of England (all learners, all sectors). 11 Skills Funding Agency (2014) Overall FE and Skills Participation by Level and Age and by Region, Local Education Authority and Local Authority (2005/06 to 2013/14) Learner Volumes. 29