Humber LEP and the Labour Forecasting Tool exploring transformational projects

Transcription

1 and the Labour Forecasting Tool exploring transformational projects Prepared by Sandra Lilley & Doug Forbes 26 April 2013 If you have any queries regarding this report please contact Mrs Sandra Lilley, Commercial Strategy Manager

2 Introduction Following a series of discussion s and a subsequent proposal submitted by CITB-ConstructionSkills to the Humber LEP, CITB-ConstructionSkills and Whole Life Consultants Limited were commissioned to explore the skills requirements of the Humber Transformational Projects. This would seek to provide details on how targeted market intelligence and detailed labour forecasting on individual projects could provide a further evidence base to enhance the recent analysis undertaken related to Skills Research in Humber LEP report produced in August Objectives The objectives of this commission were to: Understand what occupations would be required across a range of transformational projects as identified in the report above Demonstrate that the Humber LEP is pro-active in terms of identifying demand Demonstrate an investment in research and development to ensure that the future evidence base produced by the Humber LEP is fit for purpose Utilise evidence provided by the report in leveraging further investment funding Utilise the evidence based produced in future skills and employment related campaigns which are targeted at ensuring the right supply base is in place and that the right training interventions are commissioned through local training providers Have a sound evidence base upon which to plan and potentially seek partnering opportunities, working with local education providers and local industry Use the evidence base to demonstrate a further investment in young people in the Humber LEP region and its surrounding catchment area Understand the end user capacity of projects once completed and consider the impact of transformational projects in related supply chain areas Be leading edge as a Local Enterprise Partnership by demonstrating a sound understanding of the future marketplace and promote and communicate that to LEP partners through targeted events Match demand with any supply evidence, where possible and make recommendations in terms of any skills gap analysis Project Analysis The research undertaken used the Labour Forecasting Tool to develop a profile of likely labour requirements in the Humber. To create this profile we have used the Labour Forecasting Tool (LFT). The tool creates a bottom up approach to skills forecasting by aggregating the employment from individual projects to create a Humber area profile. The Labour Forecasting Tool can predict labour requirements (ie number of operatives and managers) on a month-by-month and trade-by-trade 1

3 basis given no more than the type of project, its value or gross floor area where appropriate, its location and its start and end dates. It can also be used to define the total number of end-users required once a building is operational. This will provide an overview of the employment profile by seven construction sectors. Construction employment is broken down by 26 occupation groups. End-users are presented as a single occupation broken down by nine sectors. These are shown in Appendix A. To allow the bottom up approach to be determined it is necessary to understand the characteristics of projects within the Humber Region. The starting point for this work was the Transformational Projects referenced by Eskogen and Partners in a document entitled Skills Research in the Humber LEP published in August Specifically, this would focus on the development of forecasts for the two Enterprise Zones at Humber Renewable Energy Super Cluster and Humber Green Port Corridor. However, on closer inspection it was discovered that there was insufficient detail developed in relation to the majority of these projects to allow the skills needs to be developed at a detailed level. An alternative approach was therefore developed and agreed with the Humber LEP. The mean value theorem allows data to be analysed to identify the most amount of information can be obtained. We used this approach to determine the significant projects in the Humber by applying the double mean value theorem to all of the projects in planning in the region. By doing so, we have been able to identify the 19 significant projects by value. These are the 19 projects (out of 417) which account for 3.82bn of spend (out of 5.84bn). This therefore means that by creating labour forecasts for the 19 projects it is possible to look at 65% of the construction spend. These 19 significant projects are shown in Table 1 along with the indicative start and end dates which are available. The status of the projects are based on information provided by the Humber LEP. These are Certain the project is going again; Potential there is a possibility that the project will not proceed; and Cancelled - the project is not proceeding. Table 1: List of 19 significant projects Description County Value ( m) Start Date End Date Status Renewable Energy Plant Gas Storage Facility North Lincolnshire East Riding of Yorkshire Framework (Refurb/Extensions) East Riding of Yorkshire May May-16 Potential Jan Jan-16 Certain Dec Dec-15 Certain 2

4 Description County Value ( m) Start Date End Date Status Gas Fired Power Station Road Improvements Turbine Factory Road Improvements Marine Energy Park Bioethanol Production Facility Waste to Energy Energy Centre Cinema, Hotel, College & Commercial North Lincolnshire North East Lincolnshire Kingston upon Hull Kingston upon Hull North East Lincolnshire North East Lincolnshire Kingston upon Hull North East Lincolnshire East Riding of Yorkshire 389 Flats/9 Commercial Units Kingston upon Hull Renewable Energy Plant Commercial Units 813 Residential & Commercial Units Residential/Commercial Development Riverside Berth Facility Wind Farm North Lincolnshire North Lincolnshire East Riding of Yorkshire North Lincolnshire Kingston upon Hull North Lincolnshire Jul Jul-19 Certain Jun Jun-20 Certain Nov Sep-15 Certain Jan Jan-20 Potential Feb Feb-15 Certain Dec Dec-14 Certain Jun Jun-16 Certain Jun Jun-16 Certain Feb Nov-15 Certain Mar Mar-16 Potential Nov Nov-14 Cancelled Jun Jun-16 Certain Feb Mar-17 Certain May May-22 Certain Jan Jun-15 Certain Nov Nov-14 Certain High level analysis: Construction The outputs of the bottom up analysis of the significant projects are shown in Figures 1, 2 and 3 for the certain and potential projects and Figures 4,5 and 6 for the certain only projects. Figures 1 & 4 break down the skills requirement by total per significant projects. Figures 2 & 5 shows the data identified by each of 26 occupational groups and Figures 3 & 6 depict the end-user employment combined with the total construction employment. For clarity purposes the raw data which was 3

5 used to create the charts will accompany this report as a spreadsheet file. The project which have been cancelled has been removed from the analysis. Figure 1: Construction Skills Requirements by Significant Project (Certain & Potential Projects) 4

6 Figure 2: Construction Skills Requirements by Occupation (Certain & Potential Projects) 5

7 CITB-ConstructionSkills & Whole Life Consultants Limited Figure 3: Construction and End User Skills Requirements for Significant Potential Projects) Projects (Certain & Figure 4: Construction Skills Requirements by Significant Project (Certain Projects) 6

8 Figure 5: Construction Skills Requirements by Occupation (Certain Projects) 7

9 CITB-ConstructionSkills & Whole Life Consultants Limited Figure 6: Construction and End User Skills Requirements for Significant Projects (Certain Projects) High level analysis in relation to supply and addressing any potential skills gap Obtaining robust data in relation to specific occupations in construction in terms of the supply of new entrants is extremely challenging. Data is collected by the Skills Funding Agency (SFA) and available at amalgamated local authority level. Figure 7 provides the most recent data available for the four main local authority areas of East riding, Kingston upon Hull, North Lincolnshire and North East Lincolnshire. 8

10 Recent data published by the Construction Skills Network 1 for the region gives a clear indication that based on required demand and industry churn there are no specific occupations in the short to medium term (2013 to 2017) that are likely to experience a large skills gap, although there are indications that the occupations demonstrating the highest recruitment requirement are construction managers, wood trades and interior fit-out, bricklayers, floorers, labourers and civil engineers. This evidence is based on known information relating to new orders and output data (collected by the Office of National Statistics) therefore the demand requirement for the top 20 Humber LEP projects which may or may not go ahead could not yet appear embedded in the CSN forecasts particularly those that go beyond Figure 7:Enrolments, Starts and Achievements by Delivery Postcode and Sector Lead Bodies 2010/11: Construction Sector Lead Body: Humber LEP Intermediate Level Apprenticeship s Apprenticeships Advanced Level / Higher Apprenticeship s Education & Training Level 2 excl SfL Leve l 3 Total Workplac e Learning Under 19 FE & Skills 19+ Total Enrolments ,030 1,520 2,050 2,160 4,200 Starts ,950 1,280 1,810 1,770 3,570 Achievements , ,260 1,370 2,620 It is also worth noting that the 26 occupational groups represent 144 occupations and it is worth exploring what underpins each group in order to understand further some of the very specialised occupations (for example those associated with the renewable energy sector) that may need to be focussed on in the Humber LEP, whether they are home grown or imported even in the short term. Figures 8 is an amalgamation of the top 19 project in terms of the collective demand by occupational group. Given the lack of tangible data around supply and in particular the forecasting of supply and required training interventions it is important to utilise the information we have in relation to demand. However this should be used as indicative evidence for forecasting and planning purposes and as project evidence become more robust and realistic further forecasts can be run through the Labour 1 CSN data for Yorkshire and the Humber 2013 to 2017, Labour Market Intelligence 9

11 Forecasting Tool to explore the peaks and troughs of labour requirement by occupation on a project by project basis. It should also be borne in mind that the projects will be phased between 2013 and 2021 and therefore the occupational requirement will be spread over that period. Figure 1 and 2 in this report demonstrate the project requirement in terms of people and occupational requirement and it is important to view this information in terms of when demand will be at peak (mid mid 2015 and again mid 2018). Figure 8: Humber LEP Total months employment by occupational group: 19 Humber Projects Starting with the occupations that have the highest numerical level of demand over the lifetime of the project forecasts we have wood trades and interior fit-out and non- construction workers. The wood trade group is typically an occupational group with a high level of recruitment requirement as 10

12 borne out in the CSN forecasts described above. Interestingly the non-construction group warrants further observations as this group contains all the non-site workforce that form the wider supply chain. Examples of occupations found in this group are IT professionals, finance, legal, consultants, local government, marketing and secretarial support. There is also significant demand for construction managers and this occupational group covers not just directly related construction managers but production, waste, transport, mining and energy managers who all work within the construction footprint. Plumbing, heating, ventilation and electrical related trades also feature strongly across the projects and this would be fairly typical given the specialised nature of the work they do. Another area that strongly warrants further investigation is the demand for other construction professional and technical staff and this occupational group includes a wide range of engineers and technicians including mechanical, electrical, chemical, design, planning and production and process engineers that all sit outside the footprint of traditional civil engineers. Whilst it is impossible to predict exact occupations where skills gaps will be, the evidence emerging above points to the occupational group that contain very specific occupations (and in some cases very specialised occupations) that should be high-lighted as a priority regarding planning in relation to supply and the provision of training. Workforce Mobility The flow of labour into and out of a region can have a significant impact on its trained and specialised workforce. This flow is described as inter-regional mobility and a study by CITB- ConstructionSkills completed in June provides a good indication of geographic flows for the Humber LEP area. Overall nearly 5,000 face to face interviews took place across the UK and 399 were conducted with construction workers across Yorkshire and the Humber 3. In the Humber LEP area 99% of workers interviewed were male and 16 to 24 year olds accounted for 20% of those workers interviewed. The most common occupation of interviewees was general operative at 24% but this encompasses a range of occupations including ground-workers. 65% of workers interview were directly employed and the remaining 30% were self-employed with 5% employed through an agency. 77% of workers interviewed in the region had never worked outside of construction, mostly without period of unemployment and only 3% of those surveyed had experienced periods of unemployment. In the region 23% of workers had undertaken more than one type of construction 2 Workforce Mobility and Skills in the UK Construction Sector: Yorkshire and Humber 3 Analysis for Humber only is not available as it was a regional exercise 11

13 occupation, compared to 22% nationally and 10% of workers were currently taking an additional qualification in construction. Work History in Yorkshire & Humber All workers were asked why they were working in the region and more than half in Yorkshire and the Humber (56%) gave an answer relating to family reasons: either that they grew up in the area/had lived there all/most of their lives, or that they have moved to the area to follow family or a partner. A similar proportion (51%) said that their employer had sent them there. 11% said there were more jobs available in Yorkshire and Humber than where they had lived/worked in the past. Of the construction workers interviewed, 26% spent their entire construction career in the region and 39% have worked in the current region/nation for most of their construction career. Inter-Regional Mobility 80% of workers interviewed in the region had remained in Yorkshire and the Humber throughout their construction career and the area has one of the most stable construction workforces in the UK. Yorkshire and Humber has a relatively high proportion of its workforce stating that their first construction qualification was gained within the region at 83%, compared with 81% in Yorkshire and Humber imports 14.7% of its workforce, with 13% coming from a neighbouring region. Four fifths (81%) of workers in Yorkshire & Humber were fairly confident that their next site (after the interview location) would be within a daily commuting distance. Just 5% said that their next site would most likely require them to use temporary accommodation: the same as in the UK as a whole. The majority (80%) of workers have spent significant periods of time on more than one type of construction work. In fact, 15% have worked on all six types of project the survey asked about. The least frequently experienced type of construction was infrastructure projects such as road/rail/aviation or utilities builds. Even so, more than one in three workers had spent time on this type of project. Workers were asked how likely it was that they would still want to work in construction (rather than another sector) in five years time. One in five (20%) said that they definitely would want to remain in the sector, and a further 53% felt that they were very likely to. Just 4% said that they either definitely would not or would be very unlikely to want to. The supply based evidence, though limited from an occupational perspective clearly indicates that the Humber LEP area is clearly well placed in terms of sustained training provision and is one of the most stable construction workforces in the UK. Investment in training and continuous professional development has still continued despite a deep recession that has impacted across the area. 12

14 Conclusions and Recommendations Sandra Lilley and Doug Forbes presented to the Skills Group of the Humber LEP on 23 January Preliminary results were presented and there was extensive discussion surrounding the implications of the research and the conclusions that could be drawn. A copy of the slides from the presentation is included in Appendix B to this report. Without a doubt the Humber LEP area has suffered extensively during the recession across all sectors and not just construction. However it is evident that the projects listed as transformational could make a significant impact to the area s economic, social and environmental future and therefore it is critical that the Humber LEP and its partners can understand the impact of projects taking place and not taking place. It is therefore vital that these transformational projects are tracked carefully by the LEP and the impact on the labour demand is carefully monitored. The following questions are suggested as a prompt for debate amongst partners. This report can offer some evidence to support the debate 1. What are the wide ranging consequences of the investment not going ahead? And what specific impact will be experienced in terms of regional employment and growth? 2. How pivotal are these projects to the supply chain (supporting infrastructure, service sectors, manufacturing, retail, entertainment, housing, tourism, etc.) extending beyond the construction? 3. Evidence in the short to medium term indicates that the supply base is healthy, however, how can education providers gear up to meet any future spike in demand in required especially in renewable related and specialist occupations? 4. How can the evidence be utilised to support partnership working across the Humber LEP area and how can each Enterprise Zone be promoted as beneficial areas to invest in (what levers can be pulled with government, for example)? 5. A clear picture is needed in terms of what projects are likely to proceed, split into public and private sector funding and also considering PFI/PF2 type financing. Next steps It is clear that the details about individual projects will change as greater granularity becomes available. To facilitate this process we have saved the 19 significant projects within the Labour Forecasting Tool in a segment devoted to the Humber LEP. It is therefore possible that licenced users of the tool can access these forecasts, make adjustments to values, durations and add or remove 13

15 projects to create a revised profile. We would be happy to discuss with the LEP how this can be arranged for the LEP and its constituent local authorities. 14

16 Appendix A: Sectors and Occupational Groups in the Labour Forecasting Tool The LFT breaks the sectors and occupations into occupational classifications and sectoral classifications. Senior, executive and business process managers (SOC01) Construction managers (SOC02) Non construction professional, technical, IT, and other office based staff (excl. managers) (SOC03) Wood trades and interior fit-out (SOC04) Bricklayers (SOC05) Building envelope specialists (SOC06) Painters and decorators (SOC07) Plasterers and dry liners (SOC08) Roofers (SOC09) Floorers (SOC10) Glaziers (SOC11) Specialist building operatives not elsewhere classified (nec) (SOC12) Scaffolders (SOC13) Plant operatives (SOC14) Plant mechanics/fitters (SOC15) Steel erectors/structural (SOC16) Labourers nec (SOC17) Electrical trades and installation (SOC18) Plumbing and heating, ventilation, and air conditioning trades (SOC19) Logistics (SOC20) Civil engineering operatives not elsewhere classified (nec) (SOC21) Non construction operatives (SOC22) Civil engineers (SOC23) Other construction professionals and technical staff (SOC24) Architects (SOC25) Surveyors (SOC26) The construction occupations are broken into 26 classifications (eg wood trades).the seven sectors of the construction sector that we can produce forecasts for are: 15

17 Housing Public non-residential Infrastructure Industrial Commercial Housing refurbishment repair and maintenance Non housing refurbishment repair and maintenance Forecasts for end-users can be created for the following project types for a single end user occupational group: Offices Retail: non-food Retail: food Industrial Hotel and student accommodation Leisure Education Health Community 16

18 Appendix B: Presentation to Humber LEP 23 January

19 Humber LEP & Labour Forecasting Tool exploring transformational projects Sandra Lilley & Doug Forbes 23 January

20 Aims of the commission 1 Project Analysis using the Labour 2 3 Understanding the Conclusions and evidence base recommendations Forecasting Tool 3

21 What you want to know What occupations are required? The potential for market led demand Evidence that data produced is fit for purpose [investment in R&D that tests that] Establish a supply base to meet demand Commission local training providers Partnering opportunities, working with local industry & colleges EVIDENCE that can help leverage: investment commitment Allows promotion & communication to LEP partners through targeted events Demonstrates investment in the region s young people a sound understanding of the future marketplace 4

22 The Labour Forecasting Tool a reminder Who benefits? Data based on real projects from Evidence to plan and negotiate community, economic & employment benefits Construction employers Local Academic authorities; & industry developers; research housing Explains associations; the skills & training requirement those Government negotiating statistics Section 106 agreements, needed at each stage of a project. Analysis So of communities data from the benefit Office from more Recruitment, accurate training assessment and skills of National for establishing Statistics skills & training management plans Primary contractors programming work Improved efficiency Training providers & speed of delivery Predicted throughout project Planning agencies = exploring the impact By of occupation concurrent regional Month projects by month saves time and money. Works on projects of almost any size, type and value Aggregates labour demand across multiple projects = efficiency & capability 5

23 Reflect on the scope Unique two zone Local Enterprise Partnership Humber 1 Renewable Energy Humber 2 Green Port Super Cluster Corridor Primarily Renewable energy Ports and logistics Chemicals and also... Encompassing But also Retail Housing Marine Industrial Public sector 15 sites 485 acres 4 local authorities North & South linked by the Humber Bridge 6

24 Reflect on the scope East Riding Bridlington Area Marine Development Centre Port Goole Bridgehead Development Hessle Melton Housing Development BAE Systems Brough Green Port Paull Site More projects = greater potential for collaboration = greater social, economic, skills & employment return and value Hull Green Port Staithes Rd North Lincolnshire Renewable Energy Super Cluster Logistics Park North East Lincolnshire Europarc Morrison Fish Processing Grimsby Shopping Centre Green Port Port of Grimsby Immingham Border Agency BioFuel Development 7

25 Aggregated results from the top 20 projects by value For construction & end-user forecasting We ve assessed 1 Data is 2the best projects visible for the available coming few years It is likely to be affected Beyond 2017 is with by optimism bias less confidence Some projects will slip Data based on planning application data from Glenigan and so smooth the peak 3 These 20 4projects Must get 5the phasing (of 418) account for right to ensure 4.556bn of spend continuity of skills (69% of 6.576bn total) 8

26 Assumptions, approach & limitations Best case scenario based on all the projects proceeding benefits during both: - construction & - steady state once established So we show results for: Construction phase End use phase Limited data available about some of the projects 9

27 The calculations Roads improvements - 195m Ings Lane Development - 100m Keadby Wind Farm - 85m Caythorpe Gas facility - 500m Beverley refurbishments - 325m Turbine Factory - 210m Waste to Energy - 150m Commercial & residential - 100m Alexandra Dock - 90m Able Humber Port Facility - 100m Marine Energy Park - 170m Heron Renewable Energy - 650m Roads improvements - 248m Energy Centre- 130m Roads improvements - 248m Bioethanol Facility - 150m Humber Gateway 736m Scrawby Gas Power Station - 300m Renewable Energy - 100m Lincolnshire Lakes - 100m 10

28 Construction by project 20 most valuable projects shown 11

29 Construction by occupation 12

30 Construction by occupation 26 occupations shown 13

31 Enterprise Zones Broken down where possible (Alexandra Dock) 14

32 Labour forecast for significant projects Construction forecast N o of people End User forecast Dec-11 May-12 Oct-12 Mar-13 Aug-13 Jan-14 Jun-14 Nov-14 Apr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Aug-18 Jan-19 Jun-19 Nov-19 Apr-20 Sep-20 Feb-21 Jul-21 Dec-21 May-22 Oct-22 15

33 Labour forecast for significant projects The forecasts are saved in the Tool for the Humber region You can update reports as more detail becomes available = up-to-date & increasingly realistic forecasts 16

34 Next Steps: What should we be asking now? Remembering this is a 10 year programme What likelihood go-ahead? Public or private investment? What are the consequences of the investment not going ahead? What impact on regional employment and growth if the projects don t proceed? How pivotal are these projects to the supply chain extending beyond the construction? How can education providers gear up to meet demand, or does it already exist? How can the evidence be utilised to support partnership working across the Humber LEP How can each Enterprise Zone be promoted as beneficial areas to invest in? What infrastructure growth potential exists as a result of these projects? Manufacturing; off-shore, infrastructure; maintenance; retail & commercial; entertainment; housing... 17

35 Thank You Sandra Lilley & Doug Forbes - 23 January