Time to build a better Scotland

A total of 38,000 jobs have evaporated, while some 600 Scottish construction businesses have failed in three years.

"If, as we very much fear, output continues to fall over the next two quarters, this second recession will have had a similarly severe impact to the recession witnessed in 2008/09," said Michael Levack, chief executive of the Scottish Building Federation (SBF), the industry's voice.

Case in point: private commercial construction activity in Scotland crashed 37% from £2.7 billion in the 12 months to March 2009 down to £1.7bn during the year to March 2012. Its share of sector output fell from 24% to 16%.

However, there are exceptions. In Aberdeen, a resurgent oil and gas industry is creating demand for industrial and office property, said Bill Duguid, partner at the local offices of property consultants Ryden.

"More and more institutional investors are looking north due to poor opportunities elsewhere and confidence in the long-term future of the energy industry in Aberdeen."

Concerted and immediate government action is nevertheless needed to revive the industry, said Levack. He has called for a cut to 5% in VAT on building repairs and maintenance, increased direct capital investment to get stalled 'shovel-ready' projects restarted, accelerated planning approval for major projects, and for reform of public procurement processes to reduce tendering costs while supporting job creation and apprenticeship opportunities as integral parts of delivering major public contracts.

The UK Government should exploit its low borrowing costs to fund major projects, particularly those yielding high economic returns such as renewable energy, telecommunications and strategic transport, said Dr Mark Robertson, partner at Ryden and editor of its Scottish Property Review.

"At a Scottish level, the Government should consider re-enacting its accelerated capital expenditure programme from 2008/09," he suggested.

"The most telling thing the Scottish Government could do to help maintain this positive momentum would be to push ahead with the new Aberdeen Western Peripheral Road (AWPR) as soon as possible," said Ryden's Duguid. It has been delayed by a legal challenge.

Whatever the next few months bring, construction needs to recruit soon for the future. Going into 2012, CITB-ConstructionSkills estimates the annual recruitment requirement for construction in Scotland up to 2016 would be 4480, or 1.8% of the then projected base 2012 employment.

Issues hampering recruitment include: companies cut training in hard times, construction is seen to be in a slump; competition from other industries.

"In the next 10 years, one in six construction workers will have retired," said Graeme Ogilvy, director at CITB-ConstructionSkills Scotland. "An apprenticeship lasts four years in Scotland, so we must address this now."

CITB-ConstructionSkills industry intelligence suggests no upturn until 2013, said Ogilvy, but it confirms demand for new entrants for skills including wood trades and plant operators, along with heritage skills such as stonemasonry needed, for example, by Historic Scotland.

"The message is that construction hasn't closed its doors to training," he said.

ConstructionSkills Scotland's careers team visits schools and other influencers to spread the word that construction apprenticeships are not solely about becoming a joiner, bricklayer, or painter and decorator.

For example, the organisation has developed apprenticeship frameworks for specialisations such as dry lining techniques.

"We have developed one for the Southern General Hospital (Glasgow) where the contract for dry lining is £30m, and we hope and expect to see 20 to 30 apprentices taken on there," Ogilvy said.

"Construction is everything from general operators to craft technicians, architects, town planners, surveyors, engineers, through to accountants and lawyers specialising in construction. So there's a raft of opportunity."

Ogilvy also notes that the development of marine energy schemes will create more opportunity as infrastructure work on harbours and piers is called for.

"I think it will be 2013 before we start to see it, but we have to start training soon and get the message to schools and parents that construction has a future and should be considered as a career of choice," he said.

With mobile staff, 100 of them working in Scotland and covering the country in a client-based approach, ConstructionSkills Scotland is well placed to re-start jobless apprentices.

"We've started maybe 80% of apprentices that have been made redundant, partly due to funding from the Scottish Government's Adopt An Apprentice initiative," Ogilvy said. This offers £2000 per apprentice to employers.

ConstructionSkills Scotland's guidance for firms seeking public sector procurement contracts covers requirements to train and to try to produce an apprenticeship plan.

Responding to the review of post-16 education in Scotland, ConstructionSkills stressed the need for flexibility in meeting employers' needs. Ogilvy praised Learn Direct & Build – a private-public partnership behind successful e-learning tools to teach the theory behind construction skills.

The industry's strongest pitch to potential recruits is its track record in employing apprentices. "The construction apprentice is employed from day one," Ogilvy stressed.

He contrasted the qualifications for construction apprenticeships with recent controversy over the high percentage of modern apprentices within supermarket groups.

He said: "Maybe we need to look at the quality of some of these modern apprenticeships. A building industry craft apprenticeship is at Scottish Vocational Qualifications Level 3 and a four year apprenticeship with a skills set at the end. It's well respected throughout the UK and the world." n