Addressing the Low Carbon Skills Challenge (16.03.11)

Phil Ford : Skills Strategy Manager

Page 2

The prospects for construction in Scotland

●According to latest ONS data construction output in Scotland in the first half of 2010 was 11% up on the previous half year and 8% above the same period of 2009 in current prices

●The strongest sectors in the first half of 2010 were infrastructure, public non-residential and industrial construction, the last albeit from a very low base

●New orders were also stronger in the first half of the year than they have been for a while – up by 23% compared with the previous half year and 10% compared with the first half of 2009

●Other evidence on the strength of construction in Scotland is more mixed. The Experian monthly survey of activity shows an index of under 50 for March to July, indicating falling activity, although it did go over 50 for August and September. The FMB’s activity balance for Scotland has remained negative throughout 2010 so far

Page 3

Output in ScotlandAnnual Average

% Change

2011-2015

Public housing 2.1%

Private housing 6.3%

Infrastructure 3.6%

Public non-housing -10.0%

Industrial 1.7%

Commercial 5.3%

All new work 2.2%

Housing R&M 3.0%

Non-housing R&M 1.1%

All R&M 2.2%

Total work 2.2%

Page 4

Long term trends in Scottish construction

1990 2000 2009

Public housing 3% 4% 6%

Private housing

19% 18% 16%

Infrastructure 8% 10% 13%

Public non-housing

10% 8% 13%

Industrial 5% 5% 2%

Commercial 14% 21% 15%

Housing R&M 25% 18% 20%

Non-housing R&M

16% 16% 16%

Share of total output, selected years

Page 5

Employment forecasts for Scotland

Total Employment

(SIC 45, 74.2)

2009

236,950

2011

237,880

2015

258,090

Page 6

Annual recruitment requirement for Scotland

AnnualRecruitmentRequirement

(SIC 45, 74.2)

2011-2015

4,930

Page 7

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

ET WA SC WM NE NI GL EM Y&H SE NW SW%

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

ET WA SE SC GL NI SW EM NE Y&H WM NW

%

Regional/devolved nation comparisons – output and employment

Average annual output growth rate, %, 2011-2015 Total employment growth rate, %, 2011-2015

UK average UK average

Page 8

“ No one should underestimate the sheer scale of the opportunity the transition to a low carbon economy will offer the construction industry. The requirement for low carbon construction is probably the biggest change management programme that the industry has faced since Victorian times."

Government's chief construction adviser Paul Morrell: March 2010

Page 9

Low Carbon Timeline - Scotland

12.5% CO2 reduction targets for UK

50% waste recycled and composted. 14% waste used for energy and 36% waste to landfill

Fuel poverty to be eradicated as far as possiblePhased zero net carbon emissions - space heating, hot water, lighting

and ventilation by 2016-17

Policies/Drivers

2012

2013

2016

Deadlines

42% reduction in CO2 emissions80% renewable generation

11% heat generated from renewable sources60% waste recycled and composted

25% waste used for energy and 15% waste to landfill

2020

Renewables Action Plan

31% energy generated from a renewable source

70% waste recycled and composted25% waste used for energy and 5% to landfill

2011

2025

Fuel PovertyZero Carbon

Climate Change ActRenewables AP

Renewable Heat APZero Waste Plan

Zero Waste Plan

Zero Waste Plan

Kyoto Protocol – Interim Targets

Outcome

Page 10

Other Drivers for Change● Policy/Regulation

– Energy Efficiency Action Plan

– Scottish Building Regulations

– Low Carbon Economic Strategy

– Sustainable Procurement Action Plan

– Green Deal

● Electricity/gas prices increasing – North Sea Grid

● Feed in Tariffs/Renewable Heat Incentive

● Technology - Pace of change with new products and processes

● Social/community considerations in new developments

Page 11

Impact on Skills5 Broad Areas of Focus:

– Microgeneration – solar, PV, wind, biomass, heat pumps

– Macro generation – hydro, wave, tidal, wind

– Energy Efficiency – retrofit/building fabric

– Innovative Methods of Construction – offsite manufacture, new technologies/materials, lean construction etc)

– Waste

Areas of skills impact:

– Qualifications (Modern Apprenticeships, SVQs etc) and multi-skilling

– Accreditation Schemes and recognition of competence

– Flexible delivery models

Page 12

Key Questions

● What is the current and future demand for low carbon skills, training and qualifications?

● What is the current and future required capacity within the supply side to deliver these low carbon skills?

● What actions need to be taken in the short, medium and long term to balance the demand and supply equation?

Page 13

Measures and Installers – who does what?

MeasureTrade

Cavity Wall Insulation Insulation Installers

Loft Insulation

Solid Wall Insulation (internal or external)

Fuel switching and heating controls Electrical trades and installation

Glazing Glaziers

Boiler Upgrade Plumbing, Heating and Air conditioning tradesSolar Water Heating

Biomass Boilers

Air Source Heat Pump

Ground Source Heat Pump

Micro wind and micro hydro Electrical trades and installation

Page 14

Potential Number of Homes benefiting from various measures

MeasureRealistic Potential (no. of homes - '000)

Cavity Wall Insulation 625

Loft Insulation 1,550

Solid Wall Insulation (internal or external) 460

Short-term Upgrade 2,235

Glazing 500

Boiler Upgrade 1,588

Solar Water Heating 1,870

Biomass Boilers 200

Air Source Heat Pump 290

Ground Source Heat Pump 30

Reduced Energy Behaviour 2,585

Source: Consultation on the energy efficiency action plan for Scotland, October 2009

Page 15

Total number of FTE equivalent jobs estimated to be linked to energy efficiency and micro generation measures in Scotland, 2010-2020

0

2,000

4,000

6,000

8,000

10,000

12,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Period

FT

Es

Insulation installers

Electrical trades and installation

Plumbing and heating, ventilation, and air conditioning trades

Glaziers

Page 16

Potential Training Demand for Solid Wall Insulation: 2010 – 2020

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: ConstructionSkills

Page 17

Impact on Qualifications

FusionOffsite Activity

Modern Methods 2000-2008

Built HeritagePre 1919

Traditional Construction1920 - 2000

UK Contractors Group

Large regional Bldg contractors

Civil Engineering Contractors

Big SMEs and R&M

Specialist Contractors

Ind

us

try A

ctivity

Tra

inin

g a

nd

qu

als

Qualifications

ApprenticesNew credit systemto meet changing

needs ConstructionSkills and Partner SSCs

Manufacturers

Existing qualifications expanded to address carbon

agenda +

Refurb /Insulator

quals

Page 18

Construction Industry

Housing Commercial Blg Public Blg Civil Eng Energy

New build R & M Offices, Hotels, Supermarkets

Education, NHS, Defence, MOJ

Road, Rail, Water etc

Wind, wave, Nuclear, Groundsource etc

Social SpeculativePre

19191920+

New Refurb New Refurb

Qualifications

Craft, management and professional occupations

Page 19

Construction Industry

Housing

New build

Social Speculative

Training/qualification framework in home building sector for a volume housebuilder

Waste

• WRAP

• Recycling

• Waste Minimisation

• Waste management Plan

• People waste

Climate Change

• Mitigation

• Adaptation

Energy

Usage and minimisation of:

• Carbon

• Water

• Energy

• Building Regulations

• Flooding

• Renewable energies

• Air tightness

• Cold Bridging

Existing Stock

• Building Regs Part J

• Retrofit renewables

• Insulation

• Condensation

Productivity

• Offsite activity and type

• Lean Manufacturing

• Robotics

Page 20

Registration/Accreditation● Certification of Construction: Electrical Installations; Drainage,

Plumbing and Heating work.

● Microgeneration Certification Scheme (MCS): operates to support the installation of a range of microgeneration technology, which is now linked to the Feed-In Tariff. To be eligible for the FIT an installation must be carried out by an MCS accredited installer.

● Energy Assessors: have to by certified by an approved organisation, which is an institute who have signed an agreement with Scottish Ministers.

● Competence cards: there are a number of card schemes that operate across the construction industry such as CSCS/SCORE etc

Page 21

Meeting the Challenge

● Consistent methodology to determine demand and supply

● Qualifications and MA reform (new and existing)

● Promotion of Career pathways across the Built Environment

● Clarity over routes to competence and accreditation schemes

● ‘Training the Trainers’

● Flexibility of funding and training delivery

Page 22

Questions?