Humber LEP and the Labour Forecasting Tool – exploring ... · 170 18-Feb-13 18-Feb-15 Certain Bioethanol Production Facility North East Lincolnshire 150 31-Dec-13 31-Dec-14 Certain

Humber LEP and the

– exploring transformational projects

Prepared by Sandra Lilley & Doug Forbes

26 April 2013

1

Humber LEP and the Labour Forecasting Tool

exploring transformational projects

Doug Forbes If you have any queries regarding this

Mrs Sandra Lilley, Commercial Strategy

[email protected],

If you have any queries regarding this report

please contact

s Sandra Lilley, Commercial Strategy

Manager

[email protected], 07717 424 709

Humber LEP CITB-ConstructionSkills & Whole Life Consultants Limited

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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 2012.

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


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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 2012. 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 North

Lincolnshire

650 06-May-13 06-May-16 Potential

Gas Storage Facility East Riding

of Yorkshire

500 24-Jan-13 24-Jan-16 Certain

Framework (Refurb/Extensions) East Riding

of Yorkshire

325 29-Dec-11 29-Dec-15 Certain


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Description County Value

(£m)

Start Date End Date Status

Gas Fired Power Station North

Lincolnshire

300 01-Jul-14 01-Jul-19 Certain

Road Improvements North East

Lincolnshire

248 22-Jun-17 22-Jun-20 Certain

Turbine Factory Kingston

upon Hull

210 27-Nov-12 19-Sep-15 Certain

Road Improvements Kingston

upon Hull

195 18-Jan-17 18-Jan-20 Potential

Marine Energy Park North East

Lincolnshire

170 18-Feb-13 18-Feb-15 Certain

Bioethanol Production Facility North East

Lincolnshire

150 31-Dec-13 31-Dec-14 Certain

Waste to Energy Kingston

upon Hull


Energy Centre North East

Lincolnshire


Cinema, Hotel, College &

Commercial

East Riding

of Yorkshire

120 25-Feb-13 20-Nov-15 Certain

389 Flats/9 Commercial Units Kingston

upon Hull

100 13-Mar-13 13-Mar-16 Potential

Renewable Energy Plant North

Lincolnshire

100 29-Nov-12 29-Nov-14 Cancelled

Commercial Units North

Lincolnshire


813 Residential & Commercial

Units

East Riding

of Yorkshire

100 02-Feb-14 27-Mar-17 Certain

Residential/Commercial

Development

North

Lincolnshire

100 07-May-18 07-May-22 Certain

Riverside Berth Facility Kingston

upon Hull

90 14-Jan-13 14-Jun-15 Certain

Wind Farm North

Lincolnshire

85 05-Nov-12 05-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


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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)


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

Humber LEP

Figure 3: Construction and End User Skills Requirements for Significant Projects

Potential Projects)

Figure 4: Construction Skills Requirements by Significant Project (Certain Projects)

CITB-ConstructionSkills & Whole Life Consultants Limited

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Figure 3: Construction and End User Skills Requirements for Significant Projects


Whole Life Consultants Limited

Figure 3: Construction and End User Skills Requirements for Significant Projects (Certain &



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

Humber LEP

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

new entrants is extremely challenging. Data is collected by the Skills Funding Agency (SFA) and

available at amalgamated local authority level

the four main local authority areas of East riding, Kingston upon Hull, North Lincolnshire and North

East Lincolnshire.


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addressing any potential ‘skills gap’ Obtaining robust data in relation to specific occupations in construction in terms of the supply of


local authority level. Figure 7 provides the most recent data





specific occupations in construction in terms of the supply of


provides the most recent data available for



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Recent data published by the Construction Skills Network1 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 2017.

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

Figure 7:Enrolments, Starts and Achievements by Delivery Postcode and Sector Lead Bodies 2010/11: Construction

Sector Lead

Body: Humber

LEP

Apprenticeships Education & Training

Workplac

e Learning

FE & Skills

Intermediate

Level

Apprenticeship

s

Advanced Level

/ Higher

Apprenticeship

s

Level

2

excl

SfL

Leve

l 3 Total

Under

19 19+ Total

Enrolments 520 130 410 250 2,030 1,520 2,050 2,160 4,200

Starts

270 70 370 240 1,950 1,280 1,810 1,770 3,570

Achievements 130 60 300 210 1,550 880 1,260 1,370 2,620

Humber LEP

Forecasting Tool to explore the peaks and troughs of labour requirement by occupation on a project

by project basis. It should also be

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 requiremen

and it is important to view this information in terms

2015 and again mid 2018).

Figure 8: Humber LEP – Total months employment b

Starting with the occupations that

the project forecasts we have wood trades and interior fit

wood trade group is typically an occupational group with a high level of recruitment requireme


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It should also be borne in mind that the projects will be phased between 2013 and


this report demonstrate the project requirement in terms of people and occupational requiremen

and it is important to view this information in terms of when demand will be at peak (mid 2014

Total months employment by occupational group: 19 Humber P

Starting with the occupations that have the highest numerical level of demand

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 requireme



phased between 2013 and


this report demonstrate the project requirement in terms of people and occupational requirement

of when demand will be at peak (mid 2014- mid

y occupational group: 19 Humber Projects

have the highest numerical level of demand over the lifetime of

construction workers. The

wood trade group is typically an occupational group with a high level of recruitment requirement as


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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 20122 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 Humber3. 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


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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 2007.

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.


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Conclusions and Recommendations

Sandra Lilley and Doug Forbes presented to the Skills Group of the Humber LEP on 23 January 2013.

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


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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.


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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:


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• 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


1

Appendix B: Presentation to Humber LEP 23 January 2013


2

Humber LEP & Labour Forecasting Tool– exploring transformational projects

Sandra Lilley & Doug Forbes – 23 January 2013


3

Aims of the commission

1Project Analysis using the Labour Forecasting Tool 2Understanding the

evidence base 3Conclusions and recommendations


4

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]

EVIDENCE that can help leverage: investment commitment

Establish a supply base to meet demand

Commission local training providers

Partnering opportunities, working with local industry & colleges

Allows promotion & communication to LEP partners

through targeted events

Demonstratesinvestment in

the region’s young people

a sound understanding of the future marketplace


5

The Labour Forecasting Tool a reminder

Data based on real projects from

Construction employers

Academic & industry research

Government statistics

Analysis of data from the Office of National Statistics

Improved efficiency & speed of delivery

=saves time and money.

Evidence to plan and negotiate community, economic & employment benefits

Explains the skills & training requirement needed at each stage of a project.

Recruitment, training and skills management

Predicted throughout project

By occupation Month by month

Who benefits?

Local authorities; developers; housing associations; those negotiating Section 106 agreements,

So communities benefit from more accurate assessment for establishing skills & training plans

Primary contractors programming work

Training providers

Planning agencies exploring the impact of concurrent regional projects

Works on projects of almost any size, type and value

Aggregates labour demand across multiple projects

= efficiency & capability


6

Unique two zone Local Enterprise Partnership

1Humber

Renewable EnergySuper Cluster 2Humber

Green Port Corridor

Reflect on the scope

15 sites

North & South linked by the Humber Bridge

Encompassing

Primarily

Renewable energy

Ports and logistics

Chemicals

and also...

But also

Retail

Housing

Marine

Industrial

Public sector

485 acres

4 local authorities


7

Renewable Energy Super Cluster

Logistics Park

North Lincolnshire

Staithes Rd

Hull

Green Port

Paull Site

Bridgehead Development – Hessle

Bridlington Area Marine Development

East Riding

Centre Port Goole

B

Melton Housing Development

Green Port

BAE Systems Brough

Green Port Port of Grimsby

North East Lincolnshire

Europarc

Morrison Fish Processing

Grimsby Shopping Centre

Immingham Border Agency

BioFuel Development

More projects=

greater potential for collaboration =

greater social, economic, skills & employment return and value

Reflect on the scope


8

Aggregated results from the top 20 projects by valueFor construction & end-user forecasting

1We’ve assessed projects visible for the coming few years

Beyond 2017 is with less confidence 2

Data is the best available

It is likely to be affected by optimism bias

Some projects will slip and so smooth the peak

3Data based on planning application data from Glenigan

4These 20 projects(of 418) account for £4.556bn of spend (69% of £6.576bn total) 5

Must get the phasing right to ensure continuity of skills


9

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


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The calculations

Heron Renewable Energy - £650m

Caythorpe Gas facility - £500m

Beverley refurbishments - £325m

Roads improvements - £248m

Roads improvements- £195m

Marine Energy Park - £170m

Turbine Factory - £210m

Roads improvements - £248m

Bioethanol Facility - £150m

Scrawby Gas Power Station - £300m

Waste to Energy - £150m

Energy Centre- £130m

Commercial & residential - £100m

Renewable Energy - £100m

Able Humber Port Facility - £100m

Alexandra Dock - £90m

Keadby Wind Farm -£85m

Ings Lane Development - £100m

Lincolnshire Lakes - £100m

Humber Gateway – £736m


11

Construction by project – 20 most valuable projects shown


12

Construction by occupation


13

Construction by occupation – 26 occupations shown


14

Enterprise Zones – Broken down where possible(Alexandra Dock)


15

Labour forecast for significant projects

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Dec

-11

May

-12

Oct-

12M

ar-13

Aug

-13

Jan-1

4Ju

n-14

Nov

-14

Apr

-15

Sep

-15

Feb

-16

Jul-1

6D

ec-1

6M

ay-1

7O

ct-17

Mar-

18A

ug-1

8Ja

n-19

Jun-1

9N

ov-1

9A

pr-2

0S

ep-2

0F

eb-2

1Ju

l-21

Dec

-21

May

-22

Oct-

22

Construction forecast

End User forecast

No ofpeople


16

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

Labour forecast for significant projects


17

Next Steps: What should we be asking now?Remembering this is a 10 year programme

What likelihood go-ahead? Public or private investment?

How can each Enterprise Zone be

promoted as beneficial areas to invest in?

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

What are the consequences of the investment not going

ahead?

What infrastructure growth potential exists as a result

of these projects?

Manufacturing; off-shore, infrastructure;

maintenance; retail & commercial;

entertainment; housing...


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Thank You

Sandra Lilley & Doug Forbes - 23 January 2013

Documents

Humber LEP and the Labour Forecasting Tool – exploring ... · 170 18-Feb-13 18-Feb-15 Certain Bioethanol Production Facility North East Lincolnshire 150 31-Dec-13 31-Dec-14 Certain