Using local labour in construction - JRF · tenants in employment and, with a planned building...

PPP R E S S

The•POLICY

Richard Macfarlane

Using local labour inconstructionA good practice resource book

First published in Great Britain in November 2000 by

The Policy Press

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1 Introducing LLiC 1Tackling social exclusion 1Skill shortages 2Developing local firms 3Serving business objectives 3Choosing the right LLiC approach 3

2 Legal and policy issues 5The government’s position 5The European position 5The local authority position 7Clarifying the legal position 8How to obtain a commitment to LLiC 8

3 Codes, contracts and voluntary agreements 9Involving the contractor 9Specifying the LLiC requirements in the tender 10The two-envelope approach 13Voluntary codes 14Planning agreements 15‘Build and train’ select tender list 16

4 Labour supply activities 17Job-matching 17Site-based recruitment centres 20A construction employment agency 20

5 Training 22Recruitment of trainees 22Pre-site training 27Site work 29Social and welfare support 31Continuing training 33

6 Local business initiatives 35Purchasing and business development initiatives 35

7 LLiC on maintenance work 39Local authority housing 39Housing association maintenance contracts 41Establishing a small contractor 42Internal contracting 43

Contents

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8 Organisation and funding 45Organising LLiC 45Staffing 47Funding 47

9 Monitoring and outputs 49Measuring LLiC outputs 49Benchmarks 50

Bibliography 52Appendix A: Waltham Forest HAT: extracts from LLiC tender clauses (Phase 1) 53Appendix B: Extracts from the LLiC Requirements – Landport Estate, Portsmouth 55Appendix C: Liverpool City Council’s Local Labour Agreement 57Appendix D: LLiC scheme monitoring forms 59Appendix E: Hanlon Computer Systems Skills Register 61Appendix F: Contacts 63

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Using local labour in construction

1

Tackling social exclusion

The term ‘local labour in construction’ (shortenedto LLiC in this report) covers a wide range ofschemes that seek to target the employmentimpact of construction work. There are a numberof rationales for this, and several may apply toany one scheme.

The most common rationale is the reduction ofunemployment and social exclusion. The term‘social exclusion’ is used to reflect the widerimpact that unemployment may have: its link topoverty, educational underachievement, lowaspirations and detachment from the labourmarket. Social exclusion is the result of a numberof processes, including:

• changes in the labour market (such asreductions in the opportunities for unskilledand semi-skilled people because of rapidindustrial change);

• discrimination (on the basis of race, genderand so on);

• societal changes (such as the increasingnumbers of single-parent families);

• physical isolation (such as living in areas withpoor transport links to employment centres).

Social exclusion tends to be concentrated in areasof low-cost owner-occupied housing and privaterented property (such as old terraced housing),and areas of social housing. In rural areas thesetypes of accommodation are likely to bedispersed.

The high levels of social exclusion is a key issuein attracting public funds for regeneration.Typically, regeneration areas have poor qualityhousing and/or old and contaminated industrialsites, and high levels of social exclusion. Much of

the regeneration money is spent on the physicalenvironment and involves land clearance, newinfrastructure (roads and so on) and buildingworks. A reduction in social exclusion in the arearequires a programme of careers guidance,vocational training and support in job-search. Itmakes sense that the latter programme shouldinclude measures to target the jobs and trainingopportunities arising from the regenerationactivities at ‘excluded’ local people. The first andmost visible of these jobs are construction related.

Example 1: Waltham Forest Housing ActionTrust

The decision to transfer ownership and managementof run-down social housing from a local authorityto a housing action trust (HAT) required strongsupport in a tenants’ ballot. Respecting the views oftenants subsequently became a central part of theethos of Waltham Forest HAT. A key element in thiswas that the HAT would maximise the number oftenants in employment and, with a planned buildingprogramme of £150 million, LLiC was clearly goingto be important.

Example 2: Cardiff Bay Training andEmployment Group (CBTEG)

“CBTEG is a partnership of training andemployment agencies committed to ensuringthe benefits of regeneration in Cardiff Bay areavailable to the local community, primarilythrough making jobs created available to localresidents.” (From ‘Linking people to jobs’ – astrategy of Cardiff Bay Training andEmployment Group)

Introducing LLiC

1

2


Skill shortages

In the early and mid-1990s the main rationale forLLiC schemes was tackling unemployment andsocial exclusion, but in the first months of thenew millennium an additional rationale hasemerged: reducing skill shortages. This has madeit easier to get the support of developers andconstruction employers because, for them, labourshortages result in rising wages and inflation,which can threaten profits.

The Construction Industry Training Board Forecastindicates that total employment over the next fewyears is likely to rise slightly, and thatapproximately 73,000 new recruits will berequired each year to meet this increase andreplace leavers (CITB, 1999). These figuresinclude management and professional grades aswell as building trades, building specialists andcivil engineering operatives.

One interpretation of the Forecast is that theindustry requires a modest increase in currenttraining provisions to enable the future labourneed to be met. A comparison between 1996/97and 1998/99 suggests that the number of trainingplaces is rising. However, in many areas, theclosure of adult training centres has made itdifficult for unemployed people to obtain tradeskills. This is important because, as Table 1illustrates, the traditional apprenticeship/traineeship entry route often accounts for lessthan 50% of the training being delivered. The

intake targets can only be met by attracting andtraining adults (aged 18+), and by ensuring thatall students on full-time vocational coursesbecome employed in the industry at the end oftheir course.

In the past there has been employer resistance totaking on trainees who did not enter at the age of16 and progress through a traditionalapprenticeship route, and also scepticism aboutthe value of training that does not involve asubstantial period of site experience. Problemsalso arise from the greater use of self-employedlabour and payment according to output: there arefewer staff with the time to supervise trainees and‘improvers’. With older trainees the trainingproblems are exacerbated by the need to paywage levels that cannot be covered byproductivity. These barriers to entry may help toexplain why 70% of the CITB regions arereporting skill shortages as a problem or concern(CITB, 1999; Regional forecasts).

As can be seen from this report, LLiC schemes canmake a major contribution to ensuring that thefuture labour needs of the construction industryare met by:

• attracting more recruits;• organising training to industry standards;• arranging appropriate ‘first jobs’ for these new

entrants to ensure that they become productiveworkers;

• providing resources to help overcome traininggaps and additional on-site costs.

Table 1: Comparison between new labour requirements 2000-04 and current training provision(1998/99)

Target annual Actual Other Total training Overall surplusTrade intake (2000-04) youth intake training intakes intake (1998/99) (or shortfall)

Number % Student Adults Number %

Carpentry 10,100 5,737 57 2,978 2,605 11,220 1,120 11Bricklaying 6,500 2,862 44 1,711 2,110 6,683 183 3Plastering 2,100 557 27 196 545 1,305 (795) (38)Painting 4,600 1,826 40 1,185 1,450 4,461 (139) (3)Operatives 3,300 229 7 217 110 556 2,744 (83)*Plumbing 5,500 2,078 38 868 1,370 4,316 1,184 (22)

* This arises because there is very limited training provided for general operatives at present.Source: CITB (1999: Tables A2A); Trainee Numbers Survey 1998-99

3

Developing local firms

In a number of case study areas the LLiC schemeshave had more success in placing trainees withlocal small- and medium-sized contractors thanwith national firms and their ‘travelling’ sub-contractors. Supporting the development of theselocal enterprises is important because of theircontribution to both training and ongoingemployment for local people. An obvious way ofdoing this is to help local firms obtain contractson major new developments. Once goodrelationships are established with local firms itbecomes easier to get them involved in localtraining and recruitment.

Example 3: The Partnership, Canary Wharf

In just under three years operation the Canary WharfBusiness Liaison Manager has been able to identify179 packages of work worth £133.5 that were wonby Tower Hamlets firms introduced through theCanary Wharf local business database.

Example 4: Queens Cross HousingAssociation, Glasgow

Queens Cross Housing Association offer four-yearmaintenance contracts which include a contractualrequirement that each trade contractor recruit andretain at least one youth apprentice. The first four-year contract covered 1995-99 and resulted in a totalof 15 apprenticeships in 12 companies. The secondset of contracts have produced another 15apprenticeships.

Serving business objectives

Finally, we should note that for a number oforganisations involved in promoting LLiC schemesthe process has helped achieve their owncommercial or development goals.

Example 5: Braehead, Glasgow

Capital Shopping Centres have a policy of maximisingthe use of local labour as an essential part of creatingthe right profile for their activities in the area in whichthey are investing.

Example 6: Penwith Housing Association

Penwith Housing Association has been able to offeran exclusive package of social housing developmentand local training. This has helped the association toexpand its activity to three new local authority areasin Cornwall.

Choosing the right LLiC approach

When developing an LLiC scheme it is importantto be clear about who the target beneficiaries are,and to identify a building programme that can beutilised.

Identifying the beneficiaries may need some quitedetailed work. For example, if the target isresidents of a relatively small area (such as ahousing estate) then the population profile isimportant. There may be high unemployment, butif this is mainly among older people or singleparents the level of interest in construction workis likely to be low. For a larger area it is importantto check:

• The level of interest in construction work: Howmany people are registered at the Jobcentre asseeking construction work (by trade)? Howmany of these give construction as their mainoccupation (and have suitable skills andreferences)? How many would need pre-sitetraining?

• The level of interest in construction training:What is the demand from school leavers(check with careers services, the CITB andlocal training providers)? What are theexplanations for this (for example, are youngpeople interested in manual trades work)?

• What local building firms exist, and what arethe key business issues they face in accessingwork?

With this information it is possible to decide whatthe primary target of the LLiC initiative should be(for example, unemployed people, school leavers,women, ethnic minorities or small firms?) andtherefore what the scheme should provide.

In relation to the building programme it isimportant to ask:

• What type of construction is it and thereforewhich trades will be required? High-tech andpre-fabricated buildings will provide less

Introducing LLiC

4


opportunities for local people.• What support will the developer give, and are

there legal constraints on their procurementprocesses (see Chapter 2)?

• What is the duration of the developmentprogramme, and how certain is this?

This information will help identify the likely scaleand range of opportunities for local people, andthe key partners that need to be involved if theseopportunities are to be successfully targeted.

Table 2: LLiC schemes on different types of development

Social housing Waltham Forest Housing Action TrustPenwith Housing AssociationLondon Borough of Lewisham

Housing maintenance Newcastle CityworksQueens Cross Housing Association1066 Housing AssociationB-Trac Services (Birmingham)

Retail centres Braehead (Glasgow)Forthside (Stirling)

Civil engineering (roads, tunnel, bridge, barrage) Cardiff Bay Development Corporation

Industrial ‘sheds’ Speke Garston Development Corporation (Liverpool)

Office development Canary Wharf (London Docklands)

Chemical plant St Fergus (Aberdeenshire)*

Use of historic buildings English Partnerships (Greenwich/Woolwich)

Leisure facilities The Millennium Dome (Greenwich)The Wild Screen (Bristol)

* for a case study see Macfarlane (2000)

However, when approaching regeneration bodies,developers and contractors, it is important to bewell briefed on the wide range of successful LLiCschemes that currently exist. Even in urbanregeneration schemes it is not uncommon to finddevelopers and regeneration officers who arguethat helping to tackle social exclusion is not partof their brief, or that LLiC cannot possibly beapplied on their scheme. As shown in Table 2,LLiC has successfully been applied on many typesof development.

5

The biggest single constraint on the spread ofLLiC practices has been uncertainty about thelegality of including labour force matters inbuilding contracts issued by public sectordevelopers. Most public bodies are ‘risk-averse’and are not primarily concerned with employmentmatters, which makes them reluctant to explorepossible opportunities. Some ‘private bodies’(such as housing associations) are uncertain abouttheir status and how public sector constraintsaffect them. This reticence may be compoundedby a view that any request of a contractor costsmoney, and so an LLiC scheme would add to thecost.

As will be clear from Chapter 3, there are a widerange of approaches that have been used toincrease the provision of training and the use oflocal labour by contractors. However, given theimportance of the perceived legal position indeterring action it is important to start byclarifying the current position.

The government’s position

Responsibility for government policy in this areamainly rests with the Office of GovernmentCommerce (formerly the Procurement PolicyTeam) in HM Treasury. Their position is set outin Procurement policy guidelines which state:

It would not be consistent with value formoney policy for purchasing power to beused to pursue other aims. (ProcurementPolicy Team, 1998, Clause 2.4)

There appears to be little interest in examiningways of implementing LLiC that would have noadverse impact on value for money – for example,identifying the additional cost of the LLiC element

and funding this from economic development ortraining budgets.

However, it is for government departments andother public bodies to interpret the officialposition and variations in interpretation havepermitted LLiC initiatives to operate in the publicsector, especially where the developer has a highlevel of commitment to this activity.

Example 7: Liverpool City CouncilConstruction Charter

Since 1993 Liverpool City Council has invitedcontractors to sign its Construction Charter. Toimplement this the City Council requires allcontractors submitting a tender for works with avalue exceeding £100,000 to submit a separate sealedenvelope containing a signed Local LabourAgreement. This is only dated and enacted with thesuccessful contractor after the contract has beenawarded. It is a separate legal agreement, not acontract condition (see Appendix C).

The European position

The main concerns relating to Europe are theTreaty of Rome which applies to all individualsand organisations, and the European Commission(EC) Procurement Directives which only apply toworks contracts valued at over 5 million Ecus(about £4 million) issued by a public body.

There is no blanket prohibition on the use of locallabour clauses in contracts covered by the Treatyof Rome and the EC Procurement Directives. Theclearest statement of this position is contained ina discussion document issued by the EC AdvisoryCommittee for Public Procurement in 1989:

Legal and policy issues

2

6


Procuring entities are also free, underCommunity Law, to pursue the goal ofreducing long-term unemployment,provided they respect the provisions ofthe directives and the constraints of theTreaty.... Other categories ofunemployment ... almost certainly wouldbe considered by the Court to be anequally legitimate concern. The sameprobably applies to a broad range ofsocial matters. (Advisory Committee forPublic Procurement, 1989, p 5)

Advice issued to public bodies by the UKTreasury (HM Treasury, 1996) does not prohibitLLiC clauses, but does make clear that the criteriafor selection of a supplier can only take intoaccount the following matters:

• characteristics that make them unsuitable (suchas bankruptcy, criminal records);

• their economic and financial standing;• their technical capacity and skills/experience.

This position has allowed some public bodies toinclude a contract clause covering employmentand training matters, within a tendering processthat does not discriminate against non-UKproviders, and where the contract is awarded onthe above criteria. Methods that have beensuggested for ensuring an equality of opportunityfor non-UK firms include:

• use categories of workers that could beprovided from anywhere in Europe (such asunemployed people, women, young people,trainees) even though the hope is that theywould be recruited locally;

• specify that a proportion of ‘new workers’should be local, which allows the existingworkforce to be used;

• ensure that all contractors have access torecruitment and training services: this createsequality for non-local contractors (who wouldnot have an existing local workforce) and forcontractors that have no experience of UKtraining arrangements and funding;

• in respect of accreditation, refer to ‘industrystandards’ rather than UK qualifications.

Example 8: Waltham Forest HAT

To implement its policy commitment to LLiC (seeExample 1, p 1) Waltham Forest HAT included relevantclauses in its tenders and contracts. The HAT is apublic body covered by the Treaty of Rome and theEC Procurement Directives. It sought legal advice onthe inclusion of its local labour contract clauses. Itwas advised as follows:

• EC Works Directive 71/305/EEC details whichcriteria can be considered (by a public body)in awarding a contract: Article 29 of theDirective has been regarded as permitting locallabour clauses as these may be a factorrelating to ‘the most advantageous tender’ fora particular area.

• The HAT should not discriminate against non-UK contractors, that is, the recruitment andtraining facilities should be available to allcontractors submitting tenders.

• The minimum 20% local labour requirementdoes not fall foul of the EC Directives because80% of jobs could be available for workersfrom other member states.

• It is worth taking the risk of incorporatingthe LLiC clauses, and this could get supportfrom the government on the basis that thewhole modus operandi for HATs is to “secureand facilitate the improvement of livingconditions in the area and the socialconditions” (EC Works Directive 71/305/EEC).

The LLiC clauses used were not challenged. The HAThas now moved on to a ‘best value’ selectionarrangement. Effectively, selecting a ‘partner’ andthen negotiating the price for the works. Theselection of the partner reflects the high prioritygiven to local employment and other social mattersin the redevelopment programme.

As can be seen from Example 8, it has also beenargued that if local employment and training is akey objective for the developer then it islegitimate to take this element of its requirementsinto account in awarding a contract. The sameargument could be made in relation to ‘best value’procurement under the 1999 Local GovernmentAct.

7

Contracts subject to the EC ProcurementDirectives must be advertised in the EC OfficialJournal through a Contract Notice – the intentionto impose a ‘local labour’ clause in the contractmust be stated in the Contract Notice. However,it must also be made clear that there is nointention to favour contractors who intend torecruit locally. In the past, the main challenges tolocal labour clauses have come from the UKgovernment (rather than a contractor) in responseto a query that has arisen in the EuropeanCommission as a result of information in aContract Notice.

The local authority position

Local authorities are not only covered by theEuropean framework, but also by specificconstraints introduced in the 1988 LocalGovernment Act, now amended by the 1999 LocalGovernment Act.

Section 17 of the 1988 Act states that localauthorities and some other public bodies (seebelow) must undertake their functions in relationto any proposed or existing contract:

without reference to ... the terms andconditions of employment by contractorsof their workers, or the composition of,the arrangements for promotion, transferor training of, or other opportunitiesoffered to, their workforces. (1988 LocalGovernment Act, sections 17[1] and 17[5a])

The Act is very comprehensive. For example,under Clause 17(7) it appears that you cannotrequire a contractor to use ‘non-commercialmatters’ in the selection of suppliers andsubcontractors, and under Clause 19(10) a publicauthority is deemed to have used non-commercialconsiderations if they ask a potential contractorquestions relating to a non-commercial matter, orsubmit a draft tender or draft contract containingnon-commercial matters to them. On the otherhand, there is no body of case-law that helps toclarify what this all means. As discussed inChapter 3, local authorities have devised ways ofsatisfying the requirements of the 1988 Act whilestill engaging the contractor in a LLiC programme.

Example 9: Extract from the London Boroughof Tower Hamlets Guidance for contractors

Tower Hamlets is an area of high unemployment(20%) and associated deprivation. Therefore TowerHamlets ... asks any successful Contractor to use theirbest endeavours to ensure that at least 20% of theconstruction and related works should be undertakenby local residents. The Council has set up the LocalLabour in Construction (LLiC) Team within theHousing Department to help contractors reach thetarget.... The Council’s LLiC Scheme is a separatevoluntary agreement, and in accordance with theScheme Information, tenderers are invited tocomplete the attached Method Statement ... andpresent it at the pre-contract meeting. (The Guidanceis included as an appendix to the Tender for Councilworks contracts.)

The Act is quite specific about the bodies towhich it applies. From Schedule 2 we can seethat these include local authorities, UrbanDevelopment Corporations, Passenger TransportAuthorities, and a number of other bodies.Section 19(6) of the Act extends the application toa public authority that is carrying out relevantfunctions for a local authority under Section 101 ofthe 1972 Local Government Act.

Further, the 1999 Local Government Act hasprovided the Secretary of State (at the Departmentof the Environment, Transport and the Regions)with the power to make an order:

for a specific matter to cease to be a non-commercial matter for the purposes ofsection 17 of the LGA 1988. (1999 LocalGovernment Act, clause 19)

This is important because it creates the statutoryframework for allowing local authorities tointroduce social clauses into contracts and to takethese into account in awarding the contract,where this matter is agreed by the Secretary ofState. It is understood that the government hasbeen seeking advice from a ‘social partners group’coordinated by the Local Government Associationas to what matters might be made the subject ofsuch an Order, but there appears to be noimmediate intention to introduce an Order.

Legal and policy issues

8


Clarifying the legal position

In establishing an LLiC scheme or programme it isimportant to be clear about the legal situation ofthe developers that will (hopefully) get involved.These are the organisations that will actually placethe contract.

If there is a single developer, consultation with itslegal advisor will be required. If a programmeaims to utilise contracts being placed by severaldevelopers, it will be necessary to develop amodel which can be adapted for use by eachdeveloper. The developers may seek their ownlegal advice and decide how to implement themodel.

Example 10: Manchester LLiC Charter

In Manchester the City Council developed aProcedures manual for contractors to implement theTowards 2000 together LLiC Charter (Manchester CityCouncil, nd). This was used on City Councildevelopments, but also adopted by other majordevelopers, such as Manchester Airport andManchester Millennium (redeveloping bomb-damaged areas).

In seeking legal advice it is important to considerwhich questions to ask. A useful approach is touse the examples set out in this report to draft aset of contract proposals (contacting other LLiCschemes to obtain more detail if necessary), andthen to seek legal advice on the risk of actionbeing taken against the organisation if such acontractual approach is used. This ‘risk-analysis’method may elicit a different response fromasking how local employment matters can beincluded in tenders and contracts.

In developing an approach to contracting it is alsoimportant to consider whether there are policyexpectations or financial conditions that derivefrom the funding bodies. Insofar as these existthey are likely to arise from concerns about valuefor money, and may be satisfied by the adoptionof a process which clearly identifies any additionalcost related to the LLiC scheme, and shows howthis can be funded from other sources.

How to obtain a commitment to LLiC

Despite the somewhat discouraging legal contextmany LLiC schemes have been established. To besuccessful each has had to find a way ofencouraging contractors to recruit local traineesand employees. For some this has proved quiteunproblematic because the legal advice has beenthat they are not constrained by the ECProcurement Directives or the Local GovernmentActs. Other schemes have needed to developways of accommodating the legal constraints anda review of different approaches is set out inChapter 3.

Good practice

• Use the examples given in this report to draftproposals for obtaining a formal commitmentto LLiC by contractors.

• Seek legal advice on the risk to thedeveloper(s) if such a proposal is used.

9

Involving the contractor

LLiC schemes require the involvement ofconstruction employers if they are to achieve theiraims. This is because:

• they (or their sub-contractors) will need toemploy or provide site experience for the localrecruits;

• the promise of employment is essential ifunemployed people are going to be persuadedto join the scheme and stick with the trainingthey need to become good long-termemployees in the industry.

There are two approaches to obtaining thecontractors involvement: voluntary andcontractual. It is difficult to compare theeffectiveness of these approaches, in part,because the outputs achieved will be aconsequence of a number of factors and, in part,because voluntary schemes often have very poormonitoring requirements (there are no means ofrequiring the contractor to produce regular andverifiable monitoring information).

Many schemes have started on the basis of avoluntary agreement and then sought to move toa contractual approach in order to achieve betteroutcomes. However, when a training-based LLiCscheme establishes a good reputation they mayfind it easier to place trainees with small- andmedium-sized local contractors on a voluntarybasis, than large contractors (and their sub-contractors) on a contractual basis. Voluntaryplacement is likely to be less successful whenthere is a downturn in the construction industry:LLiC schemes were originally developed becauseit was so difficult for unemployed people toaccess the industry at a time when labour demandwas low.

It seems likely that LLiC outputs from contractualschemes will be greater and more verifiable thanthose from voluntary schemes, over the long term.

Another reason for taking a more formal,contractual approach is the creation of equalityand fairness in the tendering process. The mainthrust behind both the European and the domestic

Codes, contracts and voluntaryagreements

3

Example 11: The Manchester Experience

In 1993 Manchester City Council, the ConstructionIndustry Training Board (CITB), Manchester Trainingand Enterprise Council (TEC) and the EmploymentService came together to launch the ManchesterEmployment in Construction Charter. Developers andcontractors operating in the City were invited to signthe Charter which asked them to use their ‘bestendeavours’ to recruit workers, trainees and sub-contractors based within six miles of the developmentsite, or within the City of Manchester. Over 300 firmssigned the Charter, but as a voluntary agreement itwas difficult to monitor and evaluate. In 1996 anew Charter was adopted (by the Towards 2000Together Partnership) that includes the followingstatement:

“We will use our best endeavours to ensurethat a minimum of 10% of the total on-siteworkforce ... will be residents of ... Manchester.We will outline our approach to therecruitment of local labour in our contracttender submissions through the completionof a Training and Employment MethodStatement.” (Charter Statement)

This is implemented through a Procedures Manualfor Contractors (Manchester City Council, nd) thatspecifies what is required, including the monitoringarrangements (see p 13).

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legislation in respect of procurement is to ensurecompetition on equal and appropriate terms. Thisis best achieved by specifying what is required (inrespect of LLiC) in the tender and expecting eachapplicant to deliver this. Furthermore, if you wanta contractor to deliver the LLiC requirements, theyshould be allowed to include a price for this in theirtender. The use of codes and ‘best endeavours’clauses leads to less clarity and less equality inthe tendering process because each applicant willfind it difficult to calculate the costs that they willincur to satisfy an ill-specified requirement. Alikely response is that they will choose to notreduce their competitiveness by including an LLiCcost and, subsequently, will not deliver any LLiCelements that will increase their costs.

Specifying the LLiC requirementsin the tender

It follows from the above discussion that the bestapproach is to clearly specify in the tender whichLLiC outputs are required. The legal and policyposition of the developer will determine wherethis is possible, and how it is to be done (seeChapter 2).

Example 12: LLiC clause in Braeheadsub-contracts

“The sub-contractor must notify the BraeheadRecruitment Centre of any vacancies he [sic]may have for operatives and staff with a view,where possible, to employing suitable locallabour.” (Bovis Construction for CapitalShopping Centres, Braehead, Glasgow)

As Example 12 shows, the tender clause can bevery simple, although the lack of detail meantthat, at Braehead, the outcomes relied heavily onthe development of a good relationship betweenthe sub-contractor’s site staff and the BraeheadRecruitment Centre.

Most LLiC clauses are more substantial. They areeither included as part of the Preliminarieselement of the tender, or set out in an Appendixwhich is referred to in the Preliminaries. Example13 describes the requirements included in thetender documentation used by Speke GarstonDevelopment Company on Merseyside, either intheir own contracts or in those being developedby private companies.

Appendix A includes an extract from the contractdocumentation used by Waltham Forest HAT inthe first phase of development. This is quiteexplicit in specifying:

• the overall LLiC targets;• recruitment arrangements;• the provision for trainees on site;• the inclusion of costs;• terms and conditions of employment for local

people;• the monitoring requirements and

responsibilities.

Appendix B sets out the key elements of anapproach developed for Warden, Portsmouth andSwathling Housing Associations for theredevelopment of the Landport Estate inPortsmouth. Here the quantity surveyors (Currie& Brown) introduced a provisional sumarrangement to cover the cost of the localrecruitment and training requirements. This sumwas calculated for each tendering firm on thebasis of information provided in the tender. Thetender evaluation was done both with and withoutthe inclusion of this LLiC cost. This arrangementprovided a measurable commitment from thecontractor, and a means of calculating theirentitlement to payments from the provisional sumas the contract progressed. It explicitly makes itthe contractor’s responsibility to obtain thecompliance of sub-contractor, and protects theemployers (that is, the clients) from any claimsthat the contractor might seek to make (such asthose arising from the poor performance of thelocal labour).

In other cases a prime cost sum has beenprovided for the LLiC element. This fixes the totalsum that is available to the contractor for meetingthe LLiC requirements, but since the same sum isincluded in each tender it has no impact on thevariations in the tender sums received. Thisapproach may be favoured where the developerhas a fixed budget (for example, grants obtained)available for the LLiC element.

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Example 13: Speke Garston Development Company (Liverpool) – contract requirements for locallabour and training

Item Detail

Trainees To employ a specified number of local trainees who have completed pre-site training (typically to NVQ Level 2).

Equal opportunities Encouragement to use sections 37 and 38 of the 1976 Race Relations Actto take positive action to encourage and facilitate applications for trainingand employment from ethnic minorities.

Payment and working conditions These must be at least equivalent to those provided for other similarworkers on site.

Experienced workers A 10% target for the employment of fully productive local residents(measured in person-weeks). Contractors are encouraged to use the locallabour register provided, and give seven days notice of vacancies.

Local firms Include local firms on sub-contract tender lists and provide local firms withan equal opportunity in the tendering process. Speke Garston has aregister of local firms.

Costs and funding A statement making it clear that the contractor must cover all costsassociated with the local labour requirements, and is responsible forseeking external funding if required.

The Contractor’s responsibility A statement emphasising that the Contractor is responsible foremployment matters, obtaining the involvement of their sub-contractors,and providing monitoring information for the whole site.

The Employer’s (ie the client’s) A statement that the contractor is responsible for evaluating theresponsibilities competence of any people or firms referred to them by the Employer or

their agents.

Labour forecast A requirement to provide the Development Company with a labourforecast immediately the contract is signed.

Monitoring A requirement to maintain a labour register using a standard form, submitmonthly summaries to the Employer, and provide access for routineinspections and verification work.

Management A statement that the local training and recruitment will be reviewed at themonthly site meetings, and that the Contractor can be required to attendseparate meetings to discuss the scheme.

Disputes Clarification that the Contractor is responsible for resolving any disputeswith local employees or sub-contractors, but any unresolved disputes(about the requirements) between the Contractor and the Employer will bedealt with under the arbitration arrangements for the contract.

Contractor’s statement of intent A statement that the Contractor will comply with the training andemployment requirements, which has to be returned with the tender.

Standard documentation A labour register, monthly summary form, list of sub-contract firms invitedto tender.

Definition of local A map showing the areas regarded as ‘local’ for the purposes of therequirements.

Codes, contracts and voluntary agreements

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Portsmouth Housing Association has also usedcontract clauses to specify its requirements on aYouthbuilding scheme, where a central purposewas to engage socially excluded young people intraining and work. It would be difficult to achievethis without ensuring that the contractor was100% committed to the goals.

Example 14: Portsmouth HousingAssociation Youthbuilding Scheme –summary of Employer’s requirements (for theYouthbuilding element)

Part of the work was to be undertaken by trainees(aged 18-24) who had already been selected by theclient. These would work under a project-basedtraining manager employed by the client, butresponsible to the contractor.

The contractor was to employ the trainees once theyhad completed their 12 months on New Deal, up untilthe end of the contract. Pay was set at industry rates,but a wages subsidy of £127 per week was available.

The client and the contractor were to agree packagesof work to be undertaken by the trainees, eitherindependently or in conjunction with contractor’sstaff. ‘Trainee works’ were to be charged on a materialonly basis by the contractor.

In addition to the training manager, the contractorhad to make other staff available to lead or supervisethe trainees.

The contractor was to provide additional siteaccommodation for the trainees (a serviced mess-room), the training manager and a welfare supportworker, including both male and female washrooms.

The building programme had to be planned toaccommodate the trainees over a 12-month period,allowing for the work undertaken by trainees to takethree times as long as similar tasks done by a skilledperson.

There is, however, a tension between the desireto specify clearly what is required, and a concernthat if the specifications are too long thecontractor will not give them sufficient attention.Example 15 provides a contrasting approach.

In some situations, development bodies who areconstrained by EC procurement directives and/ordomestic legislation are successful in promotingLLiC because most of the construction iscommissioned by private ‘inward investors’. Boththe Cardiff Bay Development Corporation and theSpeke Garston Development Partnership havetaken steps to encourage private developers toimplement LLiC through their tenders.

Example 15: Tender clauses used by CardiffBay Development Corporation (CBDC)

General requirements in respect of local labour

The Contractor is, wherever possible, to employ locallabour. In order to ensure sufficient access to jobopportunities by local people CBDC will provide aCentral Recruitment Service on site. The Contractoris to allow in clause A36/255 for accommodation andattendances.

General requirements in respect of training oflocal labour

The Contractor is to allow for the costs involved inemploying at least one trainee recruited from a localcustomised training course for each of the tradeswithin the construction of the scheme. TheContractor shall, prior to the commencement of theWorks, provide the contractor’s agent (CA) with aschedule of the proposed trainee appointments. TheContractor shall attend monthly meetings with a localtraining body to be nominated by the CA with a viewto contributing towards the planning of local trainingprovision as it affects the availability of labour forthe performance of the contract. The Contractor shallprovide a six-monthly report to the CA on theavailability and effectiveness of employing locallabour.

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Example 16: Implementation at SpekeGarston

Speke Garston Development Company Ltd (on behalfof the Partnership) has developed mechanisms tomaximise the local labour achievements by inwardinvestors. There are four elements to this:

• the Development Company’s Project Managersintroduce the LLiC ‘model requirements’ toinward investors and make sure that the lattermeet with the Partnership’s ConstructionTraining Manager: no agreement with apotential investor proceeds without acommitment on local employment;

• further meetings take place with contractorsat the tender stage, and throughout thecontract;

• the Partnership’s Jobs Training and Education(JET) centre is responsible for labour supplyand training initiatives;

• the Partnership Board receive regular reportson the LLiC achievement on each site: theyhave taken action at the highest level wheresites are not fulfilling their local labourcommitments.

The two-envelope approach

Some local authorities and other bodies coveredby the EC Procurement Directives and/or the 1988Local Government Act have adopted a two-envelope approach. This involves:

• setting out the LLiC requirements eitherthrough a code or in the Preliminaries;

• requiring the submission of an LLiC agreementor method statement in a separate sealedenvelope with the tender;

• undertaking the tender appraisal andcontractor selection process without openingthe LLiC envelope;

• once the contractor is selected, including theiroffer (that is, the contents of the secondenvelope) as a contractual condition.

Both Liverpool and Manchester City Councilsoperate this type of approach, but using collateralagreements rather than clauses in the constructioncontract. The Liverpool arrangements are set outin Appendix C.

In Manchester the LLiC requirements areintroduced through a Construction Charter and aProcedures Manual for Contractors who sign theCharter. The contractor is invited to sign a deedof agreement and submit a (labour) methodstatement with their tender. The latter includes alabour forecast indicating the number ofoperatives required for each week of siteoperation (by trade) and the number and durationof the training opportunities it is prepared to offer(by trade).

The deed includes the following statements thatare important in accommodating the legalconstraints on procurement faced by the council:

The contractor has voluntarily and entirelywithout compulsion endorsed the purposesof the Construction Charter and agreed toimplement them.... (Procedures Manual)

In the event that any term condition orprovision of this Agreement is held to bea violation of any applicable law statute orregulation the same shall be deemed to bedeleted from this Agreement and shall beof no force and effect and this Agreementshall remain in force and effect as if suchterm ... had not originally been containedin this Agreement. (Deed of Agreement,clause 4)

The deed of agreement is collateral to the maincontract, so that the council has the power toterminate the construction contract if there is abreach of the agreement.

In the event the contractor is in breach ofthis Agreement the Council shall beentitled to treat such breach as afundamental breach of the (construction)Contract and may exercise all or any of itsrights or remedies against the Contractorunder or in respect of the Contract as ifthe breach was a breach of that Contract.(Procedures Manual, section 3.2).

This agreement is incorporated into theconstruction contract using the following clause:

The Employer and the Contractor haveentered into a contract of even dateherewith whereby the Contractor hasagreed to take steps to implement theManchester Employment in ConstructionCode. (Procedures Manual, Appendix 3)


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The above clause continues with reference to thecollateral nature of the agreement, and theemployers right of determination.

Voluntary codes

In other areas a code is adopted as a statement ofintent, and as a basis for obtaining the voluntarycooperation of the developer and contractor.

Example 17: Stirling Council’s Code ofPractice

Aim 25% of construction jobs should goto local unemployed residents

Process A Joblink scheme to screen workersand provide operative training

Finance Grants offered to contractors whoemploy Joblink participants; currently£40 per week for six months

Suppliers Database of local companies:contractors asked to use wherepracticable

Monitoring Weekly labour returns requested

Conclusion Contractors asked to committhemselves to the code

Stirling Council is a key partner in a public–private joint venture development called Forthsidewhich is expected to generate approximately 550construction jobs. The joint venture company iscommitted to maximising the job opportunities forStirling residents, especially unemployed peopleresiding in priority areas. To achieve this itincludes the following clause in the tender foreach contract:

Stirling Council operate a Local LabourAgreement in which tenderers arerequested to join and make a voluntarycommitment to their code of practice.Information on the Agreement and theobligations imposed upon tenderingcontractors in the operation of theAgreement are included with theinformation pack contained withinAppendix K. (Tender Preliminaries,Clause M)

The Appendix K referred to includes informationon the Stirling Joblink scheme and a requirementthat a prediction of the labour and sub-contractorrequirements is sent to the Council’s agents withthe tender. Standard labour requirement formsare provided: one for direct employment, anotherfor sub-contractors and another for the labourrequired for each sub-contractor. The contractor’sparticipation in the scheme is encouraged throughearly information and a pre-contract meetingbetween the contractor and the council’s Joblinkcoordinator. The main contractors have beenwilling to participate, but the involvement of thesub-contractors requires regular chasing.

Hull has recently reduced its Code of Practice forTraining and Employment from a 20-pagedocument to a single A3 sheet. This is avoluntary code which aims to establish an ethosof local recruitment among firms in theconstruction sector, including contractors, sub-contractors and suppliers. Companies are askedto sign a simple statement:

I/We agree to adopt the principles andactions stated in the Hull Local LabourInitiative Code of Practice for Training andEmployment.

In practice the code is a tool for developing arelationship with the employer, and it is throughthis relationship, and the subsequent marketing ofspecific services, that local training andemployment opportunities are obtained.

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Example 18: Hull Local Labour InitiativeCode of Practice

• The basic principle is that participatingcompanies will seek to offer employment andtraining opportunities to local people in thefirst instance.

• The Code of Practice is purely voluntary, andtherefore not contractually binding, butestablishes an ethos for employing localpeople.

• Locality: in construction developments andmajor regeneration areas within the city, theCode suggests that, ideally, 15% of theworkforce will live within a two-mile radiusof the site and 80% will live within the Hulltravel-to-work area.

• Eligibility: the participating company’sfunction has to be construction related, andincludes all manufacturing, supplies andservices.

• Responsibility: the participants agree to notifyHull Local Labour Initiative (LLI) of any jobvacancies; these are then passed on to all theLocal Economic Initiatives in the City. TheLocal Economic Initiatives hold registers ofsuitable applicants who are matched to theemployer’s job specifications.

• Grant assistance: Hull LLI assists employersto access relevant grant support which maybe available for recruitment, expansion orstart-up, subject to availability.

• Partnerships: Hull LLI was a founder memberof the Hull Employment Consortium andmanages several projects under the Environ-ment Task Force Waged Option for New Deal.Hull LLI is nationally recognised as a model ofgood practice and has established firm linkswith both national and European partners.

Planning agreements

Some local authorities have started to use theirplanning powers under section 106 of the 1990Town and Country Planning Act (section 75 of theequivalent 1997 Act in Scotland) to requiredevelopers to target the training and employmentimpacts of their development at local people. Thisincludes construction jobs and end-user jobs. Thepower can also be used to obtain funds for trainingand recruitment linked to the development site.

Example 19: Section 106 agreement inTower Hamlets

It is not possible to include a local labourinitiative as a condition of granting planningpermission. However, on certain develop-ments, it is possible to include such arequirement as part of a section 106agreement attached to the planningpermission. (Extract from a report to theLondon Borough of Tower Hamlets Planningand Environmental Services Committee, 25June 1997)

These powers allow the local authority and thedevelopers to enter into an agreement wherebythe developers agree to undertake (or providemoney for public agencies to undertake) worksthat are necessary to make the developmentacceptable. They are most typically used for theprovision of utilities, roads and environmentalimprovements beyond the boundary of thedevelopment site, where these provisions areessential to permit the development of the site.However, their use for training and employmentmatters is permitted where the parties agree, orwhere the requirements are related to a planningpurpose and relate to the development site.Recent analysis suggests that tacklingunemployment and social exclusion is a ‘planningpurpose’ (see Macfarlane, 2000).

In Greenwich the council has entered into over 17planning agreements, which have together raisedover £1.7 million for local training and job-matching services. This funding is used tosupport the activities of a local agency –Greenwich Local Labour and Business – whichprovides training for local people, job-matching tocontractors requirements, capacity building andin-service training for local firms, andcomprehensive monitoring of outcomes. Thisagency plays a key role in ensuring thatdevelopers honour their commitment toemploying local labour. It does not set targets foreach development, but works with thedevelopers, contractors and sub-contractors tomaximise the number of job opportunities that arefilled by local people, and the number of sub-contracts that are won by local firms.


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Over the first 28 months of operation the agencyhelped 1,500 Greenwich residents obtain work(many in construction), and 118 local firms wonsub-contracts with a value of £9 million.

Example 20: Use of planning agreements inthe London Borough of Greenwich

Over time the Borough has identified a number ofemployment-related elements for possible inclusionin the section 106 agreement. Developers are typicallyrequired to:

• endorse the activities of Greenwich LocalLabour and Business and be fully committed“to ensuring that local people and businessesare able to benefit directly (from thedevelopment)”: they have to agree to ‘cascade’the above commitment to contractors andend-users:

• give prior notice of local employment andbusiness opportunities;

• provide monthly monitoring information,including data on each worker’s gender,ethnicity, any disability and area of residence;

• provide a (serviced) on-site recruitment and/or training facility (on larger sites only);

• pay to the council a training sum “to supportthe recruitment, employment and skillsdevelopment of potential employees for thedevelopment from the London Borough ofGreenwich”. (from Macfarlane, 2000)

‘Build and train’ select tender list

Nottingham City Council has developed a ‘buildand train’ category within its select tender list.This is for use in situations where the proposedtask includes both a physical outcome (that is, abuilding) and a social outcome (that is, trainingand employing people from a specificcommunity).

The category was created by advertising withinthe Nottingham press for firms that wished to beincluded. To date only one firm (a socialenterprise) applied. They were awarded the firstcontract within the category: the provision ofsome work in the building of a new communitycentre. This was part of a SRB programme, andrecruiting local unemployed people was a keyrequirement.

Good practice• Look at ways to clearly specify your LLiC

requirements (either in the tender or in a codedistributed with the tender) so thatcontractors know what is expected when theyprice the work.

• Provide a mechanism to enable the locallabour agency to develop a positiverelationship with the developers and theircontractors at the earliest opportunity.

• In the long term, a contractual approach islikely to be more effective than a voluntaryapproach, because it is easier to obtain (andrespond to) monitoring information, andoutputs are more likely to be maintained evenwhen trading conditions mean that labourdemand falls.

17

In the last two chapters the focus has been onobtaining employment and training opportunitiesfrom contractors and sub-contractors. This is thelabour demand side of LLiC. However, evenwhere there is a high level of commitment to localrecruitment, it is unrealistic to expect thecontractor to:

• give local labour a high priority relative toother aspects of the contract, such as, cost,quality, timetable;

• take action to identify and motivateunemployed and often unskilled people, andorganise the necessary training programmesand so on.

So, the implementation of the LLiC commitmentrelies on good labour supply activities beingorganised by the client or, more likely, by publicsector agencies.

The labour supply activities clearly need to bedesigned with reference to the aims and prioritiesof the LLiC scheme or programme. In this chapterthe focus will be on the recruitment of localskilled and experienced workers. This willcontribute to local economic development byensuring that some of the investment in localconstruction work is used to pay wages to localpeople, which then circulate in the localeconomy. There is also an important PR spin-offwhen the development is seen to benefit localpeople. Subsequent chapters will focus on adultand youth trainees, and small businesses.

Job-matching

If the LLiC requirement includes a commitment toengaging local people it is important to set up adedicated job-matching service for contractors. In

most areas the usual Jobcentre provision is notadequate because:

• it cannot respond quickly enough – in theconstruction industry labour may be neededwithin 24 hours of notification;

• staff may not be experienced in assessing thesite-readiness of people putting themselvesforward for site work;

• there is a low expectation among constructionemployers that people referred by Jobcentreswill be appropriate;

• it is not possible to develop and maintainrelationships between the recruitment advisorsand site staff because the former do notusually have site knowledge and experience(which undermines their credibility) and donot have the time for regular site visits.

For a one-off LLiC project it may be possible towork with the local Jobcentre to provide anenhanced provision. However, in largerconstruction programmes and area-wide LLiCschemes (targeting a range of sites) a dedicatedjob-matching provision can be established (seebelow).

Example 21: Joblink in Stirling

Joblink is a targeted recruitment initiative establishedby Stirling Council, the Employment Service and ForthValley Enterprise (the local enterprise company). Itaims to develop a skills database and customisedtraining which will enable inward investors to targettheir recruitment at local people – especially atunemployed people living in one of nine priority areas(with high unemployment).

Labour supply activities

4

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There are approximately 4,000 people from acrossCardiff and South Glamorgan on the Cardiff Bayskills database. However, only about 2,000 ofthese are considered ‘active’ (that is, they are site-ready and make contact when looking for work).Of these the majority do not live in the localCardiff Bay area: staff suggest that there are onlyabout 100 tradesmen resident locally, and interestin construction work has declined as alternativetypes of employment have become available.

Before being included on the database anapplicant is interviewed by the job-matchingteam. Assessment is based on who they haveworked for, their response to questions abouttheir trade, whether they have tools and safetyclothing (indicating recent activity), and the staff’sviews about their motivation. However, inpractice the job-matching is not done using thedatabase: staff have a chalk-board where they list(by trade) people who have ‘phoned in to saythey are available for work. Thus, they areselecting from a changing group of perhaps 150people who they know are motivated andavailable. After vacancies have been filled staffcontact the employer to check that the referralsdid turn up (checking motivation), and areperforming satisfactorily (checking skills/experience). This helps to maintain the credibilityof the service and provide good output data.

In the early years of the redevelopment of CardiffBay many of the opportunities were on siteswhere there was a contractual commitment toemploying local labour (see Example 15, p 12).Now most of the jobs are on sites where no suchcommitment is operated, and vacancy informationcomes from marketing the services to contractors,sub-contractors and employment agencies (by sitevisits). During the operational period the labourmarket has also changed substantially: there isnow a labour shortage (so many contractors arekeen to use the service) and the demand forconstruction work from local residents hasdeclined.

The two-person job-matching team has aconstruction background. They have a target of1,100 job placements per year, but are currentlyachieving 150 placements per month. Wheresuitable Cardiff Bay residents are available theyare given priority. In nine years of operation ithas placed over 10,000 people into constructionjobs, most of them outside of the Bay area.Where a job cannot be filled from the Cardiff area,

the search will be widened to other Jobcentres –the team try to fill every vacancy.

A potential danger of job-matching from a self-selecting list is that the most pro-active andreliable workers will tend to be referred to siteahead of the less-motivated, which could reducethe effectiveness of the service in targeting thelong-term unemployed.

In nearby Bristol the job-matching is based in OnSite Bristol, a dedicated area-wide agency. Theteam includes a secondee from the EmploymentService who provides a job-matching service forconstruction employers. The staff have twodatabases: a Hanlon system (see Appendix E)which includes information collected by On Sitewhich is used for job-matching, and one providedby the Employment Service (which can only beused by the secondee) which picks up new‘construction’ registrations from Bristol Jobcentres.The operation is similar to that in Cardiff, butwhere people repeatedly refuse jobs or fail to turnup, their employment status is checked on theEmployment Service computer and those who areregistered unemployed are reported to benefitofficers. There is no sympathy for people whouse On Site as evidence that they are available forwork, if they are not actually prepared to take jobs.

In 1998, On Site Bristol placed 273 people inwork from the register. In 1999 the team receivedabout 30 job opportunities per week. Their abilityto fill these vacancies depends on the duration ofthe job (people are reluctant to take short jobs)and on the volume of work in the trade at the time.

Liverpool’s Employment Links is an agencyproviding recruitment services for employers in arange of sectors, while targeting recruitment atresidents of the 11 Pathway areas in the City. Theconstruction team includes seven staff: a manager,three link officers, a database coordinator and twosupport staff.

Access onto the local labour register is done vialocal Jobcentres and a network of eight outreachoffices in the partnership areas. EmploymentLinks has trained 15 officers in these recruitmentcentres to interview the candidates; checking theirtraining (and certificates), their previous workhistory and any training requirements. This datais sent to the central register. When a vacancyarises all suitable candidates are referred to thesite and the contractor is responsible for selection.

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Example 22: On Site Bristol – job-matching service

Function Activity

Database Both the Hanlon programme and the Employment Service’s LMS programme are used(on separate computers).

Registrations • People registering at Bristol Job Centres are automatically recorded• People calling at local sites are referred to the register• Word of mouth referrals

Interviews Each person is interviewed to check where they have worked, and who for, their tradeskills (and certificates)

Job-matching • Regular site contact to promote the register: vacancies are faxed in• Telephone people to check availability and interest in the vacancy• Give interested people the site contact

Follow-up • Check who turns up with the site• Regular visits to site to maintain relationship and check performance

Example 23: Liverpool Employment Links’ construction activities

Service Details

Obtaining job opportunities Helping developers to specify their LLiC requirements and obtaincontractors commitments – a local labour agreement is often used

Encouraging employers’ actions Contacting contractors to offer the job-matching service

Maintaining contact with site staff

Job-matching Developing a database of construction labour and referring suitablecandidates to site for selection

Monitoring Inspecting and verifying contractors’ site labour registers, and reportingto the developers on cooperation and outcomes


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Site-based recruitment centres

On large sites it has been found helpful toestablish a recruitment office on the site. InCardiff Bay the first such office was established in1990 using accommodation provided and servicedby the contractor (see Example 15, p 12). Thisapproach was extended to other large sites and atthe peak of construction there were seven staffproviding site-based recruitment services, allseconded from the Employment Service.

The key difference between the operation of thesite office and other Jobcentre services is thespeed of turnaround – many vacancies can befilled within 24 hours. Through the site office theEmployment Service is able to obtain and fillvacancies in a sector where it normally does verylittle business.

A construction employment agency

Stratford Labour Hire in East London operates as anot-for-profit employment agency supplying staffto contractors, primarily in the construction sector.It employs the people involved, and charges themout to employers at a premium of approximately30%. The premium includes employers’ NationalInsurance and holiday pay (providing four weeksper year), producing an average net premium ofabout 10%. In practice, charge-out rates areadjusted to reflect market expectations: a lowermark-up is placed on unskilled jobs (5-7½% net

premium) and a higher one on professional jobs(12½-15%). The net incomes are used to pay theproject’s operating costs.

When a placement is offered a permanent job theagency charges the new employer a placementfee. This is typically about £250.

The project operates a Hanlon skills database.Applicants are placed in one of three categories:

• Site/job ready: for those who have appropriatequalifications and can show evidence ofseveral years relevant work experience.

• Improver: recent qualifiers from trainingestablishments who do not have sufficient siteexperience to fit the above category.

• Trainee: someone participating in (or preparedto undertake) training at a recognised trainingestablishment.

Applicants who do not fit into any of the abovecategories are given careers counselling, andeither entered as a trainee or referred to othersources of advice and guidance. Trainees andimprovers are offered to employers (and paid) atrates that reflect their skills and productivity.

The agency currently has about 1,400 constructionworkers registered. It places about 200 people inwork per year and has about 300 people on site atany one time. It is not known how many of theregistered people are ‘live’, but a significant

Example 24: Cardiff Bay on-site recruitment offices

Activity Description of services

Referral point People approaching the site looking for work are referred to the recruitment office,saving the contractor time

Skills register A skills register is maintained, incorporating people approaching the site, and referralsfrom Jobcentres, construction training providers and community employmentagencies

Marketing Daily contact with contractors and sub-contractors makes it easy to market the job-matching service

Job-matching A rapid job-matching service enables the contractors’ vacancies to be filled within 24hours

Re-registration When contracts finish the local employees can easily re-register to find further work

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number of them contact the agency when they areseeking work.

Stratford Labour Hire currently has sales of about£4 million per year. This produces a surplus ofabout £200,000 per year, of which one half paysfor the agency’s operating costs and half pays fortraining activities. Most of the clients are localauthority direct labour organisations. To get thispublic sector work Stratford Labour Hire typicallyhas to enter a competitive tender, with the criticalelement being the wage cost and the premiumthey intend to charge.

The preference for public sector clients has arisenbecause they are reliable payers. A key issue forthe recruitment agencies is cash-flow, as theemployees are paid weekly and clients areinvoiced monthly. The agency cannot afford todo business with commercial companies who maydelay payment. This problem limits an approachthat could otherwise do much to feed local peopleinto jobs on major local developments, both insocial housing and commercial constructionsectors of East London.

As far as is known, there are no other LLiCagencies operating in this way, although manyprivate sector agencies operate in the constructionsector.

Good practice

• To maximise local job opportunities organisea dedicated job-matching service forconstruction employers

• Where there is a substantial programme ofconstruction there are benefits for theEmployment Service in being involved: theyget access to jobs they would not otherwiseobtain and fill

• It is critical that the suitability and experienceof the people offered to employers is properlyassessed: this is best done by people with goodtrade experience and an understanding of theconstruction industry

• There must be a follow-up on people offeredto site: did they turn up for interview and tostart, and was their performance good?

• There must be regular visits to sites to developand maintain relationships with contractors’and sub-contractors’ staff

• There needs to be a process which allows rapidjob-matching, for example, capacity for jobsto be faxed in and telephone or pager contactwith potential workers

• In practice, much job-matching is done frommanually-created lists of people who haverecently made contact to say they are availablefor work (rather than from computerdatabases): this increases the response ratebut may disadvantage those local people whoare not well organised or well motivated

• Aim to fill every vacancy: if local people arenot available use neighbouring LLiC schemesor Jobcentres to find labour for the contractor


22


If a key aim of LLiC is to tackle long-termunemployment and social exclusion it will beessential to include construction training in theprogramme. Experience in a number of areassuggests that over 50% of those registered asseeking construction work have no recentexperience in the industry and are probablylooking for any sort of unskilled work. Others willhave recent experience, but are unlikely to havesuitable qualifications.

There are several reasons why the provision oftraining is important:

• With increased on-site mechanisation and off-site pre-fabrication the number of unskilledjobs on construction sites is continuing todecline.

• Recent innovations aimed at improving healthand safety on sites (for example, regulationswhich make the developer jointly responsiblewith the contractor for health and safety onsite) means that all workers will soon need tohave their skills accredited, to have currenthealth and safety certificates, and to havecurrent plant operating ‘tickets’ whereappropriate.

• Gaps in the construction labour market are forskilled workers – only by training will localpeople achieve long-term employability.

• The industry is reluctant to employ peoplewho have not entered as school-leavers, partlybecause in the past many older (18+) entrantshave been inadequately trained.

However, good quality construction training takestime and is expensive. This makes it unattractivefor many training providers, and in many areasthere is no appropriate training provision. This isan issue that many LLiC schemes need to tackle

early: it takes time to organise appropriatetraining and the building work will not wait!

Recruitment of trainees

In most areas apprenticeships for school leaversare organised by the industry training bodies,principally the CITB. However, the number ofapprenticeships they can offer depends on thenumber of local firms willing to take on anapprentice. As can be seen in Table 1 (p 2), thisoften results in far fewer apprentices beingrecruited than the industry needs. The balance ofthe industry’s new recruits need to come fromother sources.

Interest in construction work varies betweendifferent communities. In some areas a strongertradition of manual trades survives: in others thecultural or peer-group norms make constructionwork a less favoured option. These variances areexacerbated by:

• the perception of construction as providinginsecure and poorly paid work and poorworking conditions – local skills surveyssuggest that typically no more than 10% ofmen are interested in construction work, andperhaps 1-2% of women;

• the bad experience that many unemployedpeople have had of training: in the past peoplehave been coerced on to low quality schemesthat have not resulted in a job;

• a lingering perception of construction as anindustry for which you do not have to betrained.

Low levels of interest in construction work and alow commitment to training can make it difficult

Training

5

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to recruit trainees. Even where there are highlevels of unemployment, interest in constructionopportunities should not be taken for granted.

In existing LLiC schemes, recruitment for trainingprogrammes may include:

• regular displays and attendance in Jobcentresto explain what is available;

• regular briefing of Jobcentre and New Dealadvisers, and careers advisers;

• promotional events in shopping centres andother places with a high populationthroughput (for example, doing a buildingdisplay to attract interest);

• taster sessions in the training environment sothat people can try it out: for example, inLewisham women-only taster days areorganised;

• press articles and items in local authority andtenants’ newsletters.

Just distributing leaflets will not be sufficient,although once the training programme isestablished and trainees progress to work, ‘wordof mouth’ will begin to generate interest.

In both Bristol and Tower Hamlets the LLiC teamshave sought to attract more school-leavers intotraining. On Site Bristol have developed a trainingmanagement function and use their contacts withlocal firms to increase the number of apprenticestaken on. In 1999, 73 school-leavers obtained anapprenticeship on the scheme.

Example 25: On Site Bristol – apprentice recruitment process

Action Process

Generating interest Close working with careers services to access careers teachers in schoolsOrganise small-group events in every secondary school, including businessgames, talks and industry visits

Recruitment Applications are received – 300 in 1999

Interviews and assessments All applicants take the CITB test which is marked immediately and results fedback into an interview; selection is based on a mix of test results; motivationand evidence of a stable family background

Pre-vocational training Selected trainees attend a three-week college course operating for site hours(8.00am-4.30pm)Health and safety and some basic tool training is provided, using collegefundingTrainees only receive a £5-per-day travel allowanceTrainees that miss more than four full days (apart from notified sickness) donot proceed

Selection by contractor Local firms are asked to take trainees on the basis that On Site prepare andmanage the paperwork, and resolve personnel and other training/performanceissuesSuccess in placing trainees relies on the good reputation of On Site withcontractors

Initial employment Trainees become the contractor’s employees for a six-week trial period, paid atindustry rates (currently £83.20 per week)

Training If the appointment is confirmed the trainee starts day release at collegeThe programme is timed to coincide with the start of the college year

Training

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In Tower Hamlets the LLiC team have developedthe ‘Construction challenge’, a two-day workshopfor 32-36 secondary school children which aims:

• to encourage young people to look at a careerin the construction industry;

• to help develop links between education andthe construction industry;

• to give young people the chance to sampletrade skills in an enjoyable way;

• to show the stages involved in building ahouse.

A workshop is organised for every secondaryschool in the borough. Each event costs about£2,000 and is mainly funded through companysponsorship. In addition, the local authority andlocal contractors provide the speakers and thetradespeople that work closely with the students.The approach is now being extended to an‘Engineering challenge’ which involves theconstruction of a bridge and aims to generateinterest in the professions involved withconstruction.

Example 26: The ‘Construction challenge’ programme

Day one

Morning

• Self-appraisal exercise: students look at their current skills

• A guest speaker talks about career path planning

• Students split into groups and look at how people reach their individual careers

• A guest speaker from planning or surveying talks about building regulations, maps and design

• Groups choose a site and design a floor plan for a house

Afternoon

• A guest speaker talks about the importance of site safety

• Students work together to produce a site safety poster

• Students complete a ‘spot the danger’ questionnaire

• The students form two groups, each sets up a ‘Construction challenge’ building company and givesit a name

• The students allocate roles within the company, and produce a business plan

• The groups order materials to build their house

Day two

Morning

• Trade advisors give an insight into their particular field (such as plumbing, carpentry, brick-laying) to thestudents who have been allocated these tasks in the business plan

• Each group collects the materials they ordered and checks the ‘delivery’.

Afternoon

• The groups use their trade skills to build a flat-pack house

• The house is assessed for quality, cost and its potential profit if it was placed on the market

• Participants evaluate the progress they have made as individuals and a team

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Where an LLiC project requires a high level ofcommitment and motivation, particular care mayneed to be taken in selection of trainees. PenwithHousing Association in Cornwall has worked withCarey Consulting on a programme that hasinvolved up to 10 trainees working on housingdevelopment sites. From the contractor’s point ofview this has worked because of the high level ofmotivation and pre-site training and support givento the trainees. This is a reflection of the carefulselection process used.

In contrast, the Nottingham adult trainingprogramme obtains most of their 60 new traineeseach year through New Deal referrals. Manyrecruits have poor skills and a range of social,welfare and motivational problems. The schemedoes not apply any selection criteria, butcompensates for this by providing good welfaresupport and mentoring.

LLiC schemes are typically targeted at people whowould otherwise find it difficult to accessconstruction training and work. For school-leaversa critical selection issue is the CITB entry testwhich requires a good basic level of literacy andnumeracy. Young people who fail this cannot

progress to training managed by the CITB, andwhere there are more young people seekingapprenticeships than firms willing to offer places,even people who pass the test will not enter theindustry.

In response to this Tower Hamlets LLiC team havedeveloped ‘Pathway to Skilled Employment’ whichaims to help lower-achieving young people toobtain and complete a Modern Apprenticeship ortraineeship. It builds on the LLiC team’s strongcontacts with schools (via the ‘Constructionchallenge’) and their contact with contractorsworking locally (via the team’s monitoring work),to provide an extra level of pre-site training andassessment, and a training opportunity that wouldnot usually be available to these young people.The LLiC team plays a crucial role as initiator, asindependent mentor for the young people and asa problem solver.

The initial training starts on the Monday afterGCSE exams finish. In this period (which is paidfor by the local TEC) the trainees only receivetheir fares plus £2.00 per day for lunch.Completion of an NVQ 1 during this unpaidperiod is seen by potential employers as a sign of

Example 27: Typical Carey Consulting ‘build and train’ recruitment programme

Stage Activities

Promotion Press and community advertising, leading to exhibitions with staff attendingat Jobcentres and relevant community facilities

Application forms Used to check eligibility (in relation to funding sources), the need for training,and the level of interest

Initial discussions An individual discussion with each applicant to explain how the project works;what is provided and expected; the position on unemployment benefits (theirnet financial position should they participate); whether the applicant wants toproceed

Partner interview A shortlist of applicants is interviewed, and the partners (that is, the developer,college project coordinator and so on) select a group

Pre-induction meetings 6-8 group meetings set on different days and at different locations, withaccess becoming increasingly difficult. The aim of this is to provide moreinformation about the programme and the trainees, and to test the trainee’scommitment

Selection The project coordinator selects the starting group, and ‘reserves’

Training

26


commitment. Prior to starting on site they receivea basic tool-kit: this is on loan for the first year butthen becomes their own.

Once the trainees join a company they participatein the normal industry training routes (such as dayrelease) with the expectation that they willcomplete an NVQ 2 within 12 months and NVQ 3before the end of their apprenticeship/traineeship.The CITB ‘Youth New Entrants’ arrangements areused to provide a route for young people tobecome trainee general construction operatives,rather than craft trainees.

On Merseyside the Speke Garston DevelopmentCompany developed a pre-recruitment trainingapproach for school-leavers. This was initiallydeveloped with several sheet-cladding contractorsbecause many of the new buildings have sheet-cladding. They agreed to offer ModernApprenticeships to local young people whosuccessfully completed a pre-recruitment course,including passing the CITB entry tests.

The six-week pre-recruitment training was basedas Bolton College and funded by the SpekeGarston Partnership. The cost was £1,380 pertrainee and included an outward bound week.Recruitment was done through local agencies inSpeke, and a high priority was given to ensuring

that both parents and participants were fullycommitted to the scheme.

A total of 12 trainees started the course, 11completed the pre-recruitment training and wererecruited as apprentices; eight are known to beemployed after 12 months.

Example 29: Speke Garston’s roof sheetingand cladding induction course – key elements

• General induction

• Health and safety, site safety, roof safety

• Use of hand tools and material handling

• Introduction to terminology, regulations andresponsibilities

• Sheeting and cladding: induction, andpractical skills

• Factory and site visits

• Scaffolding: introduction, theory and practicalskills

• One week of outward bound activities (in theLake District)

• Fitness assessments

• Practical tests on using and handling materials

• Written tests on site safety and handlingmaterials

Example 28: Tower Hamlets Pathway to Skilled Employment programme

Process Timetable Participants LLiC team’s role

Promotion November-March LLiC team Organise and deliver theprior to recruitment Schools activity

Careers service

Recruitment January-May LLiC team and applicants Interview and select

Initial training June-September Laing’s Training Centre and Mentoring(12-16 weeks) trainees Organising apprenticeships

Trainees aim to obtain NVQ with contractorsLevel 1 and the relevanttrade entry tests

Modern September onwards Contractor and trainee Mentoring for both traineeApprenticeship (for three years) CITB acts as training manager and employer

and makes training payments Finding new employer ifwhere trainee has passed the necessary‘entry test’ during initial training

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This approach is now being broadened into aprogramme that will provide pre-apprenticeshiptraining for school-leavers in a range of trades.

The Young Builders Trust ... works withdisaffected youth, through site-basedvocational and empowerment trainingaimed at enhancing employmentopportunities through building homes forthemselves and others in need. (YoungBuilders Trust, 1998, p 2)

In Havant, Portsmouth Housing Associationdeveloped a Youthbuilding project with help fromthe Young Builders Trust. The scheme wastargeted at disaffected young people and aimed tohelp them obtain basic vocational skills (perhapsto NVQ Level 1) and ‘employability’ skills, fromwhich they might progress to a traineeship orapprenticeship.

The trainees were engaged first through a NewDeal full-time education and training option (thatis, on a Benefit Plus basis). After 12 months theywere employed by the contractor on an‘improvers’ rate of £140 per week. Off-sitevocational training was offered: four days perweek in the pre-site period and two days perweek thereafter.

Throughout the programme time was spent onbasic skills and life-skills training. There were alsoteam-building activities, including outward boundin the Lake District and more local activities. Inretrospect the project felt it should have donemore team-building activities and less life-skillswork. Furthermore, although the activities werefun they did not put the participants under stresswhich meant that behaviour patterns were notexposed and, therefore, were not adequatelyconfronted.

In general attendance was poor (between 60-70%)and productivity on site was poor, especiallywhen working as a group. It was felt thatperformance improved when the trainees wereworking with the contractor’s staff, rather thantheir peers. Of the nine trainees who started onsite, one left to take up a job and two are beingretained by the contractor and will continuetraining. The remaining six are being given job-search support and could progress if anemployment opportunity can be found throughthe Portsmouth area-wide LLiC scheme.

Pre-site training

With the exception of school-leavers it is expectedthat people seeking work on construction siteswill have undertaken basic training (in health andsafety, use of scaffolding, lifting and basic toolsand so on) and have some degree of productivecapacity. Pre-site training is therefore vital forpeople who cannot demonstrate that they meetthese criteria.

In the past, the provision of training for peoplewho missed the school-leavers apprenticeships,has been through training centres. In the 1970sthese were run by the government, in the 1980sthey were privatised and in the 1990s they largelydisappeared. The main problem is that theprovision of training to construction industrystandards is expensive and takes time. Withlimited budgets most training providers havefocused on other industrial sectors. The result isthat in many areas the only construction trainingavailable is in colleges which provide training forapprentices.

LLiC schemes have found problems in using thesefacilities because they cannot meet the requiredspecifications. For example:

• continual (or at least monthly) intakes, andflexible progression times to sites: colleges areoften organised around an annual intake andthree college terms;

• fast progress through the curriculum in orderto cover most elements of NVQ 2 in about sixmonths: this is a challenge to collegedepartments which are designed for dayrelease training;

• continuous assessment for NVQ accreditation,and a willingness to accept site work asevidence of achievement;

• continuous and rigorous monitoring andreporting of attendance and performance,which is necessary to overcome problems oflow motivation and to provide evidence tofunding bodies;

• a positive attitude towards the potential of thetrainees: college tutors may see theunemployed as poor quality workers and/ordisruptive.

These are significant barriers to adult (18+) entryto construction training, and may take severalyears to overcome.

Training

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Example 30: Adult Training Centres –Portsmouth

In Portsmouth the pilot LLiC programme identifiedthat the local college was not geared up to deliverall-year training for long-term unemployed people.The problem was alleviated by establishing three newadult training centres. All are run by the college, butwith an ethos, operating times and staff terms andconditions of service which are different from therest of the college. Two are located close to targetrecruitment areas, and one close to the main harbourdevelopment site.

Training programmes commence at four- or six-weekintervals. The training centres do not close for longholidays, which facilitates a ‘roll-on/roll-off’ trainingprogramme. The block entry allows initial training(health and safety, access platforms and equipment)to be done in a group, which is more cost-effective.Trade training in bricklaying, carpentry and joinery,painting and decorating and general constructionoperations is available through individual learningprogrammes. In addition, two bespoke courses ininterior refurbishment (a multi-skill course) andinterior design and decoration (leading to self-employment) are offered.

The LLiC team (which is part of Hampshire TEC) holdsthe funding for the training and enters into contractswith the providers. This client role is consideredimportant in obtaining appropriate training provision(such as, weekly attendance and progress reports).LLiC staff attend the training centres daily to monitorattendance and deal with any concerns from thetrainees or staff. This level of involvement is seen asimperative. It is helping to change the approach ofsome of the ‘traditional’ tutors who were consideredto be unsupportive towards to unemployed adults.

In Lewisham the Community RefurbishmentScheme (CRS) has overcome the pre-site trainingproblem by establishing a dedicated trainingcentre. The trainees all start in September tocoincide with the college entry. They spend sixmonths in full-time pre-site training. During thistime they spend one day at college and four daysin the training centre. Here they do more practicalwork under the guidance of a qualified trade tutor,and get help on basic skills (literacy andnumeracy) and any social or welfare problems.

Waltham Forest HAT operated a constructiontraining centre for a number of years. However,after several years there was a fall in demand fortraining in their target population (which waslimited to three housing estates), and alternativetraining arrangements were found.

After five years of operation, the Nottingham CityWide Construction training programme hasdeveloped an intermediate labour market project(NECTA) to help overcome the problems of initialassessment and training. NECTA takes on buildingand environmental works contracts and employsnew entrants to the adult training programme onthese sites. The training is provided on site byworking with an experienced tradesperson, andthrough off-site training at a local college. Initialtraining is provided in essential skills (health andsafety, scaffolding, use of abrasive wheels andpower tools) and then trainees go onto an NVQtrade training programme. A range of basic skillscourses are also available (literacy, numeracy,ESOL, IT, communication skills).

The supervisors are all experienced tradespeoplewho are committed to their training role. They areall trained as NVQ assessors and thereforeunderstand the training requirements. However,success in their role requires specificcharacteristics as there can be challengingbehaviour from the trainees: the job requires self-confidence, firmness, tolerance and the ability tocope with considerable frustration.

The trainees stay with the company until boththey and the NECTA staff feel that they are readyto move into a conventional employmentsituation, that is, they are committed toconstruction work, have established good workhabits and have some useful trade skills to offer.The conventional site opportunities are eithernegotiated by the council’s City Wide Constructionteam, or sought by the individual in response toadvertised vacancies.

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Site work

There are two key issues about the progressionfrom pre-site training to site employment: timingand low productivity.

Timing

Timing problems usually arise from twocircumstances:

• delays on site which mean that the workopportunities do not arise at the point wherethe pre-site training finishes (for example,when the college closes for a holiday);

• the duration of the work on site varies for eachtrade, and it may not be possible to provide atrainee with sufficient site experience tobecome fully productive.

These timing problems may be handled byallowing for some flexibility in the length of timetrainees remain in the training centre. In Cornwallthe Penwith Housing Association schemes have aflexible arrangement with the college: if site workis delayed or dries up, the trainee returns to full-time training while more work is found. This ispossible because in this scheme the trainees areemployed by the housing association, using grantfunding.

Another common pattern is for LLiC schemes todevelop relationships with a number ofdevelopers or local contractors, so that there are arange of potential sites available at any one time.The schemes in Lewisham, Portsmouth andPenwith all started with the aim of placingtrainees on a limited number of large sites, buthave moved to placing them with a number sitesor contractors. This may work more easily whenthere are skills shortages: at other times it may beimportant to ensure that a range of contractorshave a contractual commitment to taking thetrainees.

Low productivity

Problems of low productivity are also likely to beeased when there is a skill shortage: contractorsare willing to sustain the trainees on site untiltheir output improves because they would find itdifficult get other labour. Another approach is toprovide a wages subsidy to help compensate thecontractor for:

• the low productivity relative to the level ofwages that have to be paid under the WorkingRule Agreement and Minimum Wagelegislation;

• other costs associated with taking on trainees,for example, the loss of production from othertradespeople who are supervising the trainees,for spoilt materials and abortive work, and forextra administration.

Example 31: Lewisham CRS programme

Stage Activity Trainees’ funding

Pre-site training 26 weeks in the CRS training centre Benefit Plus, either through New Deal(four days each week) and college full-time education and training option(one day each week) covering health (18-24), or Work Based Training for Adultsand safety, trade skills, and basic skills (25+)

Site employment Employed by CRS but based with a Paid by CRS: currently £140 per week,contractor (free of charge) rising to £160 and £200Attends college on day release

Progression Ongoing employment by existing Employer pays wages, or return tocontractor or another (with CRS help) unemployment

Training

30


The arrangements for the wages subsidy vary withthe nature of the LLiC scheme and the scale ofpublic funding that is available.

In the Lewisham CRS the trainees are employedwithin the council’s regeneration department andplaced free of charge with contractors. The sameapproach is used by Carey Consulting with thePenwith Housing Association projects. This makesit relatively easy to obtain a contractorscooperation, but makes the schemes relativelyexpensive.

In Portsmouth the wages subsidy helps tocompensate the employer for the initial lowproductivity of the employees, but since thesubsidy reduces each six weeks there is anincentive to increase the employees’ productivity.There is a wages subsidy agreement for eachtrainee: this is an official Council Order which

identifies the employer, the employee, the sumsto be paid and the agreed period of employment.To obtain payment the employer must pay wagesin accordance with the improver rate in theWorking Rule Agreement (about £140 per week),provide weekly monitoring forms and submit aninvoice. If a contractor finds they cannot retain atrainee, that person will be offered to otheremployers with the remainder of the wagessubsidy. Before placing trainees on site the LLiCstaff carry out a health and safety inspection. Eventhough there is no legal duty of care for employedadult placements, the LLiC will not place traineeson a site that does not meet the required healthand safety standards.

In Glasgow, Queens Cross Housing Associationintroduced four-year maintenance contracts butrequired each contractor to employ at least onelocal apprentice. In the first round of contractsthey offered wages subsidy for the localapprentice: 100% in year one, 80% in year two,75% in year three and 50% in year four. Theseemployers were also obtaining CITB grantstowards the training costs (but not the wagescosts, as that would have been ‘double funding’).In the second round of contracts Queens Crosssucceeded in persuading the contractors to recruitthe apprentices without any subsidy.

Nottingham City Wide Construction operates atraining support fund for its adult trainees. Thismakes available a wages subsidy sum of £80 perweek (£4,160 per year) that is paid to anemployer with the trainee’s agreement. The aim ofthis arrangement is to give the trainee some

Example 32: Summary of wages subsidy arrangements

LLiC scheme Wages subsidy arrangement

Lewisham Trainees provided free on site for 18 months

Penwith Housing Association and Trainees provided free on site for 6 monthsCarey Consulting

Reidvale Housing Association Pay £4 per hour extra to maintenance contractors who take on anapprentice

Nottingham City-wide Construction £80 per week for up to 52 weeks

Hull £30 per week subsidy for 26 weeks

Portsmouth LLiC Scheme A subsidy which reduces from £104 to £42 per week over 26 weeks(see Example 33)

Example 33: Portsmouth and South EastHampshire tapering wages subsidy

Weeks Duration Rate Total cost

1 to 6 6 weeks £104 £6247 to 12 6 weeks £78 £46813 to 18 6 weeks £62 £37219 to 26 8 weeks £42 £336

Total £1,800

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degree of control over their training programme:the employer does not get paid until the traineeagrees that the terms of the support fundagreement have been met. This ensures that theyare allowed time off for training, and are givenappropriate work and supervision on site.

It should be remembered that many contractorswill be able to obtain grant payments from theCITB towards the costs of apprenticeships andsome in-service training for adults. Fundingschemes change and information on what grantsare currently available can be obtained from localCITB offices.

Typical sources of funding for the wages subsidiesare government urban regeneration programmes,and the European Social Fund.

Social and welfare support

Success in enabling the long-term unemployedand underachieving young people to enter theconstruction industry relies, in many cases, on theavailability of social and welfare support. This willbe of increasing importance as unemploymentlevels fall and most of the easily employablepeople get jobs, and in schemes which aretargeting the most difficult-to-place local residents.

Some of the most successful schemes seek todevelop a long-term relationship between theproject staff and the trainee. In the early days oftraining and employment it is essential thatproject staff know where the participant should be(for example, at college or on site) and wherethey are. If the participant cannot be located thenaction must be taken immediately (for example,

Example 34: Nottingham’s training support fund agreement – requirements of each party

City Wide Construction Trainee Employer

Administer the grant on behalf Comply with the terms and Offer at least 52 weeksof the trainee conditions of employment employment at agreed wages

Supply a tool kit and pay Attend college and other courses Ensure on-site and off-site trainingcollege fees agreed in the training plan as set out in the training plan

Monitor the trainee’s progress Reimburse the cost of tools and Participate in monthly reviews– at least monthly training fees if leaving the with City Wide Construction and

programme in first 26 weeks the trainee

Ensure trainee’s timesheets aresigned and returned monthly

Reimburse City Wide Constructionfor tools and college fees whenthe trainee completes 26 weeksemployment

Training

Example 35: Portsmouth HA Youthbuilding –recruitment issues

Key recruitment issues were:

• high debts levels: some young people“couldn’t afford to participate”;

• latent aggression that was not identifiedthrough the ‘fun’ teambuilding exercises, butquickly emerged in stressful situations;

• the ‘creaming’ effect of New Deal, so that mostof the referrals were people that could not beplaced elsewhere.

• A high proportion of the Youthbuilders hadsocial problems (such as offending behaviour,substance abuse, homelessness). The schemewould have been easier to manage with adifferent mix of participants, but this wouldhave betrayed its intentions which were totackle social exclusion among young people.

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going to their home, or challenging the participantwhen they do reappear). Regular contact with theparticipants while they with at the trainingprovider or on site will help to ensure that theyremain motivated, that the trainer or employer isproviding what they agreed, and that disputes orproblems encountered by the participant are dealtwith before they lead to either dismissal or awalk-out.

Continuity is also important. In Lewisham thetrainers who work with the participants duringtheir first six months continue to meet their traineeson site or in the training centre. As tradespeopleand qualified trainers they are also able to challengeinappropriate training practices. In the CareyConsulting build and train model a key element isthe appointment of an apprentice supervisor whosupports the trainees in both work and non-workissues, organises their work and trainingprogrammes with the contractor and college,provides on-site assessment for NVQ, maintainsweekly records of attendance and performance,and generally resolves problems for the trainees,contractor or college. If the trainee is absent fromsite or college without agreement, the supervisoris quickly out to their home to find out why.

The Carey schemes also benefit from theappointment of a welfare officer who is based in

the college. This person provides life-skillstraining and access to literacy and numeracysupport, and also helps address social problems(such as substance abuse or homelessness) andbenefits issues. They also organise additionaltraining if site work stops (for example, due tobad weather).

In Nottingham a key element in the success of thescheme is the level of progress monitoring andsocial and welfare support provided by the CityWide Construction team and NECTA. This support:

• helps the trainees to overcome social, welfareand motivational problems that are a barrier toboth learning and employment;

• helps the college to meet the specific needs ofpeople who are not typical of their tradetrainees;

• gives employers the confidence to take on atrainee: they know the trainee will get supportand that alternative employment will be foundif necessary.

Although the trainers/employers have initiallybeen reluctant to give time to the formalmonitoring meetings required by City WideConstruction, over time they appreciate thebenefits in trainee performance which isproduced. In particular, if problems are identified

Example 36: Nottingham City Wide Construction (CWC) social and welfare support activities

Activity Provider Procedures

Recruitment and progression CWC training coordinator Ensure training and personal development plansare developed with traineeManage the training and social/welfare supportprocesses

NECTA employment NECTA welfare officer Weekly progress review involving the trainee, thesupervisor and the welfare officerDaily support and problem resolution

College training CWC support worker The college pay CWC to base a support worker inthe college; the worker visits each training session,maintains attendance records, monitors traineeprogress and sorts out problems for the traineeor the employer

Site employment CWC training coordinator Negotiates placementsConducts monthly review with the trainee and theemployerSorts problems for either party

33

and solved the wastage factor in the recruitmentand training programme is reduced.

A high proportion of the trainees in NewcastleCityworks require some form of social andlearning support. This is provided by a team offive training support officers (servicing 250trainees and apprentices). The team is responsiblefor recruitment and induction, managing thetrainees’ individual training programmes(including formal reviews and so on) andsupporting the trainees on non-work matters. Thelatter have included bereavement, drugs,homelessness, family issues, money and benefits:these are all issues that can lead to a traineedropping-out. Cityworks makes great efforts toensure that this does not happen – their drop-outrate is between 10% and 20%. Several of thesupport officers have formal counselling skills,and all have access to a database of specialistagencies that can provide support.

Continuing training

LLiC schemes which enable local orunderachieving school-leavers to obtain a ModernApprenticeship or a CITB traineeship do not havea problem with continuing training as the traineesfit into the industry’s main access route. However,a problem facing trainees who miss the youthentry routes is that the completion of even anNVQ Level 2 will not be achieved without acommitment to ongoing training. Although thetime required will vary between trades andbetween individuals, the experience of a train andbuild project in Gosport (Portsmouth HousingAssociation) was that this requires approximately120 days of off-site training. This level ofqualification is considered to be the minimum: theindustry regards a full trade qualification as NVQLevel 3.

There are few LLiC schemes that can ensure thelong-term training of participants. The LewishamCommunity Refurbishment Scheme has theadvantage of a two-year training period in whichthe trainees are fully funded and employed by theproject rather than by contractors. In this periodthey can ensure continued day release training. InNottingham the funding extends for one year.Three methods of enhancing the prospect ofcontinuing training for adult entrants are:

• placing trainees with local small- and medium-sized contractors who will provide permanentemployment and therefore have an interest intheir workforce development;

• encouraging a commitment to achieving NVQLevel 3 among the trainees;

• working with the employers and the CITB toensure that the employer can receive CITBattendance and achievement grants for theiradult trainees.

Small employers may need help in setting up andmanaging the systems that allow CITB funds to beclaimed. On Site in Bristol has some experience ofthis in relation to plant operator training as wellas youth apprenticeships.

Greenwich Local Labour and Business has focusedsome of its training effort on upskilling localpeople. One aim of this training is to increase theearning capacity of local residents, either byhelping them to obtain a qualification (forexample, the earnings of an experienced buildingoperative can increase from £5.00 per hour to£8.50 per hour if they obtain a plant operatingticket) or by increasing their productivity. As wellas plant operating courses they have providedshort courses in speed-painting, speed-bricklaying, scaffolding and streetworks. Othercourses have been run in response to changinglegislation, when experienced workers need anew certificate to be able to continue working.Over 200 people have completed short-coursetraining over an 18-month period.

The Greenwich agency has easy access to funding(see Example 20, p 16) and can allocate thisquickly. It provides training for unemployedpeople (but they do not have to be long-termunemployed) and people employed by localfirms. Firms have to pay 30% of the cost oftraining their employees.

Training

34


Good practice

• Recognise that recruitment is likely to be aninitial and an ongoing problem: it will needearly planning and continuing effort

• Identify the training needs of the target group(for the LLiC initiative) early: it will take timeto identify suitable training

• Draw up a training specification and berigorous in checking the ability of the localtraining providers to meet this

• Obtain control of the training money or getthe support of key funders, so that thecontract with training providers can beproperly enforced

• Training supervisors need to be qualifiedtradespeople, committed to working with thetarget participants, trained as trainers andassessors (for NVQ), self-confident and patient

Example 37: Portsmouth and South East Hampshire adult training programme

Activity Tasks The LLiC team’s role Duration

Recruitment • Outreach • Organising outreach events• Publicity • Producing leaflets• Initial interview by Job Centre or • Links with ES

New Deal advisor• Referral

Assessment • Assessment by the training provider • Provide induction talk and help 1 week• Previous site work and a geniune with assessment

commitment are key requirements

Pre-site • Health and safety training and progress • Contract with college 16 weekstraining through an individual training • Have a presence in college

programme in a workshop environment • Monitor attendance and progress• Elements of NVQ 2 achieved • Sort out problems

Site • Employment on site with a wages subsidy • Identify employers and 26 weeksemployment • Day release at training provider to negotiate subsidy agreements

continue NVQ 2 • Monitor

Ongoing • 40% stay with their placement employer • Help with job-searchemployment • Others seek work through LLiC register • Market a skills register

(with ES staff)

• To ease the problems of timing the move tosite, ensure that there is flexibility on the dateparticipants must leave the training centre,and develop relationships with a wide rangeof employers and sites

• To ease problems of low initial productivityof trainees provide funding (such as a wagessubsidy) to the employing contractor

• To maximise the retention rate (of thetrainees) in both training and employment itis vital to provide welfare, mentoring, progressmonitoring and problem-solving support

• Try to establish a commitment to ongoingtraining in both trainees and employers

• Do not overlook the opportunities for short-course training

35

Purchasing and business developmentinitiatives

In a number of areas a high priority has beengiven to securing contracts from largedevelopments for local firms. There are a numberof rationales for this:

• increased workloads will increase employmentfor local people;

• developing a strong relationship with localfirms (by providing them with services) makesit easier to encourage the recruitment oftrainees, including the long-term unemployed;

• the initiative is organised by a business orbusiness development agencies.

The Hull Local Purchasing Initiative aims to helplocal, regional and national developers and

Local business initiatives

6

Example 38: Hull Local Purchasing Initiative (HLPI) – services to members

Directory Inclusion in the HLPI directory which is updated annually and distributed to all membersplus 110 of the largest ‘potential purchasers’ in the area

Local recruitment Membership of Hull Local Labour Initiative offering a recruitment service and a wagessubsidy for recruiting local unemployed people

Procedures Assistance with contractual and employment legislation, and health and safety procedures

Training Organising training and accreditation in business, management, safety and technicalskills, either through group courses or by identifying suitable training organisations:members typically get a 33% contribution to course costs

Business consultancy Business health checks and support on specific issues: this is either provided by HLPIstaff or through a grant towards external consultancy (typically 50%)

Market information A weekly listing of potential contracts obtained through information from planningauthorities (within a 60-mile radius) and the Official Journal of the European Communities.

Promotion Approaching major developers and outside contractors to promote the directory andthe local labour initiative

Financial guidance Help with VAT, payment problems, credit ratings and tax issues

Benchmarking Operating a ‘considerate builder scheme’

Newsletter Regular issues in which members can include items about their innovations orachievements

Events The construction exhibition: a two-day programme of seminars on current issues, and achance to meet other local companies

36


construction companies to work with locally-based sub-contractors and suppliers, and a localworkforce. The initiative currently has 430member companies which pay an annualsubscription based on the number of employees:most members employ between two and 15people, and pay either £100 or £150 per year.

The Hull scheme shares a project director andfinance team with the Hull Local labour Initiative,producing a comprehensive approach to LLiC. Itseeks to maximise the volume of localconstruction work that is undertaken by localcompanies (professional, engineers, contractors,sub-contractors, component manufacturers,general merchants and training providers), andmaximise the number of local people that fillvacancies in these providers.

Greenwich Local Labour and Business providesbusiness development support for localcompanies. This involves a business diagnosis,business advice, and training for management andoperatives. The business development work issub-contracted to a business development agencythat can offer a wide range of advisors who havean Institute of Business Advice qualification. Theagency has over 400 local companies on itsdatabase and, when contracting opportunities areidentified via the developer’s section 106 planning

obligations (see Example 17), business advisorsidentify suitable companies, contact them to see ifthey are interested in the work and put forwardthe selected local firms for consideration by thedeveloper or main contractor.

In its second phase of development in LondonDocklands (starting in the mid-1990s) CanaryWharf Group Plc committed itself to ensuring thatlocal people and firms had opportunities forobtaining work in the construction or end-use ofthe development. This decision reflected acorporate commitment and a willingness torespond to the concerns of the local authority(Tower Hamlets). To implement the commitmentthe company appointed a local business liaisonmanager who developed a database of localbusinesses. Using business and telephonedirectories, local firms were identified andinterviewed to obtain information for a one- ortwo-page company profile. This is used toidentify suitable firms for tendering opportunities.The database currently includes 350 construction-sector companies, including contractors,professional firms and specialist suppliers. Mostof these are based within Tower Hamlets or thesurrounding boroughs, although the list includessome non-local firms that have a significant localworkforce (for example, from previous localcontracts).

Example 39: Greenwich Local Labour and Business (GLLaB) – list of services

GLLaB’s services to employers,GLLaB’s services to local residents GLLaB’s services to local businesses developers and main contractors

• Recruitment service: matching • Free recruitment service, • Access to local contractorspeople to local job opportunities matching skilled workers to and suppliers

business requirements

• Advice, guidance and skills • Advice and information on • Access to a skilled localassessment contracting and tendering workforce, backed up with

opportunities customised training

• Arranging and funding training • Referral of companies todevelopers and main contractors • Free recruitment service

• Preparation for interviews • Business support to help localcompanies win contracts andmeet quality standards

• Arranging training for new andexisting employees

Source: GLLB (nd)

37

Example 40: Local business databaseinformation – Canary Wharf

• Contact information

• Company history

• Main work and specialisms

• Size and makeup of workforce, and numberof local employees

• Turnover

• Insurance cover, health and safety policies

• ISO 9002 and other quality standards

• History of work in Canary Wharf

• Recent contracts: date, project, client, status,value

As a Canary Wharf employee the business liaisonmanager has privileged access to the projectdevelopment staff. This has been critical ingetting early information about tendering andother business opportunities. Over time themanager has developed good relationships withkey staff and developed the necessary skills toidentify suitable local firms to put forward forconsideration in the tendering process. Bydeveloping relationships with a wide range ofcompanies tendering for work (many not local),the manager is now approached to identify localsuppliers.

In just under three years of operation the businessliaison manager has been able to trace £133.5million in contracts going to local firms due to anintervention by the project. This represents a totalof 221 packages of work, of which 90% were forsums of under £1 million. Other referrals willhave produced local contracts which are difficultto track. The operation is now part of a widerlocal labour initiative (the Partnership) and worksclosely with the Tower Hamlets LLiC team whichprovides the construction job-matching andmonitoring services.

Example 41: Canary Wharf – the process of targeting work at local firms

Stage Activity

Identification Building relationships with project managers in the developer companies to get earlywarning of new projects

Planning Obtaining the tender events schedule (the timetable) for each development and identifyingthe critical dates for tendering each tradeDiscuss opportunities with the project manager

Tender list Identify suitable firms (trade and experience, size and financial capacity, existing workload);discuss the tender with the firm; present a company profile of suitable firms to the projectmanager (who then does further research and decides which firms to obtain pre-qualification information from, and which to invite to tender)

Tender stage Contact each tendering firm to offer information about potential local suppliers and sub-contractors

Appointment Contact the successful firm to offer ongoing support on local suppliers and local labourinformation

Monitoring Obtaining information from the project manager on which firms they considered using,which local firms obtained contracts and their value

Local business initiatives

38


Good practice

• A small business initiative (in construction) isan important element in an LLiC schemebecause it helps to develop a strongrelationship with local firms who will providelong-term employment

• To maximise the local business opportunitiesit is important to work closely with the maindevelopers (to gain early information aboutcontract opportunities), and gain their respectfor the quality of the firms put forward

• Provide capacity building, businessmanagement and staff training for the localfirms

• Integrate the small firms’ work with the new-entrant training and job-placement activities

39

In many neighbourhoods with high levels ofunemployment and deprivation one of the largestexpenditures is on housing maintenance carriedout for the local authority and/or housingassociations. Since these dwellings are wheremany of the socially excluded live, the sociallandlords may be keen to link their maintenancespending to local employment initiatives.

The nature of maintenance work will conditionthe scale and focus of any LLiC involvement. Keyissues are:

• Much of the expenditure is in electrical andheating work that must be carried out byqualified engineers.

• Most tasks are carried out by single operatives:at best one apprentice could be placed withthem.

• In recent years there has been increased use oflow-maintenance materials which has reducedroutine maintenance such as painting anddecorating.

• External maintenance work tends to be cyclicaland does not provide permanent employment.

• Work in occupied homes may be consideredunsuitable for employees with a criminalrecord.

• Refurbishment work tends to be repetitive andlimited in scope, and may not provide anadequate range of experience for a trainee.

Nevertheless, there are a number of interestingexamples that can be considered.

Local authority housing

In many local authority areas maintenance work iscontracted to a council-owned direct labourorganisation. These have traditionally hadapprenticeship programmes, although recruitmentwas targeted at the best of the applicants ratherthan at a disadvantaged group.

In Newcastle-upon-Tyne, Cityworks typically has40 apprentices (although at present it has 63) in aconstruction workforce of between 520 and 620people. The number and distribution ofapprentices across trades is based on projectedworkflows and anticipated vacancies due toretirement. Apprentice recruitment is fromNewcastle residents who pass the CITB aptitudetest, although there are access routes for peoplewho are enthusiastic but fail the test – they can goon other three-year training schemes (see below)and transfer into an apprenticeship later.

The apprenticeships last for 3-4½ years(depending on the trade). A CITB indenture isused and the participants have employed status.In the first year they are paid a reduced rate of£42 per week: after this they are paid at localauthority rates. The arrangements are supportedby trades’ unions who wish to see a continuationof good quality training. The trainees attend dayrelease training and are expected to achieve NVQLevel 3 before the end of their apprenticeship.Apprentices get their work experience withtradespeople. Since much of the work is housingmaintenance a 1:1 ratio is common. The tradeoperatives are paid an additional weekly sum for

LLiC on maintenance work

7

40


supervising the apprentice. It is left to theirdiscretion whether they share productivitybonuses.

The progress of the trainee is monitored throughquarterly reviews: one with the apprentice and atraining support worker, and another with theapprentice and the supervisor. Trainees are notplaced with trade operatives who are reluctant toprovide support, or who merely exploit them.About 90% of apprentices are subsequentlyemployed by Cityworks.

Cityworks receives youth training funds fromTyneside TEC to support the programme.

The City Council ... has long beenconvinced that the lack of employmentand training opportunities for youngpeople leads to alienation, crime,vandalism and also contributes to thebreakdown of social cohesion. (City ofNewcastle)

Since 1995 Cityworks has also managed a range ofother youth training programmes. These havebeen targeted at 16- to 24-year-olds, with a bias

towards younger people. Recruitment is targetedat unemployed young people from urbanregeneration areas of the city. The schemes arefunded from external sources, typically SRB andTyneside TEC. European Social Fund funding isnot used, but New Deal funding is used where theemployee is eligible. Most schemes are based onthe following principles:

• Targeted recruitment (not selecting the bestqualified candidates)

• Three-year temporary employment contract(with no guarantee of ongoing employment)

• Graduated wages: £42 in year one, £82 in yeartwo and £106 in year three

• Work placement in a wide range ofoccupations within Cityworks

• Provision of literacy, numeracy and job-searchskills

• The opportunity to pursue NVQs

Thanks to intensive social and welfare support(see pp 31-3) the retention rate in the programmeis between 80% and 90%. Of those completing,about 65% progress to permanent employment:others go on to full-time education or training.However, one problem with the commitment to a

Example 42: Newcastle Cityworks training programmes in construction*

Number ofScheme Duration trainees Activities

Apprentices 3-4½ years 63 Indentured trade apprentices

Youth employment and training 3 years 90 Participants work with Cityworks teams includingconstruction, landscape, gas servicing, estimatingIntake – 30 per year

Community Action Training Initiative 3 years 12 Provides gardening and decorating services forelderly and infirm residents in social housingin SRB areas

Women in Construction 1 year 14 Provides pre-recruitment training for women inconstruction skills, with work experience inCityworks

Bridge to Work 1 year 18 Provides one year’s employment in Cityworks forolder unemployed people with previousconstruction experience and/or training

Total 134

* Cityworks also provides training in childcare, administration and a New Deal Environment Task Force Programme

41

three-year programme is that the cost per job ishigh relative to one-year programmes.

In the London Borough of Tower Hamlets theCouncil has just let four maintenance contractsthat include a request that the contractor “... usetheir best endeavours to ensure that at least 20%of the construction and related works should beundertaken by local residents”. The LLiC Team isexpecting to work with the contractors to ensurethat these targets are achieved, but it is too earlyto report on progress.

In Portsmouth, contractors undertakingmaintenance work for the council were asked tosign the LLiC scheme’s Code of Practice, and areregularly asked to provide jobs for adult traineescoming out of the training centre (see Example30, p 28).

Housing association maintenancecontracts

Although many housing associations have beeninvolved in LLiC initiatives on new-buildprogrammes, there are relatively few examples onmaintenance work. One of the reasons for this isthat, with the exception of associations that havetaken over the entire stock of local authorityhousing in an area, housing association propertiestend to be smaller in number and more widelydispersed. This means that the generalmaintenance work supports relatively few jobs,and the association’s contract may be only a smallpart of the total workload of larger contractors.

However, in Glasgow there have been twoinitiatives that focused on persuading thecontractors to take on local apprentices.

Queens Cross Housing Association manages 3,000housing units in the Maryhill area of north-westGlasgow. They have a history of local economicdevelopment and, after a poor experience oftrying to get contractors on new-buildprogrammes to recruit local people, they lookedat the potential of using their £1 million-per-yearmaintenance expenditure for this purpose. Initialfeasibility work identified two problems:

• a lack of training management experiencewithin the small contractors they used;

• it was inappropriate to ask contractors to makea four-year commitment to an apprentice aspart of a one-year maintenance contract.

In response the association decided to offer four-year maintenance contracts which included acontractual requirement that each trade contractorrecruit and retain at least one youth apprentice.The first four-year contract covered 1995-99 andresulted in a total of 15 apprenticeships in 12companies. The second set of contracts haveproduced another 15 apprenticeships.

Apprentices are registered with the CITB and arepaid normal trade rates. In the first scheme,Queens Cross provided a wages subsidy: 100% inyear one, 80% in year two, 75% in year three, 50%in year four. This was funded from a City CouncilUrban Programme Grant. In the second set ofcontracts no funding is offered but the contractorshave agreed to participate, in part because theyhave been able to expand and in part becausethey have established the necessary administrativeand supervision arrangements. It appears that thecontractors can obtain other training grants (forexample, from the industry levy) to support theirtraining activity, provided that the grants do notcontribute to trainee wages (which would beconsidered double-funding).

Reidvale Housing Association utilises a team ofself-employed tradespeople to undertake itsmaintenance work: a plumber, an electrician,three joiners and a landscape contractor. Each isemployed on an annual (renewable) contractwhich guarantees them 35 hours per week. Theyhave to provide equipment, but materials arepurchased through a housing association account.The association is prepared to pay a higher hourlyrate (an extra £4 per hour) if the contractorengages an apprentice, and agrees to employthem for the duration of the apprenticeship. Thecontractor needs to meet all the employment andtraining costs of the apprentice. The contractstates that preference should be given to localyoung people, but as no labour-supply support isprovided recruitment is left to the contractor.

The scheme has been operating for many years,with approximately four trainees in post at anypoint in time. These are typically retained forthree or four years. At present five contractorshave taken on an apprentice, and the annual costto the association is £36,400.


42


Establishing a small contractor

Two housing associations have helped establish asmall contracting firm to undertake some of theirmaintenance. The most substantial of these isThorpete Associates Ltd, which is a subsidiary ofLeicester Housing Service Ltd – a charity linked toLeicester Housing Association. The motivation forthis initiative was the delivery of a quality gas-servicing operation at a time when the mainservice supplier (British Gas) was increasing itsprices and new legislation required all gasappliances to be re-certificated with each changeof tenancy. The example is relevant because itcould be used to provide local employment andtraining opportunities, and because approximately60% of the profits are gift-aided back to the charitywhere they could be used to support training.

Thorpete Associates Ltd started with therecruitment of experienced British Gas staff whowere being offered redundancy. Initially, 80% ofits work was for Leicester Housing Associationthat entered into a three-year negotiated gasservice contract at below market rates: after fouryears the growth of other business has reducedthis to 35%. The company now services 14,000homes in an area stretching from Chesterfield toNorthampton, and east for about 40 miles fromthe M1 motorway. The staff of the company hasgrown from seven to 26; many of these work fromhome, covering a local ‘patch’. The paperworkinvolved in handling approximately 1,500 jobs perweek means that 25% of the staff are clerical. Thecompany has taken on two apprentices, but facesdifficulties with training because of the lack ofsuitable training courses. It is anticipated thatmore Leicester-based apprentices will berecruited.

B-TRAC is a not-for-profit company set up by thetenants’ and residents’ committee of Black CountryHousing Association in 1996. It is based in Blackheathin the south-west of Birmingham and aims toprovide training and employment opportunities(in maintenance) for tenants of the association(and their families), in an area in which surveysshowed that 85% of tenants were not employed.

B-TRAC has always had to compete competitivelyfor its work, although initially it was able toobtain work with a price equivalent to that paid toother contractors. It is paid at an agreed labourrate per hour, plus materials and a handlingcharge. It currently has contracts with threehousing associations but it is not yet producingthe levels of income needed to pay adequatewages to all of its staff. Key reasons for this are:

• it is competing with sole-traders and smallcompanies that do not support the office andtraining overheads of B-TRAC;

• it does not have management with theexperience to compete for additional businessand lead the expansion of the enterprise.

The company feels that it is operating on themargins of viability and has not been able toexpand the employment and trainingopportunities to the extent to which it hoped.

There have also been problems in recruitingsuitably skilled workers from the ‘target’ tenants –of the current workforce, four are from this groupand four are tenants of other client associations.The workforce includes two CITB indenturedapprentices (in carpentry and joinery), a thirdtrainee (in gardening) is placed with the companyby a training scheme.

Example 43: Services delivered by B-TRAC

Activity Description Employees

Property maintenance Undertaking routine, urgent and emergency property Three operativesrepairs for three housing associations Two apprentices

Gardening Work on 23 sites throughout the year One operativeOne trainee

Cleaning* Communal cleaning at one site One part-time cleaner

* Excludes window cleaning which is sub-contracted

43

Internal contracting

In Hastings, 1066 Housing Association (whichtook over 4,500 local authority properties) hasrecently established Green Machine – a groundsmaintenance team employed directly by theassociation. This is the third 1066 initiative thataims to employ their tenants: other projectsinclude part-time tenant care-takers and a part-time decorating team.

Green Machine provides about 65% of theassociation’s grounds maintenance work, anddoes daily inspections of its 38 play areas. It wasdeveloped by two temporary staff:

• The grounds maintenance coordinatordeveloped the client side of the activity: dis-aggregating the work in the existingspecification (prior to re-tendering) anddeveloping Green Watch, a network of tenantswho help monitor standards in their area

• The Green Machine coordinator developed thegroundwork team, organised training and workin two pilot areas, and prepared the tender forfuture work.

When the three-year grounds maintenancecontract was re-tendered it was split into basicwork and specialist work requiring large machinesand/or specialist skills. Green Machine tenderedfor the basic work. Their price was close to thelowest commercial tender, but since VAT at 17.5%would be added to the latter, the in-house tenderwas 15% cheaper overall. (Unlike a localauthority, a housing association cannot reclaimthe VAT it pays out, but, as an in-house team,Green Machine would not need to charge VAT.)

Example 43: 1066 grounds maintenancecontract

• Mow the grass 10 times per year

• Dig and weed beds once per month

• Prune shrubs and plants when necessary

• Edge up borders when necessary

• Cut hedges twice per year

• Litter-pick hedge bases once per month

Green Machine employs five operatives (allunemployed tenants) plus a coordinator. Theyhave full-time employment contracts (with 1066),working 37 hours per week. This is in contrast tomany groundwork contractors who use variablecontracts and casual staff to cope with seasonalvariations in the workload. Green Machine copeswith the variations by careful planning and, withthe client’s permission, the omission of workwhen it is not essential. It was intended that thestaff would attend training at a local agriculturalcollege, and achieve an NVQ Level 2. However,the trainees found the training unsuitable for thetype of work they were doing and preferred short-course training.

When Green Machine took over the groundsmaintenance contract there were problems arisingfrom:

• a backlog of work left by the previouscontractor;

• their inexperience in managing the largevolume of work;

• insufficient equipment;• bad weather;• a requirement to take on extra housing

association work.

However, after several months the problems wereovercome and tenant satisfaction ratingsimproved. In retrospect a more tapered transitionfrom the previous contractor would have beenhelpful.

1066 have so far targeted their recruitment attenants, for example, by advertising posts throughthe tenants’ newsletter and through residents’association meetings. However, there have beenconcerns about how this targeting fits with theassociation’s current recruitment policies whichfavour open advertisements which could attractnon-tenants.


44


Good practice

• Identify the potential workload and design ascheme that is suitable for it (for example, ayouth apprenticeship programme)

• Adopt an approach to contracting thatmaximises influence with the contractors, andprovides sufficient continuity for them tocommit themselves to a training programme

• Specify the training and local labourrequirements in the tenders so that allapplicants compete on equal terms

• Seek additional funding to cover training-related costs, at least in the initial years whenthe training infrastructure may need to bedeveloped by the contractor

• If VAT charges cannot be recovered, considerthe benefits of doing work in-house

45

Organising LLiC

The construction industry is complex. It involvesa number of stages, a range of professions andorganisations, and a degree of uncertainty and riskthat is not present in many other industries. AnLLiC initiative can complicate the process and therelationships involved, and add to the uncertaintyand risk. Because of this, it is important to havean approach that is well considered, and to havestaff and resources that are dedicated toorganising and monitoring implementation.

The organisation and staffing of an LLiC initiativewill vary with the scale of the scheme, the rangeof activities it is supporting, the availability offunding and whether there are existingorganisations that want to be included.

Example 44 shows that there is a wide variety oflocal arrangements for the promotion and deliveryof LLiC. However, from these arrangements wecan identify a number of common patterns:

• Most schemes have one or more peoplededicated to promotion and/or implementationand monitoring

• There is usually involvement from the ‘client’for the construction work: it is important tohave the ‘leverage’ of the purchaser (and theirdevelopment staff) behind the project

• Delivery is organised through a partnership ofagencies that can contribute their expertiseand/or resources: typically, this includes thelocal authority, the Employment Service andthe local TEC

• It is not unusual for recruitment andassessment activities to be done by one ormore community-based agencies, sometimesincluding local Jobcentres

• Some projects have used consultants tomanage some or all of the delivery, othersdeliver with in-house teams.

There is some experience which suggests that it iseasier to maintain quality control in a scheme if allaspects are managed through a singleorganisation. For example, in both Bristol andCardiff Bay it was considered important that eachperson being put forward for employment hadbeen interviewed and assessed by theconstruction personnel who were operating thejob-matching service. In contrast, Liverpool’sEmployment Links relies to a greater extent onnon-specialist staff in a number of localemployment agencies to assess people’s skills andexperience. The contractors are expected to takefull responsibility for assessing their recruits. Inboth the Portsmouth and the Carey build and trainprojects a key element is that the LLiC schemecontrols the training budget and contracts with acollege to deliver to an agreed specification. Ifthis specification is not met the funding can bewithheld. This has been critical in ensuring thatthe colleges change their operations to suit theadult training scheme.

Organisation and funding

8

46


Example 44: LLiC organisations

Area Organisational approach

On Site Bristol A partnership between the City Council, TEC and Employment Service (ES)(with support from the CITB, Chamber of Commerce and English Partnerships)Includes an ES secondee

Tower Hamlets LLiC team A team within the Council housing departmentIt also provides services to other LLiC agencies, such as the Partnership inCanary Wharf

Liverpool Employment Links A partnership between the City Council, TEC and ESIt promotes LLiC to developers and provides job-matching and monitoringservices

Lewisham Organised by staff in the Council’s economic development departmentDelivery is contracted through the regeneration department

Cardiff Bay The Development Corporation promotes to developersDelivery support is provided through a consortium of local employmentand training agenciesThe ES provide job-matching services

Nottingham City Wide Construction is part of the training and employment work of theCouncil’s development departmentIt has two ES secondeesNECTA is a social enterprise, with community membership

Braehead Outputs are achieved through an on-site recruitment centre, which is run bya partnership of councils, colleges, development agencies, training andrecruitment agencies (including ES), and the private sector

Stirling Operated through the City Council, working with the ES

Waltham Forest HAT Operated by the development team and construction manager (Bovis)Job-matching provided by in-house community-based employment agencies

Penwith Housing Association Carey Consultants are contracted to organise and deliver the schemeThe association employs the trainees

Speke Garston The development company employs a part-time consultant to promote andoversee LliCThe Speke Garston jobs and training centre are responsible for recruitment

Hull Two teams offering local business support and LLiC, are managed by a singledirector

1066 Housing Association In-house operation, but with separate people acting as client and servicedelivery manager

Portsmouth LLiC team A partnership between Hampshire TEC, the ES and four local authorities

Portsmouth Housing Association The activity is undertaken in-house by staff in the new business developmentdepartment

Newcastle Run by the Council’s Cityworks on its contracts

Manchester Promoted by a partnership of the City Council and key developers,Manchester TEC and the ESContract implementation is organised by each developerTraining is organised by the TEC

47

Staffing

The number of dedicated staff and their functionswill depend on the scale and focus of the LLiCactivity, but also on the problems facing the targetbeneficiaries. As the earlier chapters haveillustrated, there are some projects achievingexcellent results with limited staff inputs (forexample, the 30 apprenticeships achieved byQueens Cross Housing Association, or the £137million in contracts for local firms achieved by theCanary Wharf project). Both of these had nomore than one full-time equivalent workerdedicated to the scheme. However, neitherscheme was trying to place long-termunemployed people into training and work.Where this is the priority (for example, inNottingham, Lewisham, Portsmouth and Penwith)much greater staff input is needed and, becausesupport and management needs to be ongoing,the staffing needs will increase with the numberof trainees in the scheme.

Because of this variation in aims and localcircumstances it is difficult to be prescriptiveabout staffing numbers.

Staff skills also need to take account of the aimsof the scheme. Key considerations are:

• Staff with recognised construction skills andexperience will be treated with more respectby construction professionals and site staff

• If the focus is training it is important to havestaff who are accredited as trainers and NVQassessors, and have a construction trainingbackground

• Schemes targeting long-term unemployedpeople need to provide social welfare supportand advice (including advice on benefits)

• All schemes need good database systems andoperations for monitoring outcomes andaccounting for the use of funding

However, one danger in appointing staff with aclose association with the industry (or perhapswith established training practices) is that theymay give too high a priority to the values andpractices of their colleagues in the industry, andnot give sufficient priority to challenging andchanging these so that the needs of the targetbeneficiaries can be met.

As the case studies show, some schemes meet

their staff and skills needs by obtaining fundingand employing dedicated workers within a singleorganisation. Others employ some staff andobtain secondees (for example from theEmployment Service) to provide other skills.Others obtain the skills by networking: some skillsare in-house, but other skills are obtained byusing ‘complementary’ services provided by otherorganisations.

Funding

The case studies have revealed a wide variation inthe scale and source of funding for LLiC. In manyprojects the costs are shared among a number ofagencies, and are not easily identified. Forexample, the Liverpool City Council scheme isserviced as part of the work of officers managingthe select tender list and individual councildevelopments, while the labour supply andmonitoring activities are handled through a rangeof multi-functional agencies supported by the CityCouncil, Merseyside TEC, the Employment Serviceand various Single Regeneration Budget (SRB)programmes.

The scale of the local provision is heavilyinfluenced by the availability of funding: schemescan only expand to tackle a wider range of needsif funding sources can be identified (althoughsome simple low-budget schemes have been veryeffective). This is especially true of adult trainingand placement schemes where the training andsupport costs are high. However, the availabilityof funding will, to some extent, reflect the prioritygiven to LLiC. Both the Lewisham andPortsmouth schemes are based on substantialfunding streams written into SRB programmes; inLewisham the budget is approximately £1 millionper year.

Where private companies have promoted aninitiative there is rarely any funding madeavailable (although they may provide sitefacilities) unless, as in Greenwich, there was asection 106 Planning Agreement that obtainedfunding for training and employment. Animportant characteristic of this funding is that itcan be used very flexibly.

Elsewhere there are schemes that have askedcontractors to price the LLiC element, and theadditional cost can be identified. In the Landportscheme in Portsmouth (see Appendix B) the

Organisation and funding

48


tendered sum for training and employing 12unemployed adults and achieving 50% locallabour was £54,000, which representedapproximately 1.6% of the contract price. Thetotal cost, including training, professional fees andadministration was calculated as £127,000.

Good practice

• It is vital that staff time be dedicated topromoting and implementing the LLiCscheme: the scale of the staffing and financialrequirements will be determined by the scaleand focus of the LLiC scheme

• The funding available will reflect the prioritybeing given to LLiC, and will partly determinewhat is achievable

• When a high priority is being given to tacklinglong-term adult unemployment it is importantto develop a strong dedicated team and asignificant budget

• Where possible, the LLiC project should be ableto control the budget so that it can ensure aquality service (for example, from trainingproviders)

• Projects which include staff withqualifications and site experience inconstruction will command more respect withdevelopers and contractors, and will be ableto ensure a better quality service

• Early attention must be given to monitoringand financial records since this is critical tosecuring funding

Example 45: Potential funding sources for LLiC

Project Main sources of funding

Lewisham Community Refurbishment Scheme SRB and Estate Action

Penwith Housing Association SRB and European Social Fund

NECTA in Nottingham New Deal, European IGLOO Transnational Project, paymentfor work done

Canary Wharf Ltd Funded by the development company

Newcastle Cityworks Newcastle TEC and SRB, plus City Council and Cityworks

Reidvale Housing Association The association’s maintenance budget

Tower Hamlets LLiC team The Council’s housing budget

Portsmouth Landport Estate Scheme SRB, Hampshire TEC, The Housing Corporation InnovationGrant, and the development budget

Greenwich Local Labour and Business Section 106 Planning Agreements, European ‘Adapt’ Fund(for small businesses)

49

Measuring LLiC outputs

LLiC schemes involve the allocation of additionalresources (to achieve benefits for a targetcommunity), so it is important to set targets forwhat is expected and to measure the outcomesagainst these targets. However, since constructionsites are temporary and much constructionemployment is short-term, it is also important toconsider how best to measure the impact of anLLiC initiative.

Example 45: Bute Town Link Road (CardiffBay) LLiC outputs

Number of vacancies offered to site office 297Total number of vacancies filled 289Number of inner-city residents placed 154Number of disabled people placed 19Number of ethnic minority placings 66Number of residents of CBDC area placed 76Number of trainees placed 27

Source: Cardiff Bay Training and Employment Group

Schemes with a strong involvement from theEmployment Service tend to measure the numberof people who are placed in a job. For example,in Cardiff Bay, the Employment Service monitorsthe employment outcomes through a follow-upphone call to see whether people sent to sitewere offered a job. However, they cannot getinformation on who remains on site and whatproportion of the total workforce the targetworkforce represents. This means that theycannot report on:• The duration of the job: was it just a few days,

or was it ongoing?

• Whether the recruit was from a high-prioritygroup (for example, local unemployed people)

• Employment of local people other thanthrough the job-matching service (for example,apprentices, existing skilled people includingthose already employed by local sub-contractors)

• Whether the LLiC scheme is changing therecruitment patterns: are a higher proportionof the target group being employed?

In Braehead this problem was overcome with thecooperation of the main contractor. As on manylarge developments, the site securityarrangements required each worker to berecorded and given a site pass. The securityrecords were analysed to identify where theworkforce lived. This information was preparedfor the client and, as such, reflects their prioritiesrather than those of the labour supply agencywhich might have asked for more detailed localinformation.

Example 46: Analysis of residence ofBraehead construction workers

Number % ofDistance from site of people workforce

5 miles or less 637 23.36-10 miles 638 23.411-15 miles 298 10.916-20 miles 255 9.321-40 miles 512 18.8Over 40 miles 391 14.3

Total 2,731 100.0

Source: Bovis Construction Site Pass Records

Monitoring and outputs

9

50


In schemes where the LLiC requirements arespecified in the tender or contract it is importantto specify what monitoring information isrequired. This is especially important whenadditional funding is being provided (for example,a wages subsidy for adult trainees). A typicalapproach is outlined in Appendix D. Thisrequires the weekly completion of two forms:

• a weekly site labour record which records thetotal labour on site;

• a local labour register which provides specificinformation about local employees: anyoneliving in the local area who is working on thesite – whoever they are employed by.

This information will allow local labour to bemeasured in person weeks, and by differentcategories. It will also allow the local labourelement to be expressed as a percentage of thetotal labour usage on site, measured in personweeks. This approach was used in the LandportEstate (see Appendix B) where targets were setfor local labour usage as a percentage of alllabour used, for the number of local adult traineesto be employed and the total number of weeksthese adult trainees were to be employed on site.The monitoring information also allowed theemployer’s agent to verify the claims for ‘trainingrelated payments’ made by the contractor.

Example 47: Landport Estate (Portsmouth)LLiC outputs

Actual ActualTarget number* %

Total labour used 1,087Local labour† 50% 580 53Adult trainees 12 12Trainee time on site* 192 135

* In person-weeks; † Portsmouth postal codes andCity Council tenants living in other areas

It is important to be able to verify that LLiCmonitoring information is not being falsified. Ifsite security data is being used it is important thatthis gives both the home address and any localaddress. In other situations it can be made arequirement that the contractor retainsdocumentary evidence confirming the homeaddress of each worker they regard as local (for

example, a driving licence, the address part of abill or bank statement). Alternatively, the LLiCworker or employer’s agent can ask to talk to thelocal person. If a local job-matching register ortraining scheme is involved it should be possibleto verify most local workers through this.

Benchmarks

This report has not sought to evaluate differentapproaches. Such an exercise would becomplicated – even where LLiC schemes looksimilar they can have a different size of catchmentarea and a different population profile. However,it will be useful to indicate some benchmarks thatappear achievable by different approaches, whenthey are applied with some rigour.

In city-wide schemes which seek to maximise thenumber of local people employed on site(including skilled workers and trainees, newemployees and existing employees who livelocally) it appears that a target of 50% local labouris achievable (Portsmouth, Liverpool). In similarschemes which focus on a single estate, orperhaps a borough, a target of 25% local labour isachievable (Waltham Forest HAT, GreenwichLocal Labour and Business).

In job-matching schemes where the measure isthe number of job-placements achieved it appearsthat roughly 30 placements per week can beachieved with two officers (Cardiff Bay andBristol). Obviously, this depends on a substantialprogramme of construction work and contractorswilling to recruit via the office.

Adult training schemes which provide asubstantial period of pre-site or initial training(perhaps 26 weeks), and supported placement onsite (for perhaps another 26 weeks) achieve 65-75% job outcomes (Lewisham, Nottingham,Portsmouth, Penwith). The recommended ratio ofsocial welfare officers to trainees in schemes thatfocus on the socially excluded is roughly 1:50(Nottingham, Newcastle).

On an intermediate labour market approach theratio of tradespeople to trainees is roughly 1:4(NECTA in Nottingham, Portsmouth HousingAssociation). On contractor-based schemes itshould be possible to accommodate three adulttrainees per £1 million in building cost(Portsmouth).

51

On maintenance work it should be possible toachieve one apprenticeship per contractor foreach four-year period, assuming theapprenticeship lasts four years (Reidvale andQueens Cross Housing Association).

Systemise for results

Most of the LLiC schemes referred to in this reportachieved good outcomes over a sustained period. Toachieve this requires:

• Determination

• A well-designed approach, appropriate for thelocal context

• Establishing systems that ensure a routine andrigorous set of processes

• Good progress-chasing, so that all partiesknow that they have to fulfil theircommitments

• Appropriate monitoring of progress andoutcomes

• Adequate funding and staffing

Monitoring and outputs

52


Advisory Committee for Public Procurement(1989) The Beentjes doctrine: Possibilities andlimits: a discussion document, Brussels:Commission of the European Communities.

Cardiff Bay Training and Employment Group (nodate) The road to local jobs, Cardiff: Cardiff BayTraining and Employment Group.

CITB (Construction Industry Training Board)(1999) Construction employment and trainingforecast 2000-2004, Bircham Newton: CITBResearch Department.

Deane, R. and Morrow, G. (no date) Innovationand good practice key note – 1066 GreenMachine, Hastings: 1066 Housing Association.

GLLaB (Greenwich Local Labour and Business)(no date) Creating local jobs and businessopportunities for the new millennium, London:GLLB.

HM Treasury (1996) An introduction to the ECProcurement Rules, London: HM Treasury.

Manchester City Council (no date) Towards 2000together: Local employment in the constructionindustry: Contract implementation: Proceduresmanual for contractors, Manchester:Manchester City Council.

Macfarlane, R.A. (1998) Local labour inconstruction good practice guide, Ruislip:Warden Housing Association Ltd.

Macfarlane, R.A. (2000) Local jobs from localdevelopment, York: York Publishing Service.

Bibliography

Procurement Policy Team (1998) Procurementpolicy guidelines, London: HM Treasury.

Young Builders Trust (1998) Youthbuilding UK,Alton: Young Builders Trust.

53

Heading Tender requirements

Employer’s objectives ...working with Tenants to develop houses, people and communities.

... to maximise the number of residents in employment.

Employment Statistical information regarding the availability of tenant/resident employees willbe available from a dedicated ... guidance and placement service available at each ofthe HAT estate offices....

In all cases, vacancies must be filled through the estate guidance and placementservice before recourse to other means of recruitment. However, responsibility forthe suitability or otherwise of applicants will remain with the contractor or sub-contractor.

The intention is that a minimum of 20% of the total personnel weeks expended inthe execution of the works will be executed by tenants of the Estate.

Local purchasing WFHAT intends that 20% of all materials and goods purchased shall be through thelocal economy and the contractor will be required to provide a Method Statementof how they will implement this requirement and to clearly and separately identifysuch ... [additional] ... costs if any are incurred.

The contractor will be required to submit a copy of any proposed tender lists to theConstruction Manager for inspection, prior to the tender enquiries being issued.

... prior to the appointment of any supplier or sub-contractor, the contractor shallprovide a report showing (i) the tender sum submitted by each tenderer togetherwith an indication of the preferred tender price, and (ii) the additional amount,shown as a %, between the preferred tender sum and those of local companiesindicated in the tender list.

Appendix A: Waltham ForestHAT: extracts from LLiC tenderclauses (Phase 1)

A

54


Heading Tender requirements

Training of operatives WFHAT are to establish a construction training centre.... Where trainees will beexpected to obtain a recognised qualification. However, neither WFHAT or theConstruction Manager will guarantee the availability of candidates for training andsubsequent employment....

The trainees, on completion of their training at the centre, will be offered workplacements with the contractor (or their sub-contractors) at a cost to the contractorof £50 per trainee week for a period of 12 weeks. During this period the trainees willundertake a recognised programme of training.... The scheme will initially be offeringcarpentry and joinery, bricklaying and general construction operative training. Thiswill be reviewed ... to reflect the contractor‘s trade requirements at any particulartime.

On completion of their training and work placement periods the contractor and/orany sub-contractors will be obliged to assess the operatives’ capabilities and experiencefor the purpose of offering employment ... at wage rates comparable to 95% of theWorking Rule Agreement rates for a further 12 weeks. The operatives are then to beconsidered for full-time employment ... until such time as the work element ... [trade]... is completed.

The number of operatives from the training programme employed by the contractoror sub-contractors should be ... a minimum of 10% of the total person-weeksexpended on the works. This is in addition to the 20% use of local labour.

The management of the site-based training programme ... will be the responsibilityof the contractor.

Costs and disruption The contractor’s tender, via the Method Statement requested in clause A30/505,shall allow for all costs associated with the employment of trainee labour at this siteand their agreement to this undertaking will be incorporated into the Contractdocuments.

The contractor will be responsible for ensuring that all works executed by traineesreaches the specified standards and for the re-instatement or replacement as requiredof all defective work and/or materials.

General obligation The trainees are to receive the same protection and benefits under the legislationregarding health and safety at work and insurances etc together with the conditionsof the appropriate Working Rule Agreements etc as applies to other workers on site.

The acceptance of these terms and conditions as part of the main contract, will notin any way prejudice or affect the Employer’s rights as stated in the contractconditions, nor shall they form the basis for any claims for additional costs or charges.

The contractor shall offer to the Employer’s training supervisor a right of access tothe trainees at all times.

Labour record Provide each week for verification by the Employer’s Agent a record showing thenumber and description of the ... persons employed on or in connection with theWorks on each day of that week, including those employed by sub-contractors. Thecontractor shall be required to maintain a register showing the names of all employees,their address and the positions in which they are employed. Statistical informationwill also be provided which will show the number of persons employed plusinformation on their gender, ethnic origin and/or disabilities. Details ... [of the above]... will be presented as a monthly return or at such other intervals as the Employermay require, for the duration of the contract.

55

Employer’s Requirements – locallabour in construction

The Contractor is required to comply with theLLiC requirements as detailed within Addendum Fof these Employer’s Requirements. All costsincurred by the Contractor in complying with thisprovision are deemed to be included within theContract sum and identified separately on theTender Sum Analysis.

It is the Contractor’s responsibility to obtain thecooperation and compliance of sub-contractorsand/or take whatever other actions are necessaryto achieve the local labour targets and othermatters as set out in the LLiC Employer’sRequirements.

A briefing meeting with the LLiC SchemeCoordinator has been scheduled for 8 January1997, to ensure that the full implications of theLLiC requirements are understood. The Contractorshould arrange a suitable time on that day withthe Employer’s Agent: the briefing will take aboutone hour.

The Employer recognises that the engagement of‘adult improvers’ and ‘youth trainees’ (as definedin the Addendum) may result in higher costs. Tocompensate, in part at least, for such costs aProvisional Sum will be added to the Tender priceto cover ‘training-related payments’. ThisProvisional Sum will be arrived at by theContractor completing the schedule containedwithin the Tender Sum Analysis and will form partof the Tender. Claims for ‘training-relatedpayments’ will only be accepted where theOperating Rules set out in Addendum F havebeen fully complied with.

The LLiC Requirements include:

• 50% of the total labour time required tocomplete the contract is to be provided bylocal residents, of which half should be fromthe core area indicated in the map inAddendum F;

• a minimum of 12 employed-status local adulttrainees must be provided with a total of 240weeks of pre-site training, 192 days of in-service training, and 192 person-weeks ofemployment on site;

• at least two local firms must be included ineach sub-contract or component supplytender/pricing list;

• local means postal code areas PO1 to PO6inclusive for individuals, and Portsmouth,Havant, Gosport and Fareham (LA areas) forfirms;

• a LLiC Method Statement is to be provided andweekly monitoring forms are to be completed.

LLiC costs

The total cost of any claims for the cost offulfilling the Employer’s Requirements for locallabour in construction must not exceed the LLiCProvisional Sum. No claims for costs (direct,indirect of consequential) above the LLiCProvisional sum will be accepted by the Employerin relation to the LLiC Scheme andimplementation arrangements.

Payments from the Provisional Sum will only bemade where:

• the Employer or their Agents are satisfied thatthe Contractor has made due efforts to achievethe targets set; and

Appendix B: Extracts from theLLiC Requirements – LandportEstate, Portsmouth

B

56


• where the Operating Rules for training-relatedpayments have been complied with; and

• where the monitoring forms have been dulyand accurately completed and provided to theEmployer or their Agent.

Training-related payments for each trainee will becalculated on the basis of rates included in theTender Sum Analysis. In estimating the ... [latter]... rates Contractors should take into account ...the wages set out in the Working Rule Agreement... and grants payable by the CITB. The Employeris not prepared to contribute towards the cost oftrainee-status pre-site training.

The agreement of LLiC Targets and a LLiCProvisional Sum does not comprise or imply anypromise on the part of the Employer or their

Agents to provide local labour, local trainees and/or local firms. Any action taken by the Employerto broker relationships between the Contractorand local individuals/firms does not imply andshould not be deemed to imply that the Employeror their agents considers the individuals/firms assuitable for engagement by the Contractor or sub-contractors. Such a judgement remains theresponsibility of the Contractor or sub-contractor.

The Contractor should note that while it is thefirm intention of the Employer to implement theLLiC scheme on this project, various aspects of thescheme are subject to sanction and funding byGovernment agencies. Should either not beforthcoming, then all or some aspects of the LLiCScheme may be omitted.

Source: Currie & Brown, for Warden, Portsmouthand Swathling Housing Associations

Calculation of the LliC Provisional Sum

£

A Allow here for all costs that will be incurred through the organisation and managementof LLiC operations, including recruitment, trainee management, and providing monitoringinformation and all other work set out in Addendum F.

Cost per week £ ...... x ...... person-weeks

B Provide for training-related payments for trainees, allowing for additional managementand supervision, materials wastage, low productivity and (where appropriate) the costof in-service training. To be eligible for a payment the trainee must have employed statusand be paid (as a minimum) in accordance with the working Rule Agreement.

Adult Improvers (weeks 1-6 of employment) 2 carpenters x 6 weeks at £......

2 bricklayers x 6 weeks at £......2 plumbers x 6 weeks at £......(and so on up to 12 trainees)Subtotal A £......

Adult improvers (weeks 7-12) Subtotal A x 75%

Adult Improvers (weeks 13-16) Subtotal A x 40% x 66%*

* adjusted because on four weeks rather than six

C The calculations in B were repeated for other categories of local trainees

D Contingency Sum

E Total

Note: This text is derived from the Richard Macfarlane Model LLiC Scheme, © Richard Macfarlane

57

Appendix C: Liverpool CityCouncil’s Local LabourAgreement

C

Liverpool City Council Construction Charter

Employment and training in City Council Construction Contracts

I/We hereby agree to enter a Partnership with Liverpool City Councilto promote the employment and training of established residents of

the City of Liverpool within City Council construction contracts,through the adoption of the provisions of a Local Labour Agreement.

Name of company…………………………………………….......................................................................................

Address…………………………………………………………...........................................................................................

Signature…………………………...................................... Name………………........................................................

Position…………………………….................................... Date………………...........................................................

Since 1993 Liverpool City Council has invitedcontractors to sign its Construction Charter. Toimplement this, the City Council requires allcontractors submitting a tender for works with avalue exceeding £100,000 to submit a separatesealed envelope containing a signed Local LabourAgreement. This is only dated and enacted withthe successful contractor after the contract hasbeen awarded. It is a separate legal agreement,not a contract condition.

The £100,000 threshold contract value is the pointwhere (under Standing Orders) the contract issupervised centrally within the Council (ratherthan by a Council department). This facilitates theeasy operation of implementation procedures byCouncil’s Contract Supervising Officer.

58


Local Labour Agreement

This Deed made on ……………………………………. (date)

between …………………………………………………..... (company)

whose registered office is at ……………………………...............…………………………………………………………................. (address)

and Liverpool City Council is made between the parties hereto in connection with

…………………………………………………………………….................................................................................................. (name of contract)

I/We agree that if my/our tender is accepted by the City Council I/We will ensure that the project adds value to thelocal economy by maximising employment and training opportunities for established residents of the City ofLiverpool by:

a) Notifying Employment Links (ELS) ... of any vacancies generated by the project, at the same time or in advanceof recruitment from other sources.

b) Working with ELS, to identify specific positive action programmes, in support of equal opportunities, wherethese are applicable.

c) Ensuring that local companies (where suitable companies exist) are represented on subcontract and supplytender lists (Local companies being those located in an area having an “L” postcode prefix).

d) Ensuring that the provisions of this agreement are transmitted to sub-contractors and suppliers involved inthe project, where appropriate.

e) Ensuring that all our employees are suitably trained and where ever possible/viable, employing trainees onappropriately approved courses.

f) Provide reasonable access for representatives of ELS who may from time to time visit our contract works tocheck the labour register and:

i) promote their services to sub-contractors

ii) offer advice on training grants and employment subsidies, where available

iii) provide information on local companies

iv) seek feedback on recruits/trainees.

g) To provide information on labour and sub-contractor utilisation, as specified in the Labour and Sub-contractorMonitoring Procedures, Guidelines for Site Management.

In witness whereof the parties hereto have executed this deed the day and year first before written. Executed asa deed by the Employer herinbefore mentioned namely Liverpool City Council.

...................................................................................................................

Head of Legal Services

and as a deed by the contractor hereinbefore mentioned namely:

...............................................................................................................................................................................................................................................

by fixing hereto its common seal in the OR acting by a director and its secretary/two directorspresence of: whose signatures are here subscribed:

Director ................................................................................................. Director .................................................................................................



Note: This contract is governed by Section 17 of the 1988 Local Government Act

59

Appendix D: LLiC schememonitoring forms

D

Part 1: Daily site labour recordMain contractor .................................................................................................................................................................................................................

Development ...................................................................................... w/c Sunday .........................................................................................

Trade Sun Mon Tue Wed Thu Fri Sat Total

Site staffDirect labourersDaywork labourersCanteenGanger groundworksBricklayersScaffoldersCarpentersRoofersPlumbersGlaziersWindow fixersPaintersElectriciansHeating engineersPlantersCeiling finishersFloor/wall tilersFloor finishersFencersLandscapers

Total on siteCumulative total b/fwdCumulative total c/fwd

Date ........................................................................................................

Signed ................................................................................................... Position .................................................................................................

60


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61

The Skills Register is a user friendly computersystem that matches people to jobs and trainingopportunities based on the skills that theypossess. The matching process is very quick andaccurate. The Skills Register is an essential toolfor organisations who wish to assist disadvantagedjobseekers back to work and to provide aneffective recruitment service to employers.

At the heart of the system is a register of skills.These are recorded by sector in a simplehierarchical structure. Experts from eachoccupational sector have created the skills lists,which are comprehensive and easy to use.Transferable skills are highlighted whereappropriate.

The system produces questionnaires that can beused to record the people and job information,before guiding the user through the data entryprocess in a user friendly manner. The Registersprovide a standard template to describe skills andthis can be applied to both people and jobs.There is no ambiguity and the matching process istherefore very accurate.

The Skills Register provides useful analysis of thelevel of skills that exist within the client targetgroup. When compared to the local jobs market,skills gaps are highlighted, which can be used todevelop training policy. It is also very useful inattracting inward investment as it quantifies themost important asset of any community – theskills of the people.

Appendix E: Hanlon ComputerSystems Skills Register

E

62


The Skills Register includes a powerful reportingmodule that provides analysis of skill levels ofjobseekers and those required in the jobs market,an analysis of positive outcomes, caseloadanalysis and reports for specific purposes.

For further information contact Kevin Hanlon orDavid Hammond at:

Hanlon Computer Systems LtdRodney HouseCastle GateNottingham NG1 7AW

Tel 0115 959 0077Fax 0115 941 7432Email [email protected]

63

These contact details were correct at the time ofgoing to press; however, there is quite a high rateof change in personnel and locations

1066 Housing AssociationRobin Deane1066 Housing AssociationPO Box 1066HastingsEast Sussex TN34 1WY

Tel 01424 781210Fax 01424 781255

Braehead Shopping Centre, GlasgowBob Baldry Carol RossGeneral Manager Braehead RecruitmentBraehead CentreKings Inch Road Braehead ParkGlasgow G51 4BN Kings Inch Road

Glasgow G51 4BN

Tel 0141 885 1441 Tel 0141 885 6007Fax 0141 8854620

Bristol On SiteOn Site BristolBordeaux QuayCannons RoadBristol BS1 5UH


B-TRAC Services LtdPaul BannanB-TRAC Services Ltd1 CausewayBlackheathWest Midlands B65 8AA

Tel 0121 559 0934Fax 0121 559 0040

Canary Wharf PartnershipGaye HarringtonLocal Business Liaison ManagerThe Partnership4th Floor, Jack Dash House2 Lawn House CloseIsle of DogsLondon E14 9YQ

Tel 020 7364 6164Fax 020 7364 6192

Cardiff Bay Development CorporationChris Ashman Liz CourtDTZ Cardiff Bay DevelopmentMarchmount House CorporationDumfries Place Baltic HouseCardiff CF10 3RJ Mount Stuart Square

Cardiff CF1 6DH

Tel 029 2026 2219 Tel 029 2058 5858Fax 029 2048 8924

Appendix F: Contacts

F

64


Carey Consulting Build and TrainSteve CareyCarey ConsultingSuite 2, Bellevue Mansions22 Bellevue RoadClevedonNorth Somerset BS21 7NU

Tel 01275 343589Fax 01275 872192Email [email protected]

Construction Industry Training BoardBircham NewtonKing’s LynnNorfolk PE31 6RH

Tel 01485 577577Fax 01485 578176

Greenwich Local Labour and BusinessRoger RichmondGreenwich Local Labour and Business16 Warren LaneWoolwichLondon SE16 6BR

Tel 020 8316 5731Fax 020 8316 5182

Hanlon Computer Systems LtdKevin Hanlon or David HammondRodney HouseCastle GateNottingham NG1 7AW


Hull Local Labour InitiativeWendy PowellProject ManagerHaworth House202 High StreetHull HU1 1HA

Tel 01482 229986Fax 01482 594200

Hull Local Purchasing InitiativeJune HerreraHull Local Purchasing Initiative34-38 Beverley RoadHull HU13 1YE


Lewisham CommunityRefurbishment Scheme

Mark Brayford Charmaine BrouardCRS Coordinator Lewisham Direct TeamLondon Borough of CRS Craft Training Lewisham CentreCapital House Deptford Strand47 Rushey Green London SE8 3AGLondon SE6 4BA

Tel 020 8314 6398 Tel 020 8692 1999Fax 020 8314 3042 Fax 020 8694 6648

Liverpool Employment LinksGeoff WilliamsEmployment Links17 Seymour StreetLiverpool L3 5PE


Manchester City CouncilAngie LibmanEconomic Initiatives GroupManchester City Council9th Floor, Town Hall ExtensionAlbert SquareManchester M60 2LA


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Newcastle CityworksWill HaughanGeneral ManagerCityworks DirectorateAtkinson HouseCypress AvenueFenhamNewcastle upon Tyne NE4 9JJ

Tel 0191 228 0666Fax 0191 211 6817

Nottingham City Wide ConstructionPeter McGuire Joe BrownCity Wide Construction NECTA27/31 Carlton Road 3A Cardwell StreetNottingham NottinghamNG3 2DG NG7 6FW

Tel 0115 915 0398 Tel 0115 911 3093Fax 0115 924 3417 Fax 0115 911 3094

Penwith Housing AssociationTrevor BaileyPenwith Housing Association67 Morrab RoadPenzanceCornwall TR18 2QT

Tel 01736 331799Fax 01736 331647

Portsmouth Housing AssociationDavid ThompsonDevelopment ManagerPortsmouth Housing Association247 Fratton RoadPortsmouth PO1 5PA


Portsmouth and South EastHampshire LLiC

Michael BarberConstruction Project ManagerHarbour Regeneration Employment Programme135 Queen StreetPortseaPortsmouth PO1 3HY

Tel 023 9242 1127Fax 023 9243 3632

Queens Cross Housing AssociationIan HughesQC Consultants and Project Managers LtdSuite 12, Firhill Business Centre74-76 Firhill RoadGlasgow G20 7BA


Reidvale Housing AssociationRob JoinerDirectorReidvale Housing Association13 Whitevale StreetGlasgow G31 1QW

Tel 0151 554 2406

Richard MacfarlaneResearch and Project Development149 Chamberlayne RoadLondon NW10 3NT


Contacts

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St Fergus, AberdeenshireTerry LloydMobil Services Co LtdTechnology DepartmentMobil Court3 Clements InnLondon WC2A 2EB


Speke Garston DevelopmentPartnership

Peter CaffryJET Centre85-87 South ParadeLiverpool L24 2SE

Tel 0151 448 1131Fax 0151 448 1915

Stirling CouncilPamela BrownEnvironmental ServicesStirling CouncilViewforthStirling FK8 2ET


Stratford Labour HireDavid Issacs53-55 The BroadwayStratfordLondon E15 4NB

Tel 020 8221 1066Fax 020 8221 1077

Thorpete Associates LtdPeter ThorpeThorpete Associates LtdThe Annex133 Loughborough RoadLeicester LE4 5LQ

Tel 0116 224 1111Fax 0116 224 1110

Tower Hamlets LLiC TeamDave PackmanLLiC Tower Hamlets316 Poplar High StreetLondon E14 0BB


Waltham Forest Housing Action TrustMarilyn TaylorOrient Regeneration4th FloorKirkdale House7 Kirkdale RoadLondon E11 1HP

Tel 020 8539 5533Fax 020 8539 8074

Warden Housing AssociationKumar SivakumarenMalt House281 Field LaneEastcoteMiddlesex HA4 9XQ

Tel 020 8868 9000Fax 020 8852 2398

Young Builders TrustSteve CareyChief Executivec/o Carey ConsultingSuite 2, Bellevue Mansions22 Bellevue RoadClevedonNorth Somerset BS21 7NU


Using local labour in construction - JRF · tenants in employment and, with a planned building...

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