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Building on the 'Green Deal'

Posted on: 2011-11-23 11:27:40
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Phyllis Boardman of PB Energy Solutions joined experts from across the construction industry to discuss with the Guardian how the trade could deliver the government's 'Green Deal'.  The government's plan to retrofit 26m homes with energy-saving measures by 2030 could create 250,000 construction jobs – but does the sector have the skills to deliver?  Full article:

The government's Green Deal, which is at the heart of its carbon reduction strategy, has been described by ministers as the biggest home improvement programme since the Second World War.  The initiative, says the energy and climate change secretary, Chris Huhne, will "revolutionise" the built environment, creating properties that will be warmer and cheaper to run for decades to come.  The flagship policy will also help the UK meet its carbon reduction obligations to cut carbon emissions by 80% by 2050.

The Green Deal, a major plank of the Energy Act, which became law last month, will be funded by private finance with householders paying the money back out of the savings they make on their energy bills.  There is expectation that high street giants such as Tesco and B&Q, or energy suppliers like British Gas will put together their own branded Green Deal packages when the initiative is launched in a year's time.

The success of the scheme, which aims to make 14m homes more energy efficient by 2020 and another 12m by 2030, with the potential to create 250,000 "green jobs,” is entirely dependent on having an appropriately skilled workforce.  But how well prepared is the UK's construction industry and its employees to meet the demand?  Do small and medium-sized enterprises (SMEs) realise the opportunity the Green Deal offers them to make up for the work they have lost during the recession?  And do they have the skills to deliver?

These were some of the challenges facing the construction industry as it counts down to the Green Deal launch in October 2012.  They were approached by a panel of experts and an invited audience at a Guardian seminar in London earlier this month.  The event was sponsored by CITB-ConstructionSkills, the organisation responsible for developing training for the sector.

Carbon emissions

Brian Berry, director of external affairs at the Federation of Master Builders, one of the four panellists, spelt out the impact the Green Deal could have on the building industry, which has been badly hit by the recession; last year alone repairs and maintenance contracts fell by 3.4%.  He said the industry was at a "pivotal moment,” which required "fundamental" change.  The retrofit market – where an existing property is given a "green" makeover to make it more energy efficient – will be at the heart of the Green Deal and is worth an estimated £3.5bn a year, according to Berry.  "We have 26m homes that need to be retrofitted … that's unprecedented since the industrial revolution," he told the audience.

The Green Deal will require 600,000 retrofits a year, carried out by a workforce of between 500,000 and 900,000.  "We don't have that capacity, so we will have to up skill the existing workforce and bring in new people – that is why there is hope for the future," he said.

Under the Green Deal, property owners and tenants will be able to borrow between £3,000 to £10,000 to improve the energy efficiency of their homes.  The loans will come from the private sector, which will then recoup the money from instalments on the householder's energy bills.  The deal is underwritten by a "golden rule,” which stipulates that the annual cost of the loan repayment must not be greater than the savings generated on the householder's energy bills.  If a householder moves home, the Green Deal loan stays with the property and is inherited by the new occupier.

But in order to meet the government's green homes agenda, the sector needs to develop a new "green" workforce that is multi-skilled, creating new generic professionals and tradespeople.  Berry said the workforce of the future had to move away from "base skills" and become more "outcome" focused.  He said: "If we are going to retrofit our buildings, the workforce will have to understand how they interrelate to each other and that requires a new skills set and up skilling."

Mark Farrar, chief executive of CITB-ConstructionSkills, and another of the four panellists, said: "Some companies can see what is coming and are gearing up for what will be an opportunity, but many are not – we have one enormous challenge for the industry.”  His organization is hoping to address that gap through its three-year Cut the Carbon campaign.  The aim of the campaign is to persuade SMEs to develop the green skills they need to help deliver the government's green homes agenda and reduce their own carbon emissions.  It is also behind a series of Green Deal road shows, which are running now through to next year.

Gareth Jones is director of the renewable energy company Carbon Zero UK, which specialises in solar panels.  He said the green building sector needed skilled individuals who can "see all of it.”  Jones, who was a member of the invited panel said: "I keep on multitasking people – I have got electricians and plumbers but they overlap; having these sorts of people who know what they are doing is a great benefit."

There was also concern from the audience about where the necessary green workforce will come from.  Julia Evans, chief executive of the National Federation of Builders, said construction traditionally struggled to find the workforce it needed.  She wanted to know how the sector could attract young people to a construction career.  "How do we get them engaged with a huge project which will engage them for the rest of their economic lives?" she asked.

Part of the answer, according to Berry, was that the sector needed to change its image and attract more women and people from ethnic minorities.  But, according to Farrar, the carbon sustainability and retrofit agendas have "game changed" the image of the industry.  He told the audience: "Rather than it being an image of men in boots, it's now more about iconic buildings."

One of the biggest threats to the potential success of the Green Deal is the current lack of information about the necessary qualifications and competencies needed by the workforce that will have to be accredited to work on the programme.

The government plans to reveal before Christmas details about the level and type of qualifications it will expect from the Green Deal workforce.  But Roger Skehan, a general builder and managing director of Oddy Builders, predicted that his skills and those of other general builders will not be needed by the Green Deal workforce and "will not have access to the market" because the expected retrofit programme will not focus on the basic fabric of buildings – the traditional area where general builders work.  He added his company also did not have the money to retrain staff in other skills needed to be part of the new green workforce.  He said: "It's very difficult to get these [new skills developed] and we don't have money to chuck at it."

Increase competition

In October, the government announced the creation of an industry-backed Green Deal Finance Company.  The financial consortium has been set up as a not-for-profit organisation to offer low-cost interest rates for Green Deal consumers.  The hope is that it will increase competition in the market, making it more accessible to SMEs.

But the construction sector's enthusiasm for the Green Deal and its ability to create the right green workforce to deliver it will all be in vain if the financial package for consumers is too expensive.  Panellist David Bownass, director of WPS Property Development, had this stark warning for the sector: "If the funding is based on commercial lending rates, it will kill it.  It could kill it before it even gets started."

There was also additional concern from the audience that colleges and companies will be forced to play catch-up next year as they rush to introduce the necessary courses to achieve accreditation.  Berry said: "We share your frustration, as it's timely and costly for the industry.  They [the workforce] want to learn about retrofit; there is a willingness and enthusiasm out there.  The frustration we are picking up is that they don't know what is required so that they do the green deal."

Farrar said lack of detail from the Department of Energy and Climate Change was one of the biggest hurdles to up skilling the workforce.  Timescales were very tight and he recommended SMEs should discuss the options with their trade associations and training providers.  He said: "The real challenge is in the very short term.  If we want the training packages to be in place across the country, then I would say that needs to be in place by Easter.”  Future training also needed to be flexible and keep pace with changing technology, according to Farrar.  "There is quite a big agenda here.  It doesn't always require new skills, it might be about topping up or sharpening existing skills."

He believed there was still a need to convince parents and schools that construction is a good career choice: "We need to get to the influencers and get them to influence other people.  We need to get SMEs going through the doors with as much access as we can give them – industry has to help itself with this one."

At the table

Brian Berry, director of external affairs, Federation of Master Builders

David Bownass, director, WSP Property and Development

Gareth Jones, director, Carbon Zero UK

Jane Dudman (chair), editor, Guardian Public Leaders Network

Mark Farrar, chief executive officer, CITB-ConstructionSkills

This roundtable report was commissioned by Seven Plus and controlled by the Guardian.  The discussion was hosted to a brief agreed with, and paid for, by CITB-Construction Skills.  Contact Rachel Joy on 020-3353 2688.  For information on roundtables visit:

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