Cynulliad Cenedlaethol Cymru

Can I welcome everybody to the meeting this morning? Can I do the normal reminder that mobile phones are to be on silent? And turn off other equipment that may interfere with broadcasting equipment. Due to circumstances on the M4, we've had apologies from Dawn Bowden and Jayne Bryant, and we've also had apologies from Gareth Bennett. Have Members got any interests they wish to declare in accordance with the Standing Orders? No. 

Can I welcome the witnesses, and can I ask them if they could give their names and job titles for the record? Are there any introductory opening statements you wish to make? If not, we can move straight to questions, but it's up to you. Joyce.

Chair, can I actually declare an interest? I chair the cross-party group on construction, and maybe not these witnesses, but the following ones, I work very closely with.

Okay.

I'm Ifan Glyn. I'm the director of the Federation of Master Builders Cymru.

I'm Mark Harris, planning and policy adviser for the Home Builders Federation in Wales.

Shall we move straight to questions? And can I apologise for starting late? The previous bit ran over slightly.

The majority of people the committee has heard from have suggested that zero carbon in operation should be the low-carbon housing standard that Wales is aiming for. They've suggested this could help tackle fuel poverty, and help Wales to reduce its carbon emissions from housing, and also costs of energy. What are your views on this? 

I think, simply put, we should be building better homes, but I think it needs to be a phased approach. I think if you were to take a cliff-edge approach where tighter regulations were implemented overnight, that would have a massive impact on the number of small and medium-sized enterprises being able to enter the house building industry, and there are a wide variety of barriers already in place to SMEs. So, therefore, long term, absolutely, we need to be building better homes, but it needs to be a phased approach, and I appreciate that Assembly terms are short terms, but I think that, possibly, the Well-being of Future Generations (Wales) Act 2015 could help with this, because my understanding is that that the aim of the Act is to look for long-term solutions.

Just a quick comment. In preparing for today's session, I have had a look through some of the other sessions and some of the other responses, and I think some of the things—. I'll try and avoid repeating, but there have been some quite useful things said that link to what we want to say. I think around this question, the issue is around the definition. Let's not set ourselves a target that we actually don't understand how we get there. We're happy to work with Welsh Government, and the industry are the right people to work with, to seek clarification on what it should be. Linked to that, we have a tendency of doing something like 'flavour of the month', for want of a better description, and I suppose we saw it with solar panels—a massive push for it, but then suddenly it seemed to die a death. So, I agree with Ifan; it's about making an informed decision about the direction we go and making sure that we do it correctly. We'll come on to skills, but link skills to it, link materials to it, and the other things that would help deliver it.

Well, solar panels were affected by national Government policy at Westminster when, overnight, they removed the subsidy, and that had an effect. I was interested in your view on SMEs. One thing we've learnt in this Assembly a lot is the inefficiency of scale and the fact that SMEs, in many cases, find it easier to do things in terms of change than larger organisations. You seem to indicate the opposite. Is there any particular reason for that? 

Well, you know, you look at the status quo: you've got 80 per cent of our homes built in Wales in the private sector built by five companies in Wales at the moment. So, house building isn't seen as an attractive market for SMEs. There are plenty of reasons for that: planning, lack of viable land, access to finance. Yes, SMEs can build quicker, they can adapt better than the larger organisations, but at the same time, they're just not in the game at the moment. So, if the intention was to tighten up regulations without giving enough warning for materials to come down in price, for skills to improve et cetera, all that would do would be to add to the cost of building new homes, which would just act as another deterrent to SMEs from entering the market. 

Okay. Thank you. 

Just a quick comment in terms of larger house builders being less willing or able to change: I think what it's actually about is understanding the timescales involved in that change. Obviously, the process of buying and promoting land is at least a three to four-year process for larger house builders. SMEs are more likely to buy a plot of land off the market and build on it fairly quickly; they don't have land that they're working on for a long period of time, and that's partly down to the planning process and other reasons. So, it's understanding the impact of a change at a point in time and how that fits into the cycle of bringing land forward. 

Or partly down to the difference between accountancy and cash flow. Okay. Dai. 

If I can add to that, the national house builders—I mean, ultimately, they are all looking at new ways of building and new products. There's two elements to that: obviously, if they can, they would like to get a competitive edge over one of their competitors by coming forward with a new product, but also they want to be sure that anything they bring forward does actually work, and although we're not likely to discuss it today, I've seen from previous evidence—. One of the other things this inquiry is looking at is the retrofit and the need to deal with, probably, the bigger problem, which is the existing housing stock. Five years ago, I was working at Bridgend council delivering Arbed schemes, and we were merrily cladding buildings and filling cavities full of insulation. Five years later, we've got companies setting up now to take cladding off and to take insulation out because we've realised that, actually, either it wasn't the right thing to do or the skill set that delivered it wasn't properly skilled and it was done in a rush. So, what a major house builder doesn't want to do is bring a new product to the market and five years later it's all over the press that these houses have failed or are causing problems. So that's why we would like a longer period, to make sure that we look—. And I think one of the previous respondents talked about an example in the Netherlands where I think it was phased in over eight or nine years. 

Just following on from your answer there, you don't see any problem bringing it in, you just want it to come in over a period of time rather than come in overnight. 

I think it's critical that it doesn't come in overnight, and I think it's critical that we work together to make sure that what we bring in is the right solution.

Thank you. Joyce. 

Before I ask this question, I want to ask another. We've had some previous evidence that said that rather than going for gold standard immediately, we might be better off in Wales, with regard to our existing housing stock being quite old, with incremental change and trying to improve what we have and that that might have a greater impact. Have you got any views on that?

Eighty per cent of the homes that we will be living in in 2050 have probably already been built, so if you're looking to pack a punch, then, obviously, the existing stock is the way you do it, but you've got massive issues in Wales with very old housing stock—the oldest in Europe. You've also got issues with the fact that the domestic construction industry is largely unregulated, so it's very easy for anyone to call themselves a builder, put their name in the Yellow Pages and be in someone's house making energy-efficient changes to that house the next day. So, yes, I would absolutely agree that, if you're looking at—. It's two different fields, isn't it, the new homes sector and the existing homes? But if you want to make real change, then it's on the existing homes that you should be focusing.

I would agree, and my evidence suggested that, obviously, there are far more existing homes—. And, I have got hard copies here as well, if anybody wants one. With my evidence, you were sent the recent Home Builders Federation report, 'You've got the power'. I think what was interesting there was that the money that was saved by a modern house was more in Wales than in England, and we suspect the reason behind that, because it was looking at EPC data from second-hand sales and new sales, is because it's a poorer quality based stock in Wales than in England, therefore there was a bigger saving being made.

The other thought on this one that I had is that, in some of the other evidence that's come out, there's the suggestion that, actually, we've got some quite good standards now, but we're maybe not delivering them on the ground, necessarily. And maybe in the short term, what might be a quicker and easier win would be to look at the way in which we ensure that we do actually meet the standards. I think part of the issue around that is standard assessment procedure testing and some of the testing methodologies we use—are they actually the right testing methodologies to make sure that the houses are doing what they say they should do on paper?

We've talked about introducing zero-carbon standards and what that might mean, and the impact that it might have on the house building industry. Would those impacts be the same, is my question for you, representing the small builder, and for you, perhaps, representing the larger.

I think, in my mind, there are two impacts that we need to consider. I'm sure you'd expect me to say the cost and the impact, the effect, on viability, and obviously a lot of that depends on what measures you actually impose. The cost will be the cost and that will affect everybody the same, although there are arguments to say that the larger house builders, with economies of scale, can cope with some of those costs. But I think we've got to remember that there are lots of other things being asked for as well. So, yes, that's one extra cost, but there are other costs being asked of house builders. We're seeing significant increases in section 106 contributions as part of planning applications to help local authorities deliver some of the services that they're struggling to deliver. So, that's an example. 

The other one is around, I suppose, the perception of people and the understanding of people of what they're getting. And we are, to a certain degree, market driven and customer driven, so if the public start coming through the door—and I think you've already had lots of evidence that people don't really understand the benefits of what this might mean to them—then we will react to customer demand and customer requests.

From an SME point of view, at this moment in time, to build to a higher spec just means added cost. There are two main reasons for that: the technology costs more and also the skills are not there. I know that the Qualifications Wales review concluded that, in this area, 

'Employers and learning providers told us that qualifications have not kept up-to-date with the use of new technologies, including the requirements for low-energy homes.' 

It's good the review recognises that and wants to do something about it, but in the short term it just means that, if you're an SME, to get the product in the first place costs more, and then you haven't necessarily got the skills to install it yourself, so you bring someone else in to do it. That adds to the cost. You'll try and pass that on to the customer, in the hope that they're prepared to pay for it, because it is a better product, but ultimately not all customers want that. I don't think there's enough evidence to dictate whether or not customers want it, because SMEs build in two ways in terms of new homes—it's either speculative or they're doing it off-build, or off-plan. So, if it's off-plan, they'll just be dictated by what the customer wants or what the architect tells them to build. Now, if it's speculative, by building something they've done for years, what they know there'll be a market for, that gives them a certain level of certainty. If they build a higher spec house that's more energy efficient, it's much more of a risk. For SMEs, risk equals costs. So, they're reluctant to take that risk.

Is there another issue for SMEs, and that's perhaps, in a way, the nature of the build that you've just described, which is that there is an issue about accessing products on scale? So, those providing products might not necessarily be easily accessible to somebody who just wants a small quantity.

Possibly, but I think, you know, there are material shortages in bricks and traditional material at the moment. The main reason for that is because the global economy's doing quite well. Other countries keep hold of their materials a lot more than they used to because there's a lot of building going on in their own nation states. So, new technologies—yes, possibly.

Okay, thank you.

Is there a squeezable part, though, of development land prices? We've got phenomenally high land prices in Britain compared to most, if not all, of the rest of the world. You're going to throw Japan at me, I imagine, and say, 'Not everyone', but compared to most of the rest of the world our land prices are phenomenally high. Isn't there an opportunity, if you're building a house that's going to cost £10,000 more, to reduce land prices, the price paid for land, by £10,000?

Obviously there is an opportunity to—for the state, effectively, to intervene in the housing market, and the land-buying market, but I think that's a big animal and a difficult animal, isn't it? The obvious, easy win to me is the use of public sector land, and we are seeing some good examples from local authorities who are building imaginative schemes. I imagine the reason they could do that is because they put the land in for free. It's their land. So, they've got extra money in the kitty to then be able to put the money to other things. But we all know that local authorities are strapped for cash, and their finance people are saying, 'Don't let your land go cheaply. It's an asset.' But that's where it would seem easier for Welsh Government to intervene in the land market than the private sale of land.

I wasn't actually asking the Welsh Government to intervene. I was asking market forces to work. If it's going to cost you more to build a house then you can afford to pay less for buying the land. The price of the land will go down because your competitors are in exactly the same position and it would cost them more as well. So, land prices, which, as I said, are phenomenally high in Britain compared to most of the world, would then reduce to being just much higher than the rest of the world.

I understand the point, and I see, I think, that point's been raised in previous evidence. I guess in the short term the problem is that the increase in build results in the landowner being offered a lower price for his land, and initially the landowner will go, 'Well, my mate sold his land last year for £1 million an acre. Why can't I sell my land for £1 million an acre? In fact, I should be getting more, because house prices have gone up.' And you're then trying to explain: as developers, we still want the land, we want to build houses. And we try and explain that the policies have meant that—and this is one of the big debates that we have around viability and the setting of affordable housing targets, and the impact that that has—potentially, yes, in the longer term, it will alter the market, but in the shorter term, it will potentially stop land coming forward. 

Okay, thank you. Dai.

Yes, I was aware and followed the discussion on the adopted roads, just to deal with that initially. I understand that there is a taskforce going to be set up, and hopefully HBF will be asked to be involved with that. And very quickly on that, I know it's going off subject, but it's not so much the builders don't want them adopted, it's just the delays and the costs and the difficulties in getting them adopted, which is why we've ended up where we are.

In terms of the plot shop idea, I know that the city deal—the south-east Wales, the Cardiff city deal—have been looking at that, and both myself and Ifan have met with the housing sub-group and are trying to work with them to make sure that that gets delivered. I think one issue that's going to be key there is that the right pieces of land get allocated, because, putting it simply, the bits of land that nobody else wants—it's no good allocating them for self-build, because self-builders probably won't want to go there either. We've all seen where self-builders want to build—you can drive up the Valleys and you can see already the self-build plots, built slightly above everybody else, looking down on them in the nicer locations with the nicer views. So, you've got to make sure it's the right sites.

In terms of just the five nationals, I think the easy answer to that is that, unfortunately—and I don't like to mention England, and I know I shouldn't—most of the nationals are based in England, and their decisions are being made in England, and if it's harder or if it's more expensive to build outside of England, then their resources will go to England. I want to make it clear, and I know it's been said in other sessions, I'm not saying that we're going to pull out of Wales. It's just that less money may be invested in Wales.

Interestingly, I think we are also seeing some new entrants. Kier Living have just expanded a new Cardiff office and are buying some big tranches of land, so there are new entrants coming to the market. I think the more land that becomes available—and I think we will see it off some of the large sites in Cardiff—we will hopefully see some of the other nationals who have built in Wales in the past coming back into Wales.

Simon wants to come in, but, of course, some of the nationals are doing so well that their chief executives get a £100 million bonus. Simon.

Stalled sites.

I'll just quickly add to that. Both myself and Ifan do work closely with the Welsh Government private housing section. We're aware that there is shortly to be an announcement on stalled sites. We know no more than that at the moment. We have, coming up in April, one of our house builder engagement meetings, where the Ministers come to the session, and representatives from SMEs and nationals go. The plan is it will have been launched before that next meeting and there will be some information given out in that meeting, so that we can understand it more fully. 

Okay. Diolch.

David.

Yes. I just wonder if I can gently push you in a slightly more optimistic direction. Now, I don't think your basic position is that, since we've moved from wattle and daub, things have got horribly difficult. Innovation has always been fundamental to mass building. We've had high levels of regulation, particularly on building standards, since the 1930s. There's no association whatsoever between that trend and lower house building. The explanations for lower house building lie elsewhere, I would argue. Something like up to a third of our carbon footprint is through domestic consumption at the moment. So, what do you think is your responsibility, or the responsibility of the sector you represent, for trying to meet our carbon reduction challenges?

Can I just make a point? If you look at overall Welsh emissions, since 1990 levels, from 2015, overall emissions have dropped by 20 per cent; however, in the same time period, emissions from buildings, mainly homes, are 32 per cent lower. So, I think inroads have been made already. I think we're doing relatively well at the moment. I think there's always room for improvement, but our new buildings are relatively energy efficient, as it currently stands.

Mr Harris, do you share that complecency?

I've provided some similar stats. When I've looked into it, to be fair, there were lots of different stats, as is often the case with stats. But I provided in my written evidence some similar stats that suggested that the—. And I think that's backed up by the energy report that we did, which shows that new homes are saving people money. As I mentioned earlier, we are all looking to make improvements. What we're saying is that, just at the moment, it seems we're slightly fearful of some legislation that comes in that simply says, 'Zero carbon, by a date' and there just isn't the background understanding and knowledge of all the things associated—the skills, the labour, the costs, the public perception of that. A sudden change like that could have the effect that we claim it would, potentially. But I agree, if it's brought in over time, and understood, it's far less likely to have the impact that is being suggested in terms of reducing house building.

So, the basic position is, 'It ain't broke, so we shouldn't be looking to fix it', in terms of new building anyway. Obviously, retrofitting is another issue altogether.

From my point of view, and I apologise if I came across as complacent earlier, I think it's just a case of, if we were to say, 'Based on research, in 20 years' time, we want to get to carbon-zero', that's fine, but it just has to be a staged approach. Because, if that doesn't happen, you're just going to deter SMEs from entering the market, and there are many barriers in place already. But it's not just the construction companies—you've also got the materials, the designers, the skills required. So, we really need a long-term solution to this; it can't happen just within an Assembly term.

Okay. Well, I don't think anyone has suggested it would be that short term a change that we would be urging. The evidence we've heard—where there's been transformative change in some countries, it's been an eight year-plus period. 

And then—I suppose this is more for Mr Glyn—how are we going to get effective retrofitting if we're not developing the use of new materials and understanding them, and seeing them in new build? That's kind of what leads the market, isn't it, or do you think they are quite detachable? 

I think they're quite detachable. I think it's a lot easier to change how you build your new homes than it is your existing homes. We've got a culture in Wales and the UK of—you know, we don't tend to look after our homes particularly well. But I think there has to be focus as well on the owners of homes, so look at grants for people who can't afford to retrofit their homes, and for that to be a sustained intervention, but also look at people who can afford to retrofit their homes—why aren't they doing it at the moment—possibly looking at 0 per cent loans, et cetera. Also, it'd be good to work with banks to tie mortgage rates and how much you can borrow against the energy efficiency of homes, the simple equation being that if it costs less to run your home then you should have more money in your pocket to spend on a mortgage.

Just a couple of comments: I'm aware there is a review of Part L of the building regs that was announced last year by the Minister. I think it was delayed because of the Grenfell incident, but I understand that is coming forward this year. I'm presuming that this inquiry and a previous, similar inquiry will be feeding into that work. I'm sure, as usual, we as industries will be able to engage and work with them on that. So, I suppose understanding where these changes are coming from is something else.

Although I guess retrofit is not relevant to my sector, just one quick comment on it: we've mentioned public perception, and, obviously, I mentioned the fact that we've now got companies that are taking insulation out. Unfortunately, the bad side of what happened gets far more press than the good side. I actually got a phone call yesterday from a company saying they were offering a free service to survey my loft insulation because, supposedly, it's been in there for five years and it's now starting to deteriorate and store water and could cause damage. Well, that's the first I've ever heard of that, but there are companies out there ringing around, offering that service. So, unfortunately, the poor performance is what makes the press, isn't it, and what people understand, and then puts people off, potentially, having the change.

To conclude on the actual building side before I talk a bit about skills, we have heard that one of the advantages of approaching zero carbon or whatever—certainly closer to that than we have at the moment—is that we're using new and more modular-type materials, shifting away from brick and block, and this may offer scope, too, in terms of the design of buildings, which is, obviously, probably part of what we will have to be looking at if we're going to double the level of house building in the next generation, which a lot of people think is what we need to do, where we're probably talking about denser building models. Is this part of your sector at the moment and the thinking of what might be happening out there, or are you still pretty much committed to the existing building approach?

I think, obviously—again, it's come out in other sessions—that what happens in England does drive the housing market, to a certain degree, because the nationals are based there. If they're doing it in England—you know, we argue we don't want it to be different in Wales; well, if it changes in England, it should change in Wales, naturally. There clearly is a more significant drive, I think, in England to build more homes, and it does appear at the moment that the answer is modular building. I think all companies are looking at various ways of doing that. 

I think that just one word of warning is that, obviously, you can still build a modular home in a factory, and it won't be a zero-carbon, and it can be a poor-performing home. So, it's making sure that the technology that's being—. You know, it's the language and understanding what is the preference. Is it about the speed of building, and maybe then not necessarily getting the quality, or is it about the quality and finding methods of delivering that?

I think modular homes and off-site constructions could—. It's not a silver bullet, but it could play a part in answering some of these issues. I think the SME construction sector is, on the whole, relatively wary of it, because they do see it as a—. It threatens their way of life, in a way, you know. That's not a reason not to do it, but those perceptions exist. Before moving on to skills, that's absolutely key, that the qualifications that are involved in the house building industry are interlinked with new technologies coming along.

Another point I'd like to make is that when we monitor and look at the energy efficiency of homes, we should also be doing a lot more of not just looking at how it's performing on day 1, but the whole cycle. It's how that off-site material is constructed, but also how it's transported, how that house is when it's demolished. The carbon impact of the whole cycle of a home needs to be considered, not just day 1 performance.

If we shift, then, to skills, are there any—? We've heard really quite conflicting evidence, I think it's fair to say, from those that say, 'Well, actually, once there's a market, the skills will follow; it's not a badly skilled workforce at the moment and it's adaptable,' to another side saying, 'Well, it's actually quite old; a lot of the younger people are from abroad, and Brexit may affect that; and for people within the UK, it's not a very attractive option, and that's an embedded problem.' So, which side would you be on in terms of the skills question and the desirability of this sector for new entrants?

From our industry's point of view, there is no doubt that there is a skills issue, and I think the skills issue has lots of things that affect it. So, yes, there are certain parts of the industry where age is a real issue. There are certain parts of the industry where the attractiveness of doing it is a real issue. And there are certain parts of the industry where the actual training that's being given in colleges is an issue. As an industry, I think, to be fair, we've probably left it to other people to sort for us in the past, but we've now realised that isn't happening quickly enough, and we are doing a lot of stuff ourselves.

The HBF has set up a home building skills partnership, and—apologies—I did send some documents over at 10 o'clock last night, which obviously you haven't had a chance to look at, but you can look at in your own time, and they're around ad campaigns that we're doing and information on what's happening around training. There was a boot camp in Newport last year, which helped to upskill some people in certain trades. So, the industry is at least now starting to do something about skills. I suppose where we've got to be careful is understanding if we then move our technologies to building in a different way, how we then either transfer the people we have to those new skills that are needed or understand the time that will take—you've got to get the courses up and running, there needs to be enough people interested in doing the courses for that to happen, and then, obviously, it takes time. Apprenticeships, obviously, are back in favour, and the push for apprenticeships is helping, because you can be trained and working at the same time.

Before we look at skills in terms of new technology and energy efficiency, et cetera, to address the overarching issue with the industry: skills is one of the biggest barriers to growth for the industry. I think there are two main areas where the industry fails: we fail to attract higher ability or high academic achievers into the industry, and we fail to attract women into the industry. So, you're talking about a pretty high percentage of the population there that we're failing to attract. 

The Qualifications Wales review of construction found that the navigation of qualifications is complex—how you enter the construction industry, how you work your way through it. If you wanted to be a music teacher, it would be quite straightforward to know how you get there. You know, you do a GCSE, an A-level, a degree and then you train to be a teacher. It's pretty straightforward. In construction, it's a lot more complex. We've got different levels; I'm not sure I quite understand it, to be honest with you. So, for youngsters, teachers, careers advisers, et cetera, it's not simple.

Another thing that we've been looking at as a federation is that one of the issues with the industry is the image of the industry as a largely unprofessional industry, especially in the domestic field. A lot of those views are, unfortunately, correct. Especially the domestic construction industry is a largely unregulated industry, which makes the UK an anomaly in the western world, because most other countries regulate their builders in some ways. So, we've done some work with Welsh Government—the last Welsh Government—on this, but it was decided not to take it further at the time, the idea of looking into the licensing of builders, potentially. That would be the end role, at least. The reason for that at the time was because consumer protection, which is the angle that Welsh Government at the time was coming from, isn't a devolved matter. So, my colleagues in London haven't really pushed Westminster on this because there hasn't been much appetite for this. However, I think Grenfell's changed the dynamics in terms of standards and quality. So, therefore, this is something that we are consulting on with our members, and we're reviewing this. So, the licensing of builders could potentially professionalise the industry, which will make it more attractive for youngsters to come into the industry. So, there's a possibility that that could have a big impact on improving the image of the industry.

There's one area that is fully licensed, which is Corgi—

Gas Safe.

—the gas installers because getting that wrong could cause a substantial number of deaths. So, that is highly regulated. So, I'm bemused as to why it is unregulated for everyone else. Sorry, David. 

I really want to see much more building. We are barely building 7,000 homes a year in Wales. We probably need to be building 15,000, just to get back to—you know, to have a chance of meeting demand by 2030. Certainly, in the last generation, we should have been building 12,000-odd, I suppose, and we've been way under that, so we've got a backlog. I want to see transformation here. I want to see housing back as a central issue, up there with the health service. But what I find—if I can be really direct about the evidence that both of you have given this morning—is that it's a mixture of complacency and low ambition about wider social and political goals. You've got the Well-being of Future Generations (Wales) Act 2015, for instance, around radical carbon reduction, and then you have definitely raised some issues that are very important in terms of skills, the robustness of materials—there is a danger that what's fashionable today is not going to work in 30 years' time—but, you know, if you're really going to argue that you want more graduates and you want more women and you want us to move to some form of protected title for builders, surely you should be projecting an image of innovation and using new materials and that all being part of this exciting industry now to enter. Whereas, really, the tenor of your evidence this morning has been, 'It's fine as it is, more or less. We can do a bit better, of course, but, broadly, the model works.'

I understand the comments you made there, and I think there is a balance between, obviously—. I accept you may not agree with this, but, you know, we know what we're doing now, it's a reasonable standard, it's much better than it was, and if you shake that up, initially, certainly, it's likely to result in fewer homes being built, because of the changes involved. So, if your concentration is on building more homes—

We are not building many now, are we, let's face it? Can we go lower?

Well, I think last year it did drop slightly by 30 or 40 units in the Welsh Government statistics. I suppose we need to understand why we're not building enough. Obviously, our industry, at the moment we suggest, in Wales, it's about the availability of land, and it's about the planning system, which brings land forward, both at a local plan stage and also then the detailed stage. In fact, going off the line slightly, the Welsh Government did a survey last year of major planning applications and found that, on average, 24 of the conditions were pre-commencement. So, you had 24 conditions that you had to deal with through an under-resourced planning department to try and clear before you could start on site. So, others will say planning isn't delaying it, but there appears to be clear evidence that it is.

I think the next point, really, linked to your comment, is around public perception. We were on the Barry waterfront site on Monday with the Minister—the housing Minister—launching the leasehold announcement. They're all brick-built—mainly brick-built—houses, but most of them are timber-framed houses but they're clad in bricks to look like traditional brick houses. I think there still is a perception by a lot of people that a brick house is a solid house, is a house that will last, and is the house that we want to live in. So, there is education needed. I think things like, for instance, smart meters are an area. I see it at home at the moment. In the last week I've seen that I'm spending more than £6—nearly £7—a day on my gas and electricity. If that keeps going, it starts to get a message to you. So, I think there are things that are happening with technology that will help us with that education. As I said earlier, if customers start coming through our sales doors and say, 'Show me why I should buy your house because of its energy efficiency', you can be sure that if that customer says, 'Well, actually, I'm going to go and buy from one of the other competitors because their house is more efficient', the other house builder will make their house more efficient.

Isn't that the wrong way round? Because what David was trying to say—and said very eloquently and forcefully—is that you should be leading the debate, you should be the innovators, you should be the people who are trying to sell this, not waiting for customers. I don't know who is going to inform them if it's not yourselves, on a large scale, to suddenly wake up to the idea that they need something else. I think that that was the rub of the argument, and you've just answered it in exactly the same way that David was trying to get underneath, and that was the way that you've answered it before: 'We're not going to innovate, we're not going to change; we're waiting for the customers to ask for something new.' But how on earth are they supposed to know what something new looks like?

I fully accept that. I guess the answer to that is around risk and, obviously, for a large company to suddenly start building a lot of houses in a different way, there is a lot of risk associated with that. If that is taken to the market and the market doesn't like it, then it causes a problem. So, I think what we've said is that our industry is behind the scenes, looking at lots of different ideas, but any help that can be given to them by research and by other organisations to say, 'Well, actually, this should be the route of travel, this is what you should do', and link that with education, so that the public understand that that's the route of travel and it's the right thing to do, that will help, then, to move us towards what you're suggesting, where the builders are the innovators.

Simon.

Yes. It often gets referred to as the performance gap, and I think we probably need to break that down into a couple of areas. Firstly, a house is built with a number of materials and products, so, obviously, if those individual materials and products are failing, arguably that's not the fault of the industry. I think some of the evidence from Grenfell suggests that the proper checks aren't being done at the manufacturing and production stage of materials. So, that's one issue that clearly can be tackled. 

You then take the product and you have to physically build it into a house. So, it's the way in which it's installed, and I guess that links back to skills and have we got the right skills, and, to a certain degree, potentially also, the pressure we're under to deliver more homes and deliver them quickly. Certainly, again, in England, there seems to be a lot of talk about the speed of delivery, as well as the amount. 

But, with the greatest respect, you're building things that people should be using for the next 100 years. So, six months now, put against 80 to 100 years' performance—. Surely, that's not a very sensible way to be doing this.

No. And, obviously, you touched on the checking of this. Don't, please, see this as anti-innovation, but, obviously, as part of any innovation, you need to make sure that the skills of the people who're actually responsible for checking it are—. You know, we've talked about lots of other skills, but that's a skill that maybe we haven't mentioned.

I did earlier make the offer that we would be happy, as an industry, to work with whoever to try and make sure that the houses that we currently build and the standards we're currently meant to build to we do meet. The HBF do operate a starring system, and our members, ideally, like to be able to fly the flags and have the balls to say they're a five-star rated. And that's based on customer feedback that's done independently about, 'Are you happy with your home?' So, there are systems in place that do try and push for that, but, certainly, as an industry, we're more than happy to try and do more.

But just to pick up on one particular theme, I know we're running out of time, but, just to pick up on this particular theme, the customer will give feedback on the home, but I think we've already discovered in this inquiry—in fact, you've already said this morning—that the customer's not necessarily the person who really understands the energy performance of a home. So, they might be very happy in the home and not realise that, actually, they could be saving £500 a year if they were living in a slightly better insulated and performing home. We've had the problem, which many of us have had to face from constituents, with very poorly, badly installed cavity wall insulation post construction, so I take that point that was people who were not properly trained and there seems to have been a difficulty there. So, we really need a stronger, independent view of this. You've hinted that building regs, perhaps, are not being policed as thoroughly as they should be. We've had evidence, certainly, on other days of that. Is that something you do agree with, that there needs to be powering-up of either the inspection regime or the way that the testing happens over a period of time so that we're sure that the building regs that we pass here now—? They've been devolved; we'll be passing building regs as a Parliament, yet we don't really know whether the people on the ground are able to ensure they're fit for purpose.

With regard to professionalising the industry, we want what we build to be doing what it says on the tin. So, if that means more policing of building regulations, we wouldn't have a problem with that.

No, and I've made a similar offer, that accepts—. You know, it's NHBC standards—it's not just council building regs; there are private bodies as well—so, it's looking across the whole industry that polices the way that products are put together and homes are built.

Okay, well, can I thank you very much for coming along this morning and answering our questions? You will be sent a transcript of it. I would urge you to check it because, sometimes, if you're anything like me, when you turn away, it doesn't necessarily catch all the words you've actually said. So, it is worth checking it in case some words have been missed. Can I, again, really thank you very much? You've been very informative. Thank you. Shall we have a short break until 10 past?

Can I welcome you here this morning? Would you possibly give your name and job title for the record? And do you wish to make any short opening remarks before we go into questions?

I'll start, then. My name's Donna Griffiths. I'm the partnership manager for CITB, the Construction Industry Training Board in Wales. 

Hello, bore da. My name's Anthony Rees. I'm the regional manager for Cyfle, and we run the largest shared apprentice scheme in the UK. We employ 130 apprentices in the region.

Bore da. I'm Owain Jones. I'm chair of Cyfle Building Skills, and I'm also a director with a company called TRJ, which is an SME based in Ammanford. 

Thank you very much. If you don't want to make any opening remarks, if I can start.

To what extent does the Welsh Government currently engage with skills providers on the detail of proposed energy efficiency measures? Is this engagement timely and extensive enough to ensure that appropriate training and skills needs can be identified and upscaled? Are we training people—? Are the Welsh Government engaging with you, the training provider, to ensure that we have skilled people who can do the jobs we want done?

You can see how it's passed down to the contractor. [Laughter.] We know where we are in the food chain.

At the top.

There's been little or no consultation that I'm aware of with SMEs with regard to energy efficient design. There have been things such as the Green Deal, Arbed and code 5 pilot projects, but their impact has been limited and not particularly accepted as commonplace by industry practitioners.

Anthony, do you want to go next?

From the skills point of view, actually, it's a work in progress, and I think some of the comments further down the line we'll get more involved on, maybe—the training and the engagement between the client, obviously, the contractor and the training providers.

I think from a CITB perspective, we do recognise that there has been some engagement around some of the measures, such as built environment sustainability training, and things like that. However, engagement has been particularly limited, and we would like to see more meaningful dialogue going forward to ensure some of those skills are embedded into some of the qualifications and training requirements.

Thank you very much. Dai.

I think there's a lot of innovation in the industry, in the sector, so I agree there. I think procurement is an issue for us in the region. It's the confidence of the work and the length of the work, and obviously that's—to be fair, the SME is the trainer out there in Wales. Ninety-seven per cent of apprentices are with the SME sector, especially in south-west Wales, so I think it's the confidence, really, that if the work is there, and the length of the work is there—I think that's where there are training opportunities. So, I think it's a chicken-and-egg a bit here, but it's identifying the skills and, obviously, with our off-site partners, it's the confidence to—it's for the time of that innovation. Because it's not a magic wand. It doesn't happen overnight. And it's the confidence that we can build something over a period of time, not that there's a quick fix. It's not that we want a quick fix in your Assembly time, but maybe it's more of a long-term plan for skills and development.

In April 2017, CITB did actually produce a report on off-site construction called, 'Faster, Smarter, More Efficient: Building Skills for Offsite Construction', so we do recognise that there is great potential for the industry in off-site construction. However, at the moment industry output only accounts for about 10 per cent. The industry will be reactive to the demands placed upon it by Government and by building regs, so it is very much driven and will react to some of those demands, but where we see the greatest potential would be around standardisation of construction, and some of those things like twenty-first century schools and housing—housing would probably be one of the biggest opportunities for growth for off-site. But linking back to the points that Owain and Anthony made, it needs to have long-term investment and long-term thought because the industry does need to plan for the future, and by having some of that certainty of pipeline, it would be able to invest in skills for the future.

We've heard the last set of witnesses and you talk about Assembly terms—because no Assembly can bind the next Assembly. Obviously, there's going to be a level of concern amongst people working in the industry that a change of Government could end up with a change of policy. Would it help if the current spokespeople for all political parties actually said something very similar about how they wished things to go on, so that that level of concern would disappear?

I think it would certainly give confidence. I will compliment—there is a particular housing association, which covers all parts of Wales currently, that has just put out a procurement that has a 10-year term. This is unknown in the sector and it shows great innovation on their part. Whilst it ultimately is going to be for a lesser number of contractors, it does give both client and contractor, working with the design side, the time to look at these innovative ideas and to actually develop them, and also to see whether there's commercial success to some of these, because we can all have the eureka moments and think, 'That's a wonderful idea', but have we got the time to actually put it in place to see if it has commercial longevity?

And I think with that, there's a chance to pilot certain things, especially from my aspect in terms of people development. There's a confidence to pilot and test things, because you don't know sometimes. It's not one of those where—you know, when you test some things, it doesn't always work, does it? So, you learn from your mistakes sometimes, especially when it's on something new, on innovation. 

We have, thanks to CITB, the Construction Wales Innovation Centre, which is currently being constructed in Swansea, which is terrific for our industry. Anthony and I were fortunate to have links with CITB in Scotland and we visited the Construction Scotland Innovation Centre in Glasgow recently—a slightly different focus to, I think, what we've got in Wales. But what was very pleasing to see was that their thrust was very much on material development. They were looking at whether there's commerciality in using wool as a thermal insulator. They were doing a lot of research on timber and techniques of bonding timber, because they're very strong on timber framing in Scotland, and they have a large timber resource. But they had invested in a lot of equipment that allowed companies to go into the facility to trial and test the success of these products, with the ultimate goal of seeing whether there could be a long-term business developed from that.

I think, potentially, we could be looking at similar things in Wales. Waste paper—there's a mass of waste paper. There was a producer within Wales turning that into insulation. It's being used successfully by Tŷ Solar, which in fairness is a small SME based in Cardiganshire, or Ceredigion as it is now. They are now having to import that insulation product from Belgium, and I find that, when we're talking about low-carbon homes, it's ridiculous that we're having to import from Belgium something that we could be, with some innovation and support, looking to see if there's a business model so that we can be creating this insulation close to home.

Yes, and especially with Brexit and the unknown factor there. Do we produce more in Wales and the UK? So, there's a bit of uncertainty, but there could be potential opportunities. 

We're finding that January, February and March is the time where material price increases are coming through the door. Everything at the moment is going up by 10 per cent or more, some even to 20 per cent. Last year, projects were being delayed because there was an issue with one particular insulation producer in Europe, and the demands that China are also putting on building materials as well. So, you were finding that, if you haven't pre-ordered your material, your job would be on stop because you couldn't get the materials you needed to complete the project. So, we're having to futureproof and future plan when we commence projects now, because of affordable materials in certain aspects of construction. 

David, are you—?

We've heard from some witnesses, and from a range of witnesses, it has to be said, that the SME sector has particular difficulty in accessing appropriate skills, courses and then upskilling, and that this is why there isn't so much innovation, perhaps, in the sector. Is that your experience—that the whole skills issue and the more demanding level of skills that we need with some of these new materials and their installation create an inbuilt disadvantage for SMEs?

I think it's not just SMEs. I think the whole of the construction sector does suffer from a lack of certain trades and provision right across Wales. Traditionally, for example, apprenticeships are only offered in four of the trades. However, construction offers vast opportunities and a vast number of occupations. The Construction Wales Innovation Centre, which has been mentioned, which CITB are investing in, is trying to plug some of those gaps and is looking at where provision currently doesn't meet demand and putting on those courses. However, further education colleges—as I said, there are a number of gaps that FE colleges are not plugging, and the industry is being quite responsive to some of those innovations and looking at how we can best deliver those, either in-house or working with manufacturers or working with private training providers.

There's a new report—the Qualifications Wales report has just come out, and I've got to be fair that there was a good dialogue there with the construction sector and the SME sector. Because we've always said before, when we see reports, 'Who are the industry reps?' They're probably tier 1 led, not management led, not maybe a true picture really of the issues. So, it's a report that our colleagues—we were heavily involved with it. But what that report says, really—there are recommendations there that there could be additionality opportunities within apprenticeship qualifications, and I see with the low-carbon agenda that there could be an opportunity for a unit of accreditation there potentially in all apprenticeships. It's up to us to—. There again, the qualifications are normally Welsh Government—you know, City & Guilds—so you've got to come back to where the qualifications have got to be fit for purpose. They say the qualifications are changing in 2022. I think we've got to try and turn that oil tanker a little bit quicker, because we've got issues; we've got to be a bit more proactive, really—everybody: providers, and SMEs maybe, to lead that with our CITB and CWIC partners. 

There's a big movement towards a Passivhaus approach to construction at the moment, especially within the school building programme. Just to give an example of the lack of availability of training, we as a company have very recently had to send four of our operatives to be Passivhaus tradespeople trained. They had to go to Stansted, and it was quite difficult to actually locate the course even as far as Stansted. I think that's where CWIC will come into its own—by looking at the demand for training within the industry and trying to run those courses locally and trying to embed. Whilst Passivhaus isn't the answer for everything, it is a very good standard. Whilst we possibly shouldn't take all of it on board, it's good practice for the young constructors of today. 

What about the point that compared to the large house builders—three quarters of the market, or whatever, is dominated by them—SMEs find it more difficult to face these skills issues? Is that true or is that a misconception?

I think it's partly a misconception. You have a lot of enthusiastic SMEs that want to embrace this. The biggest barrier in their place is the certainty of workload moving forward, and if they had that certainty, they would be prepared for the long-term investment.

And the availability of the courses, as you mentioned in the past.

With the Construction Wales Innovation Centre and with—. We've still got our own industry training board. They are not the deliverers of training any more—they are far more the facilitators of training. And we have the ability through various funding streams to put bids together to source some of the training that's needed by industry.

I think, Owain, from—. As an industry rep, really, because of the commercial end, through no fault of anybody, the training element in a house builder is minimal. If you saw the outputs of, potentially, an SME building for a registered social landlord, the community benefits are—. You can't compare it. Of the actual gross domestic product to—. If that's the honest truth, it's huge.

I look as an SME builder with, partly, a social service provider as well, because of the Welsh Government community benefit tools with the softer community benefits that we have to deliver. But I think with the majority of SMEs now it has become ingrained as part of their psyche that we have to do this and it is good for us because we have to increase GDP.

But I think it's the culture too, and I think there's a culture within our SME sector. And, Joyce, you've worked with us—you know the outputs of the region and I've got to commend, really, the SME sector. On the training agenda there's a different culture to the commercialism of maybe a big house builder.

And what's your view in terms of that core question here?

Yes, I would support the statement that, actually, SMEs do the vast majority of training within construction, and not just training, but actually retaining their staff as well. Two thirds of all construction workers are actually trained and retained by SMEs in construction.

There's been a structural issue as well raised I think by the Chartered Institute of Personnel and Development. A recent report said that 30 per cent of construction workers are over 50 now and that compares to only 20 per who were over 50 in the 1990s. And getting on for 20 per cent of the workforce is actually European, and they overwhelmingly are younger people. Is that a fair reflection, in your view, of the workforce? Obviously there could be challenges there from the availability of European workers and our lack of new entrants, possibly, in terms of the home labour workforce.

Yes, I would agree with that. Our own workforce is probably a reflection of that and the real challenge is to mentor young people when they're in our industry. We have to utilise the skill levels of our over-50s to be mentoring these young people, to give them the cross-section of skills and behaviour needed for the industry. I think that we suffer from an image context, because mum and dad don't want for their daughter or son to be joining an industry where you're out up to your knees in mud, mixing cement, but we are a far more diverse industry than that. There are so many abilities to learn and earn and you're looking at a good bricklayer earning as much as a college lecturer, if he's skilled and has got a work ethic. But there are also opportunities. There's a great need for quantity surveyors within our industry. Associated with CWIC, there's going to be a school of architecture now opening on the SA1 campus. There are opportunities, but we find it difficult to sell the widespread nature of it and career prospects within the industry.

Yes, with our partners CITB and looking at local colleges, when they make the choice at maybe 14 or 15, what we've asked for, maybe in the next 12 months, is that we look at, instead of them coming in at maybe 15 or 16 as a carpenter onto a full-time course, them coming in on a construction—to do a foundation construction year. So, he or she will come in, not just doing carpentry or bricklaying, but to do a construction foundation year pre-apprenticeship. So, in that year, you could do a bit of bricklaying, plastering, and then you could have maybe heritage in there and maybe something low-carbon and maybe—[Inaudible.] Make it more rounded, make it a better offer maybe, make it a bit—[Inaudible.]—because that would be a great opportunity then to link work experience opportunities into a pre-apprenticeship programme. It needs a change, because what we've got out there—. There was a stat last year: 50,000 youngsters came into UK colleges; only 10,000 of them transferred into apprenticeships or full-time work. Is there a skills gap? Well, enough came in at 16. We've got to do more—I think we've all got to do a bit more or change, tweak things, within that first year. 

That's an interesting point because, certainly, the local FE college here tells me that they don't have a problem getting people onto the courses, but then your experience of what happens afterwards is the issue.

Yes, I think we recognise that the industry average age is 51 at the moment, and that number is increasing, unfortunately. Again, around the perception of the industry—sorry, your comment was on European workers—we've actually done some research on the likely impact of Brexit on the workforce, and it won't have a huge, significant effect in Wales. Obviously, the most likely area is London and the south-east. However, Wales is actually predicting construction growth—it is the highest region for construction growth across the UK over the next five years, so the opportunities for people to come into construction are huge. We're looking at around 4,500 additional people to recruit into the industry every year, and that's looking at average retirement age, it's looking at mobility issues and all of those things. So, the opportunities for people to come into construction are there—the jobs are there—but we do recognise that the industry also has a perception issue.

Joyce.

I think we need to separate out some thinking, because when we talk about large construction firms versus small construction firms, I think I'm right in saying that, whilst the large construction firms may well acquire the initial contract, it's the small construction firms that actually build in most cases. So, I think we need to perhaps clarify that I'm right in thinking that. And then, in terms of innovating, I think you've already stated that most of the innovation is coming from the SMEs, and I think that was clearly demonstrated this morning. So, moving forward, and you talked about the fact that we're going to have our new centre of excellence and training, how innovative might that be and how fleet of foot might it be—I'm not talking about doing things overnight—to deliver the new workforce that we need, which is younger and more diverse, but also to meet the challenges of tomorrow?

The way that we've set up the funding for the innovation centre is for it to be very reactive and responsive. We have the key performance indicators that we have set against occupational targets, and, obviously, those are weighted for those that are in most need. You won't see a prospectus on the Construction Wales Innovation Centre website, because the point is that it needs to be reactive to employer needs. So, the way it operates is that employers will request a course, and if there's an evidence base behind that need, then the innovation centre will develop, if needed, or source a delivery partner to put on that course. I was just speaking to Owain this morning, who had a really good example—which I wasn't even aware of—of where it had been really reactive.

That's to do with demolition, actually; you have to demolish before you can rebuild. To give you the example of the Neath 'homes as generators', which is a Pobl project, working with the university, procurement does sometimes work for the SMEs, because we've been fortunate to secure that project, which is the first in Wales, I believe, but the first element of that involves the demolition of an existing care home, so we're having to upskill our workforce in a demolition qualification. But through—. We've got to be positive about some Welsh Government initiatives, but the innovative housing programme is a potential route for us to train and get people embedded in low-carbon housing. I think, with the project in Neath, the opportunity to work with Neath college, with CWIC and with Swansea University, we've got a real chance to get the Cyfle apprentices, our own apprentices, our supply chain as well, to really get enthused by the emerging technology. I'm very pleased that it's one of our apprentices, who's now become a site manager, who's going to be running the project, and he can instil the interest in the youngsters coming through.

Thank you. Dai.

I think what we are looking at piloting, Owain—we've done a bit of it—is supporting the 50,000 that's in the UK—not the 50,000, but, in our region, can we support more work experience opportunities, so they get the site exposure before they choose, really, the apprenticeship? Can we do more? Can the qualification be a bit more flexible? Qualifications Wales are looking at some of the recommendations. Can our tradespeople be a bit more multiskilled? Can they be more aware of new technology, Owain, within the qualification? And we are looking, with our partners here, at the commission bid for mentoring and to put a comprehensive mentoring programme there, which improves, maybe, the industry, Owain, what people think of the industry. I think there's a heck of a lot of good stories there. There are some fantastic youngsters out there, and we don't talk about the good that we've got within the community. We'd rather see a bad headline than the 99 good headlines that we could have in the region. We don't do enough positive work with case studies and the blinking good youngsters we've got within our communities.

Over the next three to five years, CITB has committed—just off the top of my head—around about £1.5 million to education engagement programmes. That's all through consortiums of construction employers who have all come together to address and have identified the need for school engagement and to address some of those issues. School engagement is, and has been for a while, a particular problem because it is really difficult to try and get into schools, and that's really where the opportunity lies to sell construction and the opportunities that it has. We're looking at doing things like experiential learning within a construction context, looking at contextualising the curriculum and producing resources and toolkits for school engagement from primary school right through to higher education, and we're looking at school engagement activities. So, looking at after school clubs and activities that construction employers will actually come in and deliver. So, the construction industry is actually providing those resources to the schools at no cost. We just need the engagement from schools, and we are working closely, as I said, with Careers Wales and the education authorities to deliver those things.

Diolch yn fawr.

Joyce.

If it is the case that Wales has ended up with more stringent energy efficiency standards than all the rest of the UK for new-build and also existing houses, does that give you any concern about any difficulties that that might bring about with cross-border working?

Go on.

It might be a personal opinion, but I think we should be moving parallel to the other nations. Whilst I applaud us trying to go beyond, I think, because of the lag, and, as we've talked about, turning the tanker, we need to be restrained and take a more stepping-stone approach to regulation. The encouragement of innovation will drive legislation in the right direction. But I think if you overlegislate and don't allow the route for innovation, it's got the risk of being doomed to failure. I think that innovation and legislation need to be hand in glove, and I'm not convinced that that's happening at the moment.

So, in terms of what you spoke about earlier, that's happening in Scotland, those sorts of incubation units, where they're looking at innovation, and you've cited wool, and other fabrics that I can't remember, as a possibility for driving energy efficiency, working alongside Swansea, for example—you've got that wonderful university and you're going to have a training camp. The outcomes of some of that should then influence legislation rather than necessarily the other way around, is that what you're saying?

Yes, I think you should influence legislation in the right direction but not enforce unduly at the moment because there have been certain examples where legislation has been enforced, where an expensive piece of equipment to meet a carbon target has been installed, possibly within a school, or within a house, and because of the cultural nature of the occupant—be it a lack of education or understanding—that technology hasn't been used to its fullest extent and is very often turned off because of the ease of, 'Let's put the gas boiler on now,' because that is instantaneous, whereas, possibly, a ground-source heating system takes a longer period to get to its ambient temperature and doesn't give us the comfort that we need. But it's a behavioural/cultural thing that we need to educate the occupants of a building on how to get the best from that building.

Similarly, we have to work with the planners to instil in them that every sustainable building should be south facing, whereas, possibly, a planner will think—. I'll give an example: in one recent project, the planners have turned around to say, 'Because of street scene, we'd prefer the orientation to be done in a certain way', and that is not south facing, so any emerging technology that you're putting within the building, it's like walking uphill. You've got to try and embrace what nature gives you and give it the best chance of success.

Okay, so we need to bring in the planning and some skill sets there, use the skill sets from the universities, and bring our legislation together. But the problem is that seems that's, possibly, going to take an awful long time, and I think—

But we have got the ability through the innovative funding that Welsh Government is making available to RSLs—we have got the availability now to make small steps, and the real benefit of that is that that funding as well is going to help analysis of the construction cost and the cost in use. Because, very often, especially the national house builder has no massive interest in cost in use, it's about margin, it's about return to shareholders, whereas the RSL, in fairness, has an appetite towards reducing the cost in use for their tenants.

Thank you.

Simon.

Yes. We do recognise that there is a gap in some of the skills and the training that is provided, both for the installer and also for those who regulate buildings. So, looking at building inspectors and building control, and ensuring that those are adequately upskilled to ensure that some of the energy efficiency measures are actually met—those ambitions are met. Because there is a potential gap in skills and the training that is currently being provided.

I think if you mention skills and training, it's about when you start, it's the procurement and understanding what's entailed in that before giving out the contract to the capable contractor. It's clients, building control, planning, and then you come into apprenticeships—that they get the right training for new technology. So, it's the whole family. It's your refurbishment projects and maintenance, and you've got facilities management, when you hand over a new building, as you've done, Owain, the people who you leave it entrusted to haven't had the right training or don't have the right capabilities. So, there's a huge learning and cultural change needed.

Yes. It's the whole process right from design and specification, right through to the end user, and all of those in between. There's obviously a cultural issue around the consumer understanding, but it's right from being client led, and for the client to understand actually what they are requesting.

I'm not sure we've covered the point of the actual formal connections between what the employers need and what the training bodies are now providing, and how those links are being strengthened to ensure that they're relevant skills and that we're responding to the actual demands of those who are building houses.

As has previously been mentioned, Qualifications Wales has just undertaken a review of construction and the built environment qualifications and the qualifications systems. The report and its recommendations are out for consultation at the moment. CITB are encouraging all construction companies, and as a body ourselves, we will be responding to those recommendations, which will go to Welsh Government, to hopefully inform some of the changes that will be required to ensure that the industry has sufficient choice in qualifications and to ensure that those actually meet the needs of the industry, going further. So, it's looking at things like changing the modules in current construction apprenticeship frameworks to ensure that they cover both traditional and new skills.

I think what's pleasing from our end, Owain, is that it's nice to be asked, as an SME apprenticeship representative, really. I think there's a heck of a lot of good work. I think we've got good foundations in Wales, especially in south-west Wales. We've got the largest shared apprenticeship scheme in the UK, with eight trades there. When we started in 2007, we had two trades, and we've developed technical this year. We've got 14 females in our scheme. So, I think it'll be a chance. We want to try and pilot things within the region in partnership with TRJ, Cyfle, CITB and Construction Wales Innovation Centre and with our local regional colleges. We've got five regional colleges and we engage with them all and we've got two universities on our patches. I think our collaboration is excellent, and I think there's a lot of good work. I think we've got an opportunity to entrust the industry with a bit of innovative cash, really, I think, Owain. Don't send it all down to, maybe, the higher end. I think if industry has an opportunity, invest in industry and some of the schemes we've got and the lessons that we've learnt over the years, too, especially—well, I think we've got a good collaborative agenda.

I think with a part-investment model, the industry is more than willing. There's a lot of enthusiasm—and I hope you've seen some of that this morning—to deliver low-carbon homes, and just a low-carbon approach to building in its totality, not just homes. With part investment, we could be looking at some innovative projects and looking to create a classroom on site. I think that's where we've got to—. Don't try to simulate the construction in a college. You have to do a certain amount in college, but certainly, the industry has an appetite to take the activity onto site and get the young person building a home, practically building a home—so long as we can deal with the risks of health and safety, which we're all tied up with. But if we can deal with that, there are real opportunities, I think, to work collaboratively across the board to deliver something real.

Okay. Joyce.

I think you've more or less answered my question, but are low-carbon skills being integrated, currently, into apprenticeships in Wales, and has there been any demand for those?

[Inaudible.]—low carbon. I'll chuck a cheeky one in, really. We've sent 30 apprentices to Kachumbala over the last two years. We built a maternity ward with indigenous people there. Their skill levels were good. If you're on about low carbon, all the local people walked to site; there wasn't one skip there; the murrum and the bricks were made from the murrum from the ground, with a bit of cement; everything was sourced locally; and it was a great learning tool. I think if we can do that and learn off other countries too—. We haven't got the answers, but it's nice that we can test our young people, and if you saw their enthusiasm coming back and what they've learnt, I think it's, 'Let's challenge the system,' really, as we've done. That scheme has been successful, and I think it's gone into Constructing Excellence now from the low-carbon point, I think. And there was no waste on site either. So, I think we can learn. So, we are testing the system. Can we bring good practices from other places and learn off others, too, Owain? And I think it's blinkers off for us, I think.

We've talked about innovation, but a lot of construction is simplicity done well, in the small details that people have got wrong in the past, and it's just doing a lot of what's been done many years ago. I've seen a few cycles within construction, but sometimes, we need to go back to what we used to do, but just take a different approach to it and do it better. It's not all cutting edge.

I did meet them. I did meet those very, very enthusiastic people, and I followed them all the way through that project. In a way, that's, I suppose, what this is about. It's how we can use materials that we have at our disposal, albeit it may be in a slightly different way, and teach people to innovate with that. And I suppose, really, that is the summation. But how we then push that forward to a scale that will make a difference, and that's what we're really charged with here: how we can do all of that, but to a scale that might make a difference.

That is the challenge, but I think it's got to be small steps before we can take long strides.

Well, can I thank you very much for coming along today? I certainly found it very informative, and it will be very helpful for the final report we produce. They will produce a transcript of it. Can I urge you to check though it? If you're anything like me, who turns away every now again, sometimes they miss the occasional word, so I would urge you to check that some words haven't gone missing. Thank you.

Can I move a motion under Standing Order 17.42 to resolve to exclude the public from item 6 of this meeting? Thank you.