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Publication - Report

Community benefits in public procurement

Published: 19 Feb 2008
Part of:
Public sector
ISBN:
9780755956128

This report presents the findings of a pilot programme which was intended to promote the use of 'community benefit'.

82 page PDF

600.5kB

82 page PDF

600.5kB

Contents
Community benefits in public procurement
APPENDIX 1: -Glasgow Housing Association ( GHA) Case Study

82 page PDF

600.5kB

APPENDIX 1: -Glasgow Housing Association ( GHA) Case Study

A1.1 Contract Arrangements

GHA has adopted a suite of procurement contracts. These include:

  • a GHA Framework contract (bespoke)
  • PPC (Scotland) 2000 partnering contract
  • GHA Project Partnering contract (bespoke)
  • Sectional Commencement Agreements (setting out the project-specific requirements under PPC 2000).

The suite is necessary to implement an approach that has three core features:

  • a 'framework approach': a constructor is selected for aprogramme of work but the volumes and detailed requirements are agreed as a second stage through the Sectional Commencement Agreement;
  • a 'partnering approach': the constructor and the client, GHA, work together on the needs and the detail of what will be delivered so as to achieve best quality and value for money;
  • a 'multi-partner approach': there are a number of partner constructors delivering the same type of work and these are required to work in a collaborative way (under the GHA Partnering contract).

At present the employment and training requirements are included in two of the contract documents. Section 7.6 of the standard PPC(S) 2000 partnering contract states:

"The Partnering Team members shall implement together and individually such employment and training initiatives as are described in the Partnering Documents or otherwise agreed between them."

The GHA Partnering Agreement includes the requirements as set out in the Invitation to Tender, and the Employment and Training Method Statement submitted by the contractor. Although the latter was for a fixed number of units ( e.g. 2000 doors to flats or kitchen and bathroom re-fits) and the Partnering Agreement does not specify this or any other number of units, the commitments and percentages set outin the Method Statement are expected to apply to the volumes set out in each Sectional Commencement Agreement.

At present there is no reference to employment and training requirements in either the Framework contract or the Sectional Commencement Agreement. Both documents provide the opportunity to include key performance indicators ( KPIs) for new entrant employment and training, and internal discussions are ongoing about what should be included with a focus on clearly measurable KPIs e.g. the percentage of training weeks and the timely and accurate completion of monitoring forms.

Under the 'partnering' approach it is expected that the client and the constructors will work together to achieve the aims of the contract, including the wider Community Benefits like targeted recruitment and training. However, under the 'framework' approach the best contractors can expect to be awarded additional volumes and projects, and the less satisfactory contractors may obtain less work. The 'framework' approach uses performance against the quality KPIs as leverage on the partner contractors. The inclusion of new entrant employment and training KPIs in the Framework Agreement or the Sectional Commencement Agreement would provide a legal basis for taking each contractor's performance on these requirements into account in deciding the allocation of work. 52

A1.2 The Procurement Process

The employment and training requirements were incorporated in each stage of the procurement process, including the selection of the contractors to be invited to tender and the award of the contract. This is summarised in Table 1.

Table 1 -Reference to Employment & Training inthe Procurement Process

Procurement Activity

Reference to Employment & Training

Official Notice ( OJEU)

The following text was included in II 1.6 Description/object of the contract.

Under this contract/these contracts, the contractor/supplier will be required to support the awarding authority's economic and social regeneration objectives. Accordingly contract performance conditions may relate in particular to social and environmental considerations.

Contractors' Conference

For each contract or group of contracts a contractors' conference was held. This included apresentation from GHA and SEG 53 on the employment and training requirements and opportunities to ask questions. A leaflet setting out the objectives and contact information forlabour and training supply organisations was provided at each conference.

Appraisal Questionnaire ( PQQ)

Information was requested on existing apprenticeship and training activity; recruitment and training of young people; adult returners and the unemployed; willingness to invest in training; the existence of contract monitoring arrangements (for training); and the name and position of the person responsible for training in the Company.

Selection of Tender List

A scoring framework was used to assess the responses to the questions in the Questionnaire.

Invitation to Tender (Specification)

Bidders had to submit an Employment and Training Method Statement with their tender setting out how they would deliver:

  • every vacancy (including those with subcontractors) to be notified to agencies named by GHA
  • 10% of person-weeks delivered by new entrants engaged in a training programme agreed by GHA 54
  • the equivalent of 5% of person weeks to be available for unwaged work experience placements
  • the provision of records for monitoring and verification purposes, including compliance with the Data Protection Act
  • provision of reports on performance against stated KPIs.
  • The above had to be delivered at no cost to GHA: the contractor had to obtain resources from other sources ( e.g. SEG) or through productive work. Contractors also have to take part in a partnership training initiative.
Selection and Award GHA's Neighbourhood Renewal Team developed a scoring framework for the Method Statements. This score represented between 5 and 12.5% of the 'quality' score, 55 so typically between 1.5% and 3% of the overall scoring framework (on a 30:70 quality/price ratio).

Contract Conditions

Employment and Training requirements included in two of the four documents that make up the suite of contracts.

A1.3 Scoring the Employment & Training Elements

As can be seen from Table 1 there are two procurement activities where responses from potential contractors need to be evaluated: the response to the Appraisal Questionnaire (at Pre-Qualification stage) and then the Employment and Training Method Statement. In each case the response from the contractors was scored by members of GHA's Regeneration Team with experience of construction training and an understanding of the needs of the target communities. In line with other elements of the contractors' responses this was done through a rigorous process, with the Team members developing an appropriate scoring framework. This was a learning process that was quality controlled by several officers test-scoring some bids, cross-checking the results, discussing discrepancies and then amending the scoring framework prior to undertaking the first 'proper' scoring processes.

The employment and training questions were allocated 10% of the available score for the Appraisal Questionnaire. 56 This is significant as it reduces the chances of a contractor that has little experience of targeted recruitment and training ( TR&T) being included in the list of firms invited to tender for the work.

Table 2 Worked Example of a Scoring Framework for Appraisal Questionnaire

Question

(a) Scores (1-10)

(b) Scores Weight

(a x b) Scoring Possible

(a x b) Scoring Actual

Comments

1 Apprenticeships and training including up-skilling

7

5

50

35

2 How many employees do you train each year

8

3

30

24

3 Experience of local labour and employment initiatives 57

2

5

50

10

4 Are you prepared to invest in training programmes

6

4

40

24

5 Do you have monitoring systems in place

0

3

30

0

Total

200

93

Scoring

Possible

Actual

%

20

9.3

46.5

The overall scores are ranked to produce the list of firms that will be invited to tender.

A critical part of the above process is to agree what constitutes a good or a poor response. This was done using the following guidance.

Notes - Information considered during scoring
Q1 -Number and type of apprenticeships, different types oftraining programmes, examples of employee development.
Q2 -Total and % number of employee's trained each year.
Q3 -Information on previous experience of delivering local labour and how it was delivered, client groups receiving training.
Q4 -Type and level of investment.
Q5 Type of monitoring information - does it seem robust.
Q6 Named person for job training.

Definition of rating 58
0 Not mentioned
1-3 Mentioned but unsatisfactory detail
4-6 Reasonable detail
7-9 Good detail
10 Exceptional detail

Table 3 Analysis of Appraisal Questionnaire ( PQQ) Returns - 13 works packages

Contract

PQQs

Top 10 Submissions

Bottom 10 Submissions

Submitted

Average Overall Score

Average Training Score

%

Average Overall Score

Average Training Score

%

Works 1

41

167.7

19.3

11.5

49.2

4.0

8.1

Works 2

34

159.7

10.7

6.7

83.0

4.4

5.3

Works 3

35

156.7

10.2

6.5

66.5

4.2

6.3

Works 4

33

163.7

17.6

10.8

62.2

4.2

6.8

Works 5

28

160.9

17.0

10.6

55.5

2.0

3.6

Works 6

33

147.3

16.0

10.9

29.0

3.1

10.9

Works 7

35

152.1

18.9

12.4

35.4

5.5

15.5

Works 8

14

115.5

12.0

7.7

78.4

7.6

9.9

Works 9

15

115.6

12.3

10.6

75.9

7.6

10.0

Works 10

14

116.5

10.2

8.8

72.8

6.0

8.2

Works 11

6

137.0

16.0

11.7

44.3

3.6

8.1

Works 12

31

155.5

17.6

11.3

38.6

3.9

10.1

Works 14

21

133.3

16.5

12.4

81.6

10.2

12.5

Total/Average

340

144.7

14.9

10.3

66.3

5.1

8.6

Notes: Top and bottom 10 are based on the overall scores. For works 11 top and bottom 3 were used
Overall score is out of a maximum of 200 and the average training score out of 20.
% = average training score as a % of average overall score

Table 3 sets out a comparison between the overall scores for the 340 Appraisal Questionnaires submitted to GHA (across 13 works packages) and the scores for the training questions for the top 10 and bottom 10 submissions based on the overall scores. 59 This demonstrates that the top 10 submissions also tended to score well above the bottom 10 submissions in relation to the training questions. The margin was very great, with the top submissions scoring an average of 14.9 out of 20 and the bottom 10 an average of 5.1 out of 20

The overall scores for the top 10 submissions were marginally advanced by their responses on the training question (their responses were 10.3% of their overall score against a baseline of 10%), while the training score of the bottom 10 submissions tended to exacerbate their poor score (8.6% of their overall scores). In all of the top 10 submissions (across 13 works packages) there were 31 scores of less than 12 out of 20 (60%), but in all of the bottom 10 submissions only 11 scored more than 12 out of20.

This analysis indicates that the firms that scored highest overall also tended to score highest on the training requirements: the scores for the training questions enhanced the scores of the highest-scoring submissions and retarded the scores of the lowest-scoring submissions.

A similar process was adopted for scoring the Employment & Training Method Statements, but there were many more questions to consider (below). 60 Again, officers used guidance notes when scoring each Method Statement as away of increasing the consistency.

Table 4 Analysis of Employment & Training Method Statement Scores

Type of works

All bidders

UK Gen. Contractors

Reg. Gen. Contractors

Specialist Contractors

Highest Score

Lowest Score

No

%

No

%

No

%

No

%

%

Type

%

Type

Roofing & cladding

10

81

6

85

2

68

1

86

94

UK Gen.

53

Reg. Gen.

Doors to houses

12

79

7

81

3

79

2

71

91

UK & Reg Gen.

66

UK Spec.

Doors to flats

12

75

7

76

4

71

1

75

91

UK & Reg

49

Reg. Gen.

Kitchens & Bathrooms

12

77

9

80

3

66

93

UK Gen.

46

UK Gen.

Common areas

9

65

7

65

1

67

1

69

93

UK Gen.

9

UK Gen.

Common area improvements

10

75

6

77

3

74

1

74

92

UK Gen.

30

UK Gen.

Common areas MSF

6

72

4

68

2

81

92

Reg Gen.

74

Reg Gen.

Domestic Electrics

7

85

3

91

2

80

2

81

92

UK Gen.

74

Reg. Gen.

Environmentals

6

79

1

86

1

54

4

84

98

Specialist

54

Reg Gen.

Total/Average

84

77

51

18

15

98

Specialist

9

UK Gen.

Note: specialist contractors include both UK (4 - 27% = %) and Regional firms (11 = 73%)
Definitions: UK Gen - a general contractor working across the UK
Reg. Gen. - a general contractors working primarily in Scotland
Specialist contractor: those who primarily deliver one trade/activity

Bidders for more specialist and technical work tended to score above the average, and those for less technical work (common area improvements and environmental works) below the average of overall score of 77% (See Table 4, above), although the highest bid in each type of work scored over 90%.

It is clear that most bidders did address the Method Statement, and the majority scored over 60%: only 11 bidders (13%) scored less than this and only one failed to submit a method statement.

In most contracts the award was based on a 70/30 price/ quality ratio (on some contracts a 60/40 ratio was used). The employment and training requirements formed part of the 'quality' assessment of each tender. In most contracts the employment and training scores had a 5% weighting within the quality score: 1.5% weighting in the overall tender assessment - so the impact of a high or low score on the Method Statement would not, on its own, have a significant impact on the award of the contract. However, in at least one contract (environmental improvements), a 12.5% weighting was given so the impact could have been greater. This was because there were a smaller number of quality issues to be considered for these contracts than for most of the contracts.

Table 5 sets out a ranking of the top 10 bidders for six contracts 61 on the basis of their overall quality scores.

It then provides their ranking on the basis of their employment and training scores.

Table 5 Ranking of Bidders by Overall Quality & Employment & Training (E&T) Scores

Roofing & Cladding

Domestic Electricals

Kitchens & Bathrooms

Environment

Doors to Flats

Doors to Houses

Quality Rank

E&T Rank

Quality Rank

E&T Rank

Quality Rank

E&T Rank

Quality Rank

E&T Rank

Quality Rank

E&T Rank

Quality Rank

E&T Rank

1

4

1

1

1

1

1

1

1

1

1

1

2

1

2

4

2

4

2

4

2

3

2

5

3

9

3

3

3

2

3

2

3

2

3

3

4

2

4

7

4

6

4

6

4

5

4

4

5

6

5

2

5

5

5

5

5

4

5

2

6

3

6

5

6

7

6

7

6

7

6

7

7

8

7

6

7

9

7

9

7

8

7

6

8

5

8

3

8

3

8

6

8

9

9

7

9

13

9

13

9

11

9

8

10

10

10

8

10

8

10

12

10

11

This suggests a general pattern: as with the Appraisal Questionnaires ( PQQs), the firms scoring highest on quality bids on a wide range of scored criteria 62 also tended to submit a high-scoring employment and training method statement.

The final element of the quality assessment was an interview with each bidder. This aimed to clarify any of the quality elements of the bid in order to confirm the score and ranking of the contractors. An officer from the Regeneration Team took part in these interviews.

Since the GHA procurement process represents the largest source of data on how contractors have responded to the inclusion of recruitment and training requirements in construction contracts in the recent past. 63 It has been important to assess the impact of the approach on the achievement of value for money (VfM);

The data set out above shows a high level of competition for the contracts that included Community Benefits as part of the core requirement.

A1.4 Contract Management

The monitoring requirements are set out in a Constructor Training and Employment Monitoring Pack. This contains:

  • an overview of the monitoring arrangements
  • copies of the monitoring forms:
    • New Start Personnel Record
    • Employee leaver form
    • Quarterly Report form
  • New start definition flow-chart
  • Guidance and a Glossary of terms for completing the Quarterly Report.

This pack is sent to contractors in advance of the Partnership meeting, the gathering of contractors appointed to deliver an element of the works. It is then discussed with each individual contractor at GHA monitoring meetings that are intended to reaffirm the commitment to monitoring and to explain the format and reporting methods. Officers from the Team are subsequently available on an on-going basis to answer any queries, provide advice on completion and check submissions.

At the time of writing all contractors had completed the monitoring forms although there has been some reluctance by one contractor in relation to the personal information contained in the New Start Personnel Record.

Monitoring requirements and the key performance indicators ( KPIs) against which performance is judged should obviously be closely linked. For both it is important to establish standard and well-defined units of measurement.

In GHA the early documents referred to the number of jobs that would be created or available. However, 'a job' in the construction industry can be of short duration and so the standard measure that was adopted by GHA was the percentage of the works undertaken by the target groups. To achieve this the standard unit of measurement of a person-week 64 was adopted, but the Method Statement required a projection of both person-weeks and the number of staff required (full-time equivalents) to deliver these.

The original contracts tendered by GHA 65 were developed before the detailed monitoring arrangements were set up. They therefore determined what monitoring and data processing arrangements should be established by both the contractor and the client. This had resource implications for both parties. It was recognised that GHA would have to develop a good database to receive and process the monitoring information that would be required to properly verify the contractors' performance against the employment and training requirements.

A database has been established by GHA. However, the design of the actual monitoring arrangements (and the associated data-base) is different from that anticipated inthe early contract documents.

The system that has been established requires a personal record form for all new starts, but not for employees transferred from other sites, and the weekly record of all labour used has been replaced by a quarterly report by each contractor of the total labour used on the contract. These changes to the monitoring system reflected three factors:

  • agreement with Construction Glasgow 66 on their role ofproviding validation information to verify contractor information provided to GHA;
  • the need to prioritise the limited resources within the Regeneration Team;
  • the need to develop a workable monitoring system thatwould not be overly burdensome or complex for contractors.

However, following an external evaluation, Construction Glasgow closed in March 2006 shortly after the commencement of the first GHA contracts that included thetargeted recruitment and training requirements.

There are two important implications that arise from the changes to the monitoring system:

  • it does not provide a means of checking whether contractors and subcontractors are notifying all vacancies to the named supply agencies;
  • it does not provide a means of fully verifying the total labour engaged on the contract, a figure that is used tocalculate the percentage of new entrants which is an important KPI in the contracts.

Steps are being taken to remedy this including:

  • obtaining confirmation from GHA contract officers that the total time utilised by each contractor is in the range expected, given the volumes of work undertaken each quarter;
  • setting up new labour and trainee supply arrangements with agencies (potentially the LDCs 67 ), that can also provide confirmation of the numbers of vacancies advised by GHA contractors and the numbers of these vacancies that are offered to their clients;
  • validating Apprenticeship information provided to GHA by contractors with SEG.

Improving the robustness of the monitoring and reporting arrangements is important as there must be evidence that the TR&T conditions are being implemented both to ensure contract compliance and to ensure that these contracts are let on an equitable basis.

To further assist the monitoring and evaluation of GHA's approach to securing targeted training and employment and to support GHA's partnership with SEG, an independent Key Advisor has been appointed. 68 The commission covers a period of 15 months from November 2005 and includes:

  • providing an overview from an independent perspective, on the employment and training partnership;
  • ensuring the employment and training processes being developed are effective and offer value for money;
  • liaising with key employment and training stakeholders (including contractors);
  • preparing reports for GHA and SEG;
  • critical analysis of the employment and training process; overall effectiveness and value for money of the training interventions put in place to alleviate constructors skillsgaps.

A1.5 Outputs

Table 6 Total Labour used on PPC contracts for the period to 30th June 2006 (person-weeks)

Contract Name

Employee

New Start Apprentice
(A)
Trainee
(B)
Total New Entrants
(A + B)
% New Entrants

Electrical Rewiring - Domestic

5,109

1,333

416

91

507

9.9%

Environmentals

843

98

0

77

77

9.1%

Kitchens & Bathrooms

8,343

3,121

1,431

155

1,586

19.0%

Roofing & Cladding

6,077

1,105

655

149

804

13.2%

Total

20,372

5,657

2,502

472

2,974

14.6%

Table 6 is the output data produced by the management information system for the first six months of site operations.

The outcome of 14.6% of the person weeks delivered by new entrant trainees is well above the 10% target. Of 14 operating contracts 10 had exceeded the new trainee targets and four had underachieved - although two of these had only just started on site. There were significant differences between contractors delivering the same type of works, indicating that the approach and/or commitment of the company are important determining factors. This is highlighted in Table 7 and shows that GHA have some work to do with some contractors to ensure that they improve their performance on the training requirements.

Table 7 -Comparison of new entrant trainee outputs (% of person-weeks delivered) between types of work and contractors

Type of Work

Average

Highest

Lowest

Electrical rewiring

9.9%

23.0%

3.6%

Environmentals

9.1%

40.0%*

0%*

Kitchens and Bathrooms

19.0%

21.3%

0%*

Roofing & Cladding

13.2%

33.1%

2.6%

* These were on a low level of site activity to date

Table 8 presents the outputs to June 2006 in terms of people rather than person-weeks. This shows that the contractors recruited an additional 297 people in the period - 31% of the workforce on the sites. Of these 141 (47%) were new entrant trainees, and of the latter 79% were apprentices.

This is a very significant achievement for 6 months operation and if maintained will make an important contribution to the achievement of GHAs aims for neighbourhood renewal. Over a number of years it will also add significantly to the supply of suitably skilled labour to deliver the remainder of the GHA investment programme.

Table 8 Total Labour used on PPC contracts for the period up to 30th June 2006

Contract Name

Employee

New Start

Apprentice (A)

Trainee (B)

Total New Entrants
(A + B)

% New Entrants

Electrical Rewiring - Domestic

211

72

16

4

20

9.5%

Environmentals

54

14

0

10

10

18.5%

Kitchens & Bathrooms

386

142

59

8

67

17.4%

Roofing & Cladding

310

69

36

8

44

14.2%

Total

961

297

111

30

141

14.7%

The outcomes achieved demonstrate that many contractors have the ability to deliver the required training outcomes and are able to access external resources to achieve this. It can be expected that the targeted recruitment and training outcomes will improve still further as the 'supply-side services' of training and job-matching become more established and as GHA concentrates on bringing the low-achieving contractors up to the level of the best contractors. Using KPIs for recruitment and training in theaward of future volumes of work will assist in this.

A1.6 Initiatives - Supply-Side Support

"Prior to the submission of the supplementary Method Statement, the preferred constructors will be expected to have identified a source for any additional resources they will require to deliver the employment and training requirements, over and above the sum for management and supervision that is included in the tender sum, so that the requirements can be met with no additional costs to GHA. The preferred constructors are advised to contact Scottish Enterprise Glasgow and the CITB …… for information on relevant services and funding." 69

The requirement of the contracts is that contractors must obtain the resources to cover any additional costs they incur - over and above the management and supervision costs that are included in their overheads - to deliver the employment and training requirements. They are referred to Scottish Enterprise Glasgow ( SEG), the Construction Industry Training Board ( CITB) and (originally) Construction Glasgow as organisations that may be able to assist them. The latter was a part of SEG's Construction Skills Action Plan and was a partnership of public bodies in Glasgow 70 that aimed to provide a single point of contact for recruitment for the construction sector in Glasgow.

The provision of information on the 'supply chain' for trainees and unemployed people was important is establishing a 'level playing field' for contractors that had little knowledge of the 'supply-chain'. All contractors could access the services of these organisations.

In the period when GHA was preparing its tenders there were tensions between GHA's needs as a client - being expressed as obligations that its contractors had to fulfil - and the aims and objectives of the supply-chain organisations. These problems were resolved with a Process Map being agreed by the Chief Executives of SEG and GHA. SEG have established a bespoke programme for funding GHA contractors called Skill to Build. This has a budget of £1m - partly funded by GHA and the European Social Fund - that SEG can use to commission bespoke training required by GHA contractors. The programme is managed on a day to day basis for SEG by a local economic development company and there is a capacity to provide training for 200 long-term unemployed people (30% aged under 25 and the remained 25+). 71

At the time of writing there had been two training programmes run for GHA contractors under Skill to Build. One programme was designed with an external cladding contractor and trained 6 people to fit guttering and down pipes over a 20-week period (including some site experience). The contractors were involved in the selection of the trainees. The latter then received 20 weeks training (including some site experience) while retaining their state benefits. At the end of the training 5 of the 6 were offered employment by the contractors, and after 13 weeks all of these were still employed and some were now undertaking adult apprenticeships. A second programme was designed with an environmental works contractor, with similar outcomes.

Bespoke training programmes arise from a 'partnership meeting' with the contractors delivering each type of works, organised by GHA's Regeneration Team. This is attended by SEG's managing agent for the "Skill to Build" programme.

As a result of the decision to close Construction Glasgow there was no single point of contact for GHA contractors to advise their vacancies (as required by their contracts), and GHA lost one of the critical sources of verification of their contractors' monitoring data. GHA and SEG are taking steps to advise contractors of the replacement agencies that must be advised of all vacancies.

The problem of miss-matched timescales also affected some early SEG training initiatives developed to meet the anticipated needs of GHA contractors. Speculative training was designed and started at the request of GHA, providing opportunities for 12 kitchen-fitters and 12 external cladding operatives in anticipation of contracts commencing on site in Autumn 2005. A delayed start on site (to early 2006) meant that the promise of a job to the trainees could not be met. Glasgow City Council's Building Services department provided temporary employment for some of the trainees and valuable work experience until contractors were on site. In the end employment opportunities were secured for some trainees through existing contractors to GHA. This proved a valuable lesson that training must be linked directly to the contractors requirements, (skill level and job opportunities).

A1.7 GHA Resources

GHA has invested the following resources in incorporating the employment and training requirements in to the tendering and contract management processes:

  • Contribution to funding the Scottish Government CBIP Pilot Programme that provided access to legal and policy information, a toolkit and good practice information (£5000);
  • Additional consultancy to prepare bespoke contract documents for the employment and training requirements (approximately £5000);
  • Employment of a full-time construction intermediary and a monitoring officer 72 (approximately £100,000 over three years);
  • Significant inputs of time from the Neighbourhood Renewal Manager and Programme Co-ordinator;
  • The engagement of the external key adviser;
  • £90,000 contribution to the Skill to Build training programme.

It is anticipated that the annual operating cost of the construction employment and training activity will be in the region of £50,000 to cover the salary and on-cost of the officers involved. Over the first five years' investment of £750m it is anticipated that initiating, facilitating and monitoring the employment and training requirements will cost in the region of £400,000. This is approximately half of 1% of the development value.

A1.8 Conclusions

The approach described in this report represents the most significant pilot for the use of employment and training requirements in construction contracts that has occurred anywhere in Britain. It is significant for:

  • being incorporated at all stages of the procurement process;
  • the scale, value and range of construction works;
  • the numbers of PQQs and tenders that have included employment and training requirements;
  • the rigour with which these requirements were incorporated into the contract award process;
  • the numbers of jobs and training opportunities that are being created;
  • the potential benefits to GHA tenants and neighbourhoods.

The scoring of the Appraisal Questionnaires and Method Statements suggest that many contractors performed well in completing these documents and that the contractors that scored highly on a wide range of suitability and quality issues also scored well on the employment and training requirements.

The contractors have been required to obtain the resources they needed to meet the employment and training targets by utilising existing management and supervision, obtaining external funding ( e.g. SEG and CITB), and obtaining good productivity from the trainees. This means that the recruitment and training outputs are truly 'added-value' for GHA.

Under their Wider Action budget GHA has funded consultancy to help develop the approach, the Regeneration Team that has implemented it and support for some vocational training.

The most difficult aspect of the approach for GHA has been aligning with external agencies so that they provide the services that the GHA contractors need if they are going to fulfil their employment and training obligations. There was also a reliance on these agencies to help verify the outputs being claimed by contractors. There are two reasons for these problems:

  • external agencies are driven by their own policies, programmes and priorities: they will support GHA where this suits their priorities but cannot easily bend their activities to meet the needs of GHA or their contractors;
  • the external agencies 'geared-up' to respond to a GHA investment timetable that was then delayed for a range of reasons, leaving the supply-side agencies with insufficient demand for their services and resources - an outcome that impacts on their project delivery and planned outputs.

However, SEG have secured funding from the £25 million Construction Skills Action Plan which provides flexibility infunding new entrant opportunities and workforce development packages for GHA contractors over a seven year period.

Recruitment demand from GHA contractors still appears weak - in part because it is still quite early in the delivery programme and in part because GHA and SEG still have work to do to ensure that contractors are notifying all vacancies to the named agencies and recruiting their trainees via these agencies.

From a procurement perspective the approach has been described as having the following benefits:

  • it enables GHA to achieve its wider objectives and sustain this across the whole investment programme;
  • it has promoted joint working between the Regeneration and Procurement Teams;
  • it has given GHA access to professional advice and good practice (through the CBIP Pilot Programme and consultancy);
  • lessons learnt relating to the tendering process include:
    • definitions of qualifications required for trainees should be included in ITT;
    • give precise definition of experience sought i.e. Community Benefits, Social Inclusion vs. general Personal Development Plans for staff;
    • define quotas in terms of person weeks (also define 'person-weeks');
    • test Method Statement in house by completing and scoring;
    • Table 7 demonstrates that there is still work to do to ensure that under-performing contractors (in relation to recruitment and training) achieve their targets and start to deliver at the level of the best performing contractors. The monitoring information will allow them to do this.

Beyond this, attention should be given to how the process is delivered and monitored as GHA starts to consider the 'second stage transfer' of its operations to the neighbourhood level. There needs to be a sharing and transmission of systems and expertise, and probably the continuation of acentralised monitoring and management information function as a service to all the project development teams. Maintaining the funding for this team - at approximately £50,000 per year will be critical.

Likewise, there needs to be continuity in the provision of resources for bespoke training and job matching. The external agencies that provide the resources for these actions work within priorities and organisational structures that are subject to frequent change - relative to the long development programme that GHA has embarked upon. The Construction Skills Action Plan is an important exception to this pattern, securing £25 million for construction skills training to meet the diverse needs of contractors over a seven-year period.

In this context continuity of funding to meet the GHA training and recruitment outcomes will be achieved by a continued partnership with SEG and by ensuring that there is a demand for training and job-matching services from the construction employers engaged by GHA. As can be seen from Skill to Build, a clear demand from employers is a powerful tool in ensuring that training and employment services are designed and delivered in appropriate ways.

It should be remembered that the provision of access to supply-side agencies is required to maintain 'a level playing field' for non-local contractors that may otherwise be disadvantaged in the tendering process because they don't have knowledge of the labour market and training resources. This is important at the tendering stage to ensure compliance with the EU Procurement Directives.


Contact

Email: ceu@gov.scot