James Wates seems pretty relaxed considering he’s the leader of a major industry organisation with an uncertain future.
The CITB, which he chairs, faces an interesting year. On the one hand it is preparing to celebrate its 50th anniversary in 2014; on the other it is in the midst of a triennial review by the government that will decide whether there is still a need for the organisation at all.
Mr Wates seems confident that the reason for the training board’s longevity and the major factor that will secure its future are one and the same: it remains relevant.
“CITB survived Margaret Thatcher’s disposal of the ITBs because the industry lobbied hard to keep CITB – it believed in it as a mechanism. I think that’s still as relevant today as it was in the 80s.
“I don’t get a feeling BIS is 100 per cent saying this is a great thing, we’ve got to keep it”
“The industry recognises the importance of training and has a concern that if we didn’t have the set-up we’ve got, there would be those who trained and those who didn’t, as indeed there are today, but at least those who don’t train do pay for the training that’s carried out.”
Without the CITB performing this function, there would be more talent poaching, leading to greater salary escalation and skills shortages, he adds.
All non-departmental public bodies that survived the government’s 2010 ‘bonfire of the quangos’ face triennial reviews, which are carried out in two stages by the relevant government department, in this case Business, Innovation and Skills.
The first stage decides whether there is a ‘continuing need’ for the organisation. If the answer is yes, the second phase considers whether its governance arrangements are up to scratch.
In the CITB’s case, the circumstances are a little unusual because the trade board has already stated that it wants to change its governance arrangements and now has to wait until the review is largely complete before it can do so.
“It makes it difficult to sell a compelling proposition to someone when they might be three months into the job and yet you’re not there anymore”
After a turbulent 12 months that saw the sudden departure of its previous chief executive Mar Farrar in May, the arrival of an interim, William Burton, who will remain in post until the end of the review, and the start of a process to recruit a permanent replacement, the review comes at a time of flux.
The fact that the first phase has taken BIS longer than it should have done prolongs the uncertainty. Mr Wates says he’s not unduly worried about the outcome, but he is frustrated about the pace.
“I don’t get a feeling they’re gunning for us; I don’t get a feeling they’re 100 per cent saying this is a great thing, we’ve got to keep it,” he says.
“We’ve got certainty in so far as we’ve had very good feedback from surveys we did on the industry. That’s always encouraging, when people who pay our levy, our stakeholders, really want to keep us.
“And I think that would be part of any conversation one would have with BIS if they started to look at something different.”
The original programme was to have the first phase completed by Christmas 2013, a new chief executive announced in January 2014 and the second phase finished by March.
It’s now looking like phase one won’t be completed until March and phase two will continue until the middle of the year.
“There are frustrations,” Mr Wates says. “It takes a lot of effort to get involved in these things. People are disrupted from their day job.”
“We wanted one in reserve because of the BIS picture. We needed to have someone else in our back pocket”
More significant, however, is the knock-on effect on the appointment of a permanent chief executive.
Mr Wates says it is difficult to sell a compelling proposition to a new chief executive when they might be three months into the job and find the CITB is “not there anymore. It’s an added complication”.
It sounds complicated enough to start with: the board (the one CITB has already proposed replacing in due course) is responsible for the appointment, but BIS has ‘oversight’.
Who’s on the list?
As a result, when I ask how many candidates remain under consideration, Mr Wates’ answer is a little confounding.
“We’ve been through a very thorough process with Hays, who came up with a good long list. We then got down to a very robust shortlist and the nominations committee interviewed six candidates, of which we got down to two/three preferred candidates that we are in discussion with.”
“Is the business of CITB to be the answer to every maiden’s prayer in the industry?”
Two/three? “We wanted one in reserve because of the BIS picture. We needed to have someone else in our back pocket.”
And the candidates? Mr Wates won’t say if one of them is interim incumbent William Burton, who by all accounts has gone down very well at the CITB and externally.
But he will tell me that they are all in work and are from outside the construction industry. All three? “Yes.”
The CITB will need to discuss the appointment with BIS and it’s not looking imminent. However, the CITB has had “clearance” from BIS to progress its proposed changes to the board while the review continues.
The plan is to overhaul the board, reducing it from 21 industry representatives to eight people who are “business-focused” and will “really bring challenge”.
Industry representatives will have a role on a newly created council encompassing a broader mix of stakeholders. “We might even be brave enough to have a learner on that council,” Mr Wates says.
“The industry is becoming less macho, less male-dominated, but that takes time to work through”
Its purpose will be “to get the bigger picture feeding back into the board” but to keep vested interests away from the table. The board itself will be purely strategic.
Over the next three years, we are likely to see a completely new set of faces. “It is going to be a different skills set to the one we currently have.”
James Wates: Roles
Chairman – Wates Group
Chairman – CITB
Chairman – UK Contractors Group
Chairman – Prince’s Trust Construction & Business Services Leadership Group
Vice-chairman – CBI construction council
Commissioner – UK Commission for Employment and Skills
Trustee – Building Research Establishment
Trustee – College of Estate Management
The new board will have questions to answer, Mr Wates says. “Is the business of CITB to be the answer to every maiden’s prayer in the industry? Or is it to deliver the highest quality levy and grant distribution in the furtherance of training and skills for the industry?”
Mr Wates himself seems ambivalent about the answers to some of these questions, or certainly keen not to pre-empt the future board.
He’s also a little vague on what the CITB’s 50th anniversary celebrations might consist of. “We have many plans afoot… there are some pretty spectacular alumni who’ve been through CITB training in their careers and we will be engaging with them.”
But he is clear that the milestone is an opportunity to look forward as much as it is to look back.
Mr Wates launches into a passionate description of all construction has to offer, taking in fantastic buildings, skilled people, the excitement of the industry, and his love of Megastructures on the Discovery Channel, which he suggests should be shown in schools.
What it comes down to is that construction is in a “war for talent” with every other industry. The place to win this war is in the classroom and the way to do it is by promoting the industry and raising its profile, he argues.
“We probably don’t look at other sectors enough. CITB needs to learn from its industry stakeholders and that then needs to be shared”
What’s less clear is what CITB’s role is in all of this. We agree that this sort of promotion is most effectively aimed at small children, not the teenagers that the CITB is more likely to work with.
So what can CITB do to help improve the industry’s image? I suggest the industry’s lack of diversity is an issue. Mr Wates says he thinks it is “the biggest challenge we face”.
Why is it such a challenge?
“I think there are probably still embedded prejudices,” he says. “I think the industry has got a lot better.
“I think the Considerate Constructors scheme has been hugely helpful in raising the image of the industry. It’s becoming less macho, less male-dominated, but that takes time to work through.”
Does the industry do enough? Does it benchmark itself against other industries, for example?
“We probably don’t look at other sectors enough,” he concedes. “Certainly from Wates’ point of view, we’ve been pushing those buttons really hard. So CITB needs to learn from its industry stakeholders and that then needs to be shared.”
“There’s a whole pool of potential talent out there and we’re blind to it. We’re not anti it, just blind to it”
It requires leadership, he says, and the CITB does have a role to play in that. I ask if the industry does enough to put itself outside of its comfort zone. Most discussions on diversity in construction focus on women, but surely the challenge must go beyond gender.
“I think it’s a very good question and one that I would say the industry probably needs to answer. I would say we probably don’t.
“There’s a whole pool of potential talent out there and we’re blind to it. We’re not anti it, we’re just blind to it. And we’ve got to be more open to the potential that’s out there.”
On the financial side, in 2012 the CITB had a levy income of £143.8m and had a surplus of £24.6m - considerably larger than had been predicted. Is 2013 likely to show similar results?
The answer is yes, the surplus will be of a similar magnitude to 2012. The CITB has collected the levy but “there hasn’t been the amount of grant claimed that one would have anticipated” and there have been “one or two other anomalies”.
CITB 2012 financials
£143.8m – Levy income
£9.8m – Amount of levy income above expectations
£24.6m – Surplus
£8.4m – Planned surplus
58.5% – Proportion of CITB’s income made up of the levy
Mr Wates says optimistically that he thinks people will be comforted by the numbers “because we’re not spending money willy nilly”. He denies that the CITB should do more to promote its grants.
That surplus “will go”, he adds, now that the industry is entering an upturn and people are starting to think more about training and a shortage of skills.
To the table
It is striking the extent to which Mr Wates is not defensive. Perhaps this is why he is appointed to represent the industry across so many different organisations (see box).
What unique quality does he bring to all these positions?
“If I can play my own little part in promoting this industry so it is seen as a go-to industry, then I’ve enjoyed it”
“I get a huge kick out of the industry,” he says. “I am absolutely passionate about it and I’m lucky to be able to see the industry from different perspectives. I think that helps in terms of seeing where overlaps are – where gaps are.”
He says his personal mission is similar to what he is trying to achieve at Wates, which is to pass on a stronger, more sustainable business to the next generation.
“If I can play my own little part in promoting this industry so it is seen as a go-to industry, one that delivers what the country needs and can offer fulfilling careers to people, a sustainable industry that does the right things by people and actually makes the environment in which we live a slightly better place, then I’ve enjoyed it and I’ve got something back and been able to put something in.”
That, presumably, is how you remain relatively relaxed while the future of the organisation you’re chair of remains up in the air.