Construction Industry Training Board

Prayers – in the House of Commons at 12:46 pm on 20th March 1996.

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Photo of Henry Bellingham Henry Bellingham , North West Norfolk

I am grateful to Madam Speaker for allowing me to raise this matter today. Exactly two weeks ago, the Construction Industry Training Board announced that it planned to relocate its headquarters from Bircham Newton in my constituency to Peterborough. It also announced a comprehensive restructuring, but I shall concentrate on the relocation.

The CITB is answerable to Parliament under the Industrial Training Act 1982. The Secretary of State appoints the chairman and deputy chairman and is responsible for a number of other key matters. The CITB is one of the biggest employers in my constituency. I have always had an excellent relationship with the chairman of the board, Sir Clifford Chetwood, and the chief executive, General Ted Willmott. I have always been involved in debates in the House on the levy orders and I have been very much involved in the two reviews that have been carried out in recent years. I always felt that they trusted me. I trusted them and we worked well together.

I received no prior warning whatsoever of the announcement two weeks ago. I was not consulted and nor were the other local Members, one of whom is my right hon. Friend the Secretary of State for Education and Employment, who is responsible for the CITB. I find it extraordinary that about a month before the announcement, I had a meeting with the chief executive, who told me that, in his opinion, there was no need to worry about relocation. I entirely accept that he is not a board member, but if that is not a duff steer, I do not know what is. I have been treated with complete contempt and a fair degree of arrogance. I am very angry indeed, as are my constituents. The chief executive, General Ted Willmott, has apologised to me for the inadequacy of communications and I accepted that, but there has been no apology or anything else from the chairman, Sir Clifford Chetwood.

The CITB is important to North-West Norfolk. It has 400 employees in my constituency. Roughly 291 jobs in west Norfolk will be threatened by the relocation. That will have a large impact on a rural economy. We are not talking about King's Lynn, Fakenham or Norwich, but a remote, rural part of west Norfolk. The relocation will leave a considerable social and economic gap.

The work force is utterly appalled, as are many other organisations. In the past week, King's Lynn and West Norfolk borough council expressed its grave concern. The local chamber of commerce and Norfolk county council are in outright opposition to the relocation. At present, it remains a local issue, but I have no doubt that it will become a national issue in due course. I am pleased to see my hon. Friend the Member for Teignbridge (Mr. Nicholls) in his place. He was the Minister responsible for the CITB a few years ago. I am also pleased to see in their places some of my friends among the Opposition who feel equally strongly about the matter.

When the CITB took over the disused RAF base at Bircham Newton in 1964, it established a training operation there, but in 1985 the headquarters was moved from London at a cost of £4 million and a further £5 million was spent to turn the buildings into first-class offices. I understand from Leslie Kemp, who is one of my constituents and a former chairman of the CITB, that roughly £1 million has been spent on windows alone in the past five years.

What reasons have been given for the relocation? The reasons for such a momentous decision must presumably be fairly compelling. I examined the reasons that the CITB gave board members at its recent board meeting.

First, the CITB wants better access to industry and other organisations. It wants to be in a communications hub. That might have been an applicable 10 years ago, but in the past 10 years there have been numerous improvements to the transport infrastructure in west Norfolk. We now have an excellent electrified railway. We have had many road improvements. Next Monday, my hon. Friend the Minister for Railways and Roads will open a £24 million seven-mile dual carriageway scheme on the A47 west of King's Lynn, improving our links to the motorway network.

Secondly, the CITB cited the need for better operational efficiency and effectiveness, claiming that bringing operations together in a single modern building will allow for a reduction in management layers. There is also a need for greater integration of executive and operational staff. That may well have been the case 10 years ago, but modern office technology, faxes and e-mail greatly reduce the disadvantages of a split site.

The CITB is concerned about the availability of skilled staff and argues that a larger employment marketplace would make it easier to recruit better-quality staff, especially in accounts and information technology. That is manifestly not the case. Firms in King's Lynn such as Campbell's, Dows, Master Foods, Bespak and Porvair are all expanding and recruiting new middle managers, IT programmers and other personnel into west Norfolk. In Norwich, which is just down the road, the Norwich Union is one of the biggest employers in the country and has no problems recruiting people from local universities and colleges and bringing in people from elsewhere.

The CITB also argues the need for a change in culture. That underpinned all the arguments and the debate at the board meeting two weeks ago. It feels that only by relocating out of Norfolk will it secure that culture change. The papers provided at that meeting suggest that relocation will provide an opportunity to update the skill base by replacing staff who performed adequately in the past, but who cannot perform at the level now required to meet the CITB's operational requirements. That is an insult to my constituents and a slur on hard-working loyal people who have given their lives to the organisation.

My constituents want fewer lectures and more leadership from the chairman and chief executive, particularly when the outgoing chairman has not shown sufficient leadership. The London headquarters costs £400,000 a year and the staff who occupy it do not visit Bircham Newton anything like enough to provide the leadership that my constituents expect.

When I visited the CITB last Monday, I spoke to many constituents and staff. I saw the IT department, which has been the subject of much discussion, where I found people who were committed, motivated and hard-working. They appeared to be completely on top of their jobs. The only difficulty is that they have been unable to recruit a new systems analyst. Apparently, the post has been vacant for the past six months or so. No doubt that is a problem, but I cannot accept it as the reason for spending £6 million on moving to Peterborough.

Let me examine the alleged unsuitability of existing buildings. I mentioned that a great deal of money has been spent on them. It cost £4 million to relocate from London and more than £6 million has been spent on the offices. That is a lot of money. The buildings are spread out, but, as the CITB made clear, under the restructuring there will be 90 fewer jobs at the headquarters. The staff occupy a number of buildings at the moment, but with the restructuring they can readapt and adjust. They will have a smaller headquarters staff and, with a little imagination and common sense, a huge amount could be done to the existing buildings without having to build a new office block at Bircham.

The work environment at Bircham is preferable to that at Peterborough. If I were an ambitious, bright graduate in IT or accounts or an up-and-coming middle manager, I would rather be at Bircham Newton in a lovely part of the country and a fantastic environment, driving some five miles into work, than in some large, impersonal, plate glass tower block in Peterborough where I would have to fight my way across a dual carriageway to the sandwich bar. The CITB has overlooked the work environment and the culture at Bircham. The organisation is about providing training to the young people of this country, and Bircham is a training centre: it has the plant and equipment and it is a hive of activity. If the CITB relocates to Peterborough, it will become just another amorphous financial services organisation and corporate headquarters.

Who has conducted the review? I asked the CITB whether the buildings at Bircham had been evaluated fully. The reply was that there had been an assessment, but no proper evaluation. That says a great deal. Mr. Richard McLoughlin and Mr. Mike O'Reilly were two of the consultants who carried out the review—both of whom are former directors of Wimpey, Sir Clifford Chetwood's ex-company. It seems to be a case of jobs for the boys.

What will the move cost? According to the CITB's figures, relocation to Peterborough will cost £6 million. That compares with the £3.5 million cost of building new premises at Bircham. But I am not suggesting that the CITB should construct a new building at Bircham, because I can advance a very strong case for ensuring that the existing buildings are adapted and adjusted to provide an excellent headquarters for the operation. According to its own figures, a move to Peterborough will mean an extra annual cost of £300,000, largely in rent charges.

We must have a comprehensive evaluation of the buildings at Bircham. It is an obvious point that has not yet been considered properly. The relocation argument collapses completely when one considers the economic factors. If one examines also the qualitative or judgmental factors, one comes to the conclusion that the CITB chairman and the chief executive have had a secret agenda for a long time: to move from Bircham to another site that is more convenient for them but not necessarily for Bircham employees, few of whom travel to and from other areas.

The staff at Bircham will not trust management and the CITB. They are very concerned about the future of Bircham Newton training centre. The future of training within the CITB is presently under review and the number of staff at Bircham training centre is to decrease from 96 to 76. After all the assurances and the promises that they have been given, how can staff trust a single word that the chairman and the chief executive say? The simple fact is that they cannot.

I turn now to the conduct of the chairman and the other directors at the board meeting on 6 March. It is extraordinary that the outgoing chairman, who will stand down at the end of the month, is prepared to put to the board a momentous scheme that he will not implement. I have seen the board papers and they do not go into detail or examine fully all the options—particularly the obvious option of remaining at Bircham, which will save much money at a time when the industry is in some difficulty.

The vote at the board meeting was nine to six in favour of relocation. I am concerned that two proxy votes were disallowed. I understand that the holders of those proxy votes—to whom I have spoken at great length—were under the impression that their proxies would be valid. The CITB told them that the proxies, although usually valid only for votes on levy matters, could be used at the meeting. The two board members concerned had to attend other very important meetings and they decided not to go to the CITB meeting on 6 March because they were given absolute assurances that the proxies would be used to vote against any relocation. However, the proxies were disallowed and I want to know why.

The CITB chairman met the federations the night before the meeting and I understand that he told them that he had the full support of the Government and of the Opposition in deciding the CITB's future. It is extraordinary that the chairman did not do his homework. My hon. Friend the Minister wrote a letter to Ron Davies, the Director General of the National Specialist Contractors Council, in which he said: I can, however, give you a categorical assurance that no decision has been taken by Government about the continuation of CITB as a statutory Board after its current term ends on 31 March 1998". The chairman misled the federations.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

My hon. Friend will recall that I am the parliamentary adviser to the National Specialist Contractors Council. Therefore, will he accept my assurance that the CITB reorganisation and the relocation does not have the support of the specialist sector? He can also take it from me that that sector does not believe that it has been consulted adequately about the proposals.

Photo of Henry Bellingham Henry Bellingham , North West Norfolk

I am very interested in my hon. Friend's comments, because the Federation of Master Builders feels the same way. When the chairman, Sir Clifford Chetwood, assured the board that the relocation enjoyed the unanimous support of the federations, at best, it was a gross misrepresentation of the truth and, at worst, it was a downright lie.

To cap it all off, I gather that the board hurried to its conclusion in order to take Sir Clifford to a celebratory lunch, having effectively axed 291 jobs in my constituency. The conduct of the board meeting was absolutely shameful and Sir Clifford Chetwood—a captain and a knight of industry who has many admirers in this place and throughout the country—should be ashamed of himself. It reinforced my view, and that of many of my hon. Friends, that Sir Clifford was determined to bulldoze the decision through the board at all costs before he stood down as chairman.

I support the CITB and I shall continue to do so in future as I believe that we must have a statutory training board with a levy to provide training for our youngsters and to maintain high safety standards. I am obviously pleased that it intends to invest in new training facilities in my constituency and I have no doubt that it could have a bright future. I believe also that the changes that the CITB is making to the field service and the streamlining of the headquarters—which will be painful in any event—can be justified and sustained.

However, I cannot under any circumstances support the relocation of the headquarters away from Bircham. I visited there on Monday and I found that the decision has completely shattered morale. There is a strong chance of industrial action at Bircham. When Sir Clifford Chetwood assumed responsibility for the CITB, it was rich in reserves, had very high staff morale and was building on the excellent work of Dennis Maiden, Derek Gaulter and Leslie Kemp: it knew where it was going. Sir Clifford is now handing over an organisation where morale is at rock bottom and everything is in a complete shambles because of the uncertainty and staff bewilderment. After all, the greatest asset of any organisation—particularly a training board—is its staff.

I believe that the new chairman, Hugh Try, has his work cut out: as things stand, he must push forward the very important reforms restructuring the field service and streamlining the headquarters, while simultaneously taking on the relocation, when the federations have not been consulted properly and in the run-up to the new levy. My hon. Friend, as the Minister who will take the levy through Parliament, will be aware that it normally goes through on the basis of consensus. If he is to bring the levy to Parliament without industry consensus—there is grave danger that, if the Federation of Master Builders and the National Federation of Specialist Contractors withdraw their support, it will not have the necessary percentage—there could be a crisis of confidence.

I am deeply pessimistic about the CITB's future if the board does not reverse its relocation decision. The new chairman must tell the board that the CITB has a lot to do, that it faces big challenges and that it could have a bright future. However, he must also emphasise that, in order to secure that future, he needs the support of Ministers, all hon. Members—including Opposition Members—and employees. As things stand currently, he will not have that support and the CITB's future looks very bleak. However, he has another option: I implore Hugh Try to seize the opportunity and recommend that the board reverses that part of its decision on 6 March relating to relocation.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. Does the hon. Gentleman have permission from both the hon. Member for North-West Norfolk (Mr. Bellingham) and the Under-Secretary?

Photo of Bob Ainsworth Bob Ainsworth Opposition Whip (Commons)

I congratulate the hon. Member for North-West Norfolk (Mr. Bellingham) on obtaining the debate and on the tremendous resistance that he is putting up to the proposals on behalf of his constituents. He is not alone and I know that there is a groundswell of resistance to the proposals in his locality, which includes not only the trade unions represented at the Construction Industry Training Board—I declare at the start of my remarks that my constituency has a sponsorship arrangement with the Manufacturing Science Finance union, which is one of the trade unions represented at the CITB—but the county council, Mr. Clive Needle, the local Member of the European Parliament, and the prospective parliamentary candidate for Norwich, North—Dr. Ian Gibson. So there is a groundswell of support for the hon. Member's campaign of resistance to the proposals.

I am sure that the hon. Member for North-West Norfolk wishes to represent the people in his locality in his campaign, especially in the light of some of the very insulting and disparaging remarks that have been made about understandably sensitive matters. But resistance is growing wider, not only in the trade unions but in the federations.

The hon. Member for Teignbridge (Mr. Nicholls) mentioned the National Specialist Contractors Association, and I wish to make a point about the process that was used to bulldoze through the proposals. I understand that a dinner meeting was called the day before the board meeting, and the board was told that the affiliated organisations, including the National Specialist Contractors Association, were all unanimously in favour of the proposals. That simply is not so. The director general, Ronald Davies, has spoken about his total opposition to the proposals. At a meeting in the House the other night, Denis Maiden, the director of the Federation of Master Builders, left us in no doubt about his absolute opposition.

Given the clear evidence of a lack of objectivity in the way in which the decision was taken to move the CITB, we need, at least, a reconsideration of that decision. We are looking to the Under-Secretary to apply the maximum pressure to get that reconsideration. There are very clear indications that the process was not correct and that the board was deceived about the level of support for the proposals. It was told that the levy payers and the trade were unanimous in support, but some of the levy payers are vociferously opposed. The work force is also opposed and there is a clear case for reconsideration.

I offer my support to the hon. Member for North-West Norfolk, as will many of my hon. Friends, the trade union movement and sections of the trade, in his efforts to resist the disgraceful way in which the transfer has been proposed. The trade unions at the CITB are not opposed to changes in the structure and the costs of running the operation, but the board was given only two options—to stay exactly as it is or move the entire operation elsewhere. That is not a true reflection of the options open to the CITB and there is a clear case for reconsideration.

Photo of James Paice James Paice Parliamentary Under-Secretary (Department for Education and Employment) 1:23 pm, 20th March 1996

I am sure that the House will agree that any hon. Member would feel as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) does about something that so seriously affects his constituency. He will know of my concern for rural areas, as I represent a constituency not very far from his, and therefore of my personal empathy with the situation in which he finds himself.

The Construction Industry Training Board, as the House will know, is one of the two remaining statutory training boards, and its existence owes much to the work of my hon. Friend at the time of the review of training boards some years ago, and to the unique employment pattern of the construction industry and the support of the employers in the industry for the statutory status. The CITB is a very large business whose sole function is to promote and provide training within the construction industry. It is funded partly by a statutory levy which is approved annually by the House, and partly from income generated through training contracts. The Industrial Training Act 1982 requires that not only is the levy approved by the House, but that the annual grant scheme proposals are approved by Ministers and the annual report and accounts are laid before the House. Although the rate of the levy is normally the result of consultation and usually has the support of at least 50 per cent. of the industry, that does not have to be the case before it is put before the House. However, it would be clear to the House that if that level of support were not forthcoming from the industry I would need good reasons to proceed.

Despite the requirements of the 1982 Act, it is the responsibility of the board of the CITB to manage its affairs and control its operations. Neither I nor my right hon. Friend the Secretary of State for Education and Employment can interfere with such decisions—much as I understand the wishes of my hon. Friend and the hon. Member for Coventry, North-East (Mr. Ainsworth) that it were otherwise.

Since 1982, the CITB has been the subject of periodic reviews concerning its status. The last review was in 1993 and, due to widespread support from the industry's employer organisations for its retention, it was reconstituted for the period until March 1998. The next review will therefore commence next year, and any decisions made by the board must be in the knowledge that there can be no guarantee of the outcome of that review and therefore the future of the board's status. My hon. Friend referred to a letter I sent two or three days ago to the secretary general of the National Specialist Contractors Association on that specific subject.

My hon. Friend also referred to the handling of the decision by the board and to its announcement. My right hon. Friend the Secretary of State and I share his concerns. It is apparent that many of the federations received little notice of the proposals, and some I know are aggrieved that they did not have more time to consider the implications of the proposals. It is especially bad that no arrangements were made to communicate the decision to the staff until the following day, by which time the whole issue was in the media. That is not the standard of management that one would expect from a training organisation, which should be at the forefront of modern staff management techniques.

The House knows that the construction industry has gone through a long and painful period with a considerable amount of restructuring and reduction of overheads. It is no surprise that the CITB should do likewise, and in as much as the principle of the reorganisation is to refocus the board's work on its customers and maximise resources for training, the reorganisation is to be welcomed. I am conscious, as I go round the country, that there are many levy payers who resent the board's role, and who are unaware or unconvinced of the board's value. Any effort to concentrate on levy payers' needs will receive my wholehearted support. Equally, all levy payers—large or small—will expect the CITB to be run efficiently and effectively, and they will expect a reduction in the cost base and a concentration on front-line services. That will be the priority of the federations which comprise the bulk of the levy payers and put forward the nominations for the board. They will be primarily concerned that the levy is used to provide the best services for the needs of their members.

It is clear from my hon. Friend's speech that the relocation of the headquarters away from Bircham Newton vexes him most. It is, in my view, a separate matter to the reorganisation of the board, which I welcome, but it is for the board to decide. It must—as it did—examine the costs of relocation and any perceived benefits. Having done so and having reached a decision, it is the board's responsibility to explain it to its members and staff and convince them that it is right for the industry. The board will need to consider many issues, including the costs and benefits; the frequency with which people visit the headquarters and, therefore, the importance of the travel links, to which my hon. Friend referred; and whether better management and training could overcome the alleged cultural difficulties, to which my hon. Friend also referred.

My hon. Friend and the hon. Member for Coventry, North-East put their cases powerfully. My hon. Friend has done so not just today, but when he sought a special debate two weeks ago after the announcement. I know that my hon. Friend had meetings with the outgoing chairman and with the chairman elect, Mr. Hugh Try, in whom I have total confidence and who takes over on 1 April. If the new chairman can be persuaded by my hon. Friend to re-examine the matter and to consider my hon. Friend's representations, that is for the new chairman to decide. Whatever happens over the next few months, it is clear that there are many bridges to be mended and that there needs to be a considerable improvement in the handling of what is obviously a sensitive and important issue.