looking ahead: 2017

85 Pages·2017·1.27 MB·English

ENGINEERING CONSTRUCTION
INDUSTRY TRAINING BOARD
Report of the trustees and accounts
for the year-ended 31 December 2016
ENGINEERING CONSTRUCTION
INDUSTRY TRAINING BOARD
Report of the trustees and accounts
for the year-ended 31 December 2016
Presented to Parliament pursuant to Section 8(4) of the Industrial Training Act 1982
Ordered by the House of Commons to be printed 29 June 2017
HC 75
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CONTENTS
Chairman’s Introduction 1
Chief Executive’s Review 2
About the ECITB 4
Performance Review 2016 6
Looking Ahead 2017 19
Financial Report 24
Results for the Year 25
Commentary on Financial Results 26
Remuneration Report 30
Governance Statement 33
The Certificate and Report of the Comptroller and 40
Auditor General to the Houses of Parliament
Financial Accounts for the year ended 31 42
December 2016
Organisational Details 72
Appendices 73

CHAIRMAN’S INTRODUCTION
In a year of seismic political and
economic events, 2016 proved no
less eventful for the ECITB and the
engineering construction industry.
The economic outlook remained challenging across many parts In July 2016, the government announced plans to reform technical
of the industry. In the offshore oil and gas sector in particular, education in England, drawing on the recommendations of the
companies continued to adapt to the ‘new normal’ of lower oil prices, Sainsbury Review. As part of this plan, the government announced
with further job cuts and new exploration opportunities placed on a review into the Industrial Training Boards to report in 2017. This
hold. Elsewhere, investment remained muted and although there has been a major focus of activity for the ECITB Board and Executive
were some signs of optimism on the horizon, with new commitments Teams and will continue to be so in 2017. Its findings will be taken into
on infrastructure and a green light on nuclear new build, the short- account in the ECITB’s strategy.
term outlook at the end of the year remained difficult.
As we look to the year ahead, I am conscious that we have a great
In spite of the challenges facing industry, the need to train and deal to do. With the strong new mandate secured through our levy
upskill the workforce remains a constant and arguably, in the face consultation, the ECITB is in an excellent position to build on its
of the decision to leave the European Union, has never been more successes and continue to drive skills growth across the industry. This
important. In an industry characterised by fluctuating demand and a vital work is essential to ensure that the industry builds a secure and
mobile workforce, training budgets are often the first to be cut during sustainable workforce for the future.
a downturn. Yet industry must also be prepared for the next upturn
and without ongoing investment in people and skills, the delivery of
future projects will be put at risk.
Over the last 25 years, the ECITB has ensured training occurs
regardless of the economic climate and remains critical to driving
up skills levels across the engineering construction industry. In
2016, the ECITB responded to the challenges facing industry by Shirley Watson
consulting on a new industrial training levy proposition. This received Interim Chairman
significant backing from levy-payers across the industry. It was a
notable achievement and real vote of confidence, demonstrating the
significant value that the industry continues to place in the ECITB.
2016 also saw a number of Government policy initiatives, with
major strategic implications for the ECITB. The first of these was the
machinery of government changes announced in July 2016, which
resulted in sponsorship of the ECITB moving from the Department of
Business, Innovation and Skills to the Department for Education. This
has necessitated establishing new relationships and partnerships
within Government, a process which we will continue to build on
during 2017.
Annual Report 2016 1
CHIEF EXECUTIVE’S REVIEW
2016 saw the ECITB mark its 25th Anniversary. The fundamental The significant strength of this new mandate provided the
need for the ECITB has not disappeared and over the last 25 years the foundation of the development of a new strategy for the ECITB.
organisation has been a beacon of stability in an otherwise changing The new 3 year strategy, nested in a 10 year horizon, will enable the
skills landscape, having consistently provided industry-focused organisation to continue to provide the existing high level service
training solutions, qualifications and awards. However, we have not to industry, while also addressing skills policy initiatives from the
stood still either and 2016 saw the ECITB further evolve in response English, Scottish and Welsh governments. How we will achieve this is
to challenges within the engineering construction industry and the outlined in the ‘Looking Ahead’ section of this document.
introduction of new Government policy initiatives.
After the apprenticeship levy, the most significant skills policy
New capabilities were added including a policy team and an initiative undertaken by the UK Government in 2016 was the Post-16
enhanced labour market intelligence function, which will enable the Skills Plan, published in July. The plan outlines the Government’s
ECITB to more effectively capture emerging skills trends and become approach to reforming technical education in England, centred on
a more valued partner with national governments and industry. We the creation of a clear, dual track system of post- 16 learning. The
also undertook a thorough review of the organisation and carried overarching goals of the plan have significant implications for the
out a successful restructuring exercise to reduce the headcount, future engineering construction workforce and are to be welcomed.
streamline processes and save money. Furthermore, international
operations were de-risked and scaled down by ending training In Scotland and Wales, the current approach to apprenticeships will
provision overseas. continue, albeit with some additional initiatives. However, there
are no plans to adopt the apprenticeship reforms being enacted
The announcement of the apprenticeship levy in July 2015 prompted in England. The Scottish Government will continue to expand
a consultation exercise with the industry on the future of the its modern apprenticeship programme, as well as foundation
industrial training levy which was concluded in October 2016. An apprenticeships, which are targeted at school pupils, and higher level
overwhelming majority of levy payers confirmed their support for the graduate apprenticeships. A new Science, Technology, Engineering
ECITB. Overall, support grew by 10% from the previous consultation and Mathematics (STEM) strategy for Scotland has also been
with 78% (2014: 68%) of levy payers, representing 87% (2014: published for consultation.
76%) of the aggregate levy, confirming their support for the ECITB.
The breadth of support within the industry also increased, with Despite the ongoing challenges facing parts of the industry, the
companies from across the industry backing the proposals, including provision and cultivation of high-quality technical skills remain
those in the nuclear, subsea and renewables sectors, as well as the a necessity. Indeed, without appropriately trained workers, the
traditional ECI sectors. industry would be unable to operate. While new projects are on hold
in some sectors, it is important that companies continue to invest in
developing a pipeline of skilled workers to ensure they are ‘delivery build, which we know has enormous potential for the UK economy,
ready’. It will also be important to ensure any changes that affect skills and jobs. With budgets remaining tight, it becomes ever more
the engineering construction industry are coherent across England, important to invest in people to ensure that we have the right skills
Scotland and Wales. and people when a more sustained recovery begins.
As part of the Post-16 Skills Plan the Government announced a Our priorities for 2017 are clear and outlined in the ‘Looking Ahead’
review of the Industrial Training Boards to explore ways in which section in this year’s Trustees Report. We will continue to engage
both ITBs can further drive up skills and productivity in their closely with Government to ensure the needs of the engineering
respective industries. It will make recommendations to Government construction industry are reflected in policy making and it will be
to take effect following the current levy period. A call for evidence equally important that we can meet the government’s aspirations
is scheduled to be published in early 2017 inviting feedback from for skills in the industry. Establishing a successful labour market and
interested stakeholders, with the final report expected a few technology intelligence function will provide valuable input into
months later. The focus of the review to date has been mainly on the future plans and industry forums.
construction industry and it is likely the report will be predominantly
for the CITB. The ECITB policy team will remain closely involved with
the review until it is complete.
Engineering construction is a highly skilled industry which supports
the nation’s critical infrastructure. Throughout 2016, I was privileged
to meet many of our in-scope employers across a wide range of
sectors, with learners, stakeholders in Government and training Chris Claydon
providers. It is clear that we must continue to attract and retain Chief Executive
talent, despite often difficult trading conditions. Our graduate
retention and pre-apprentice programmes made a significant
contribution to supporting young entrants into the industry this year
and are set to continue in 2017.
2016 was difficult for the engineering construction industry in many
of our sectors, with the sharp drop in new apprenticeship starts
providing stark evidence of the challenges faced by many companies.
The outlook for 2017 looks a little better, particularly for nuclear new
ABOUT THE ECITB
Our mission:
Delivering engineering
construction excellence
through leadership
on skills.
4 ECITB
Established in 1991 the ECITB was formed in recognition of the
engineering construction industry’s vital role in the UK economy,
and the requirement for a statutory body to meet the special training
needs of the industry: an industry that is characterised by a highly
mobile labour force and where there are few incentives for individual
employers to train.
The engineering construction industry (ECI) delivers and maintains
the nation’s critical energy infrastructure, including in the oil and gas,
nuclear and renewables sectors, alongside major process industries,
such as chemicals, pharmaceuticals, food processing, water and
waste treatment. The ECITB is the skills, standards and qualifications
body with statutory responsibility for the development of the
engineering construction workforce in Great Britain. It works closely
with employers and governments to attract, develop and qualify
engineering construction personnel in a wide range of craft, technical
and professional skills and disciplines.
The ECITB’s vision is to be the leading industry authority on
engineering construction skills, working in partnership with
business and government to deliver a highly skilled workforce,
offering value by enabling industry to compete globally. This means
constantly evaluating and improving our focus, our operations, our
relationships and our governance
Charitable Activities
The ECITB is a registered charity in England (Registered Charity No.
264506), with four main areas of activity, focused on facilitating
employment, skills development and training for the industry.
APPRENTICESHIPS & CAREERS TECHNICAL PROGRAMMES
• Meeting national economic needs for skills. • Ensuring skills are retained and utilised.
• Supporting the next generation of apprentices. • Flexible training programmes.
• Industry relevant apprenticeships. • Upskilling and reskilling existing employees.
• Quality assured training.
MANAGEMENT & PROFESSIONAL AWARDS & QUALIFICATIONS
• Developing tomorrow’s managers. • Guaranteeing quality in the system.
• Comprehensive range of technical, supervisory and • Setting standards, assuring competence, developing
managerial training. VQs and accrediting and assuring training providers and
• Continuous professional development. assessment.
• The ECITB is the industry Awarding Body.
Annual Report 2016 5