Linda Clarke and Melahat Sahin-Dikmen show how two aspects of the Just Transition combine
European Union (EU) 2020 plans to reduce CO2 emissions and increase the use of renewable energy target the construction sector, responsible for 40% of end use emissions in Europe. The European Energy Performance of Buildings Directive (EPBD) requires that by December 2020 all new buildings are nearly zero energy building (NZEB), through airtight envelopes and renewables. On the basis of the Directive, Britain has developed its current approach toward energy efficiency requirements in building regulations and Clean Growth. The Committee on Climate Change has also just published its report UK housing: Fit for the future? In Scotland, improving the energy efficiency of buildings is a key part of the Scottish government’s Climate Change Plan (2018-2032) and the Energy Efficient Scotland Programme sets out a route map towards zero emissions from buildings, an 80% overall reduction by 2050, and the eradication of fuel poverty.
NZEB has major implications for the construction industry. The European Commission’s extensive Build-Up Skills programme (2010-2017) highlighted the need for workers to have higher technical know-how and a deeper theoretical understanding of energy efficiency and of the whole building process rather than specialisation in specific aspects of construction. On site, the work process needs to be well co-ordinated, calling for planning and communication skills and greater cross-occupational collaboration. These changes imply a transformation of vocational education and training (VET). The employment implications are similarly momentous; transitioning to low energy construction (LEC), particularly through retro-fitting the existing stock, will create employment and lead to changes in existing occupational profiles and the emergence of new specialisations.
Considering the state of employment and VET in construction in Britain/Scotland, the NZEB strategy appears detached from reality. The construction industry has never been so fragmented or its VET system in such a crisis. Construction employment in Britain in 2017 stood at 2.29m, though 49% (1.12m) of construction workers came under the Construction Industry Scheme (CIS), opposed by unions as the majority on it are regarded as ‘bogus’ self-employed. Construction employment is concentrated in London and the South East (29%) with Scotland contributing only 10%. The number of construction firms is the highest on record, at 314,590, the majority being small or micro-firms and concentrated in London and the South East, with only 6% in Scotland. At the same time, new construction insolvencies have increased – equating to 2,719 construction firms in 2017.
Such fragmentation implies the erosion of any work-based training infrastructure as the self-employed are in no position to train and small firms may not have the capacity or cover the range of activities needed. The number of first-year construction trainees in Britain is consequently extremely low, at 15,800 in 2016/17, a third of the figure ten years previously, with the highest proportion in Scotland (19%) and the lowest in London and the South East. Altogether, there were 2,247 level 2 apprentices and 774 Level 3, approximately one for every 700 workers! In terms of quality, construction VET falls short of NZEB requirements, focussed on imparting technical skills rather than providing the broad knowledge base, skills and competences needed. Much VET for LEC is fragmented, short and task specific, though there are some high level courses targeting supervisors, managers and construction professionals. Our European-wide research has shown that, where VET systems are better resourced, co-ordinated, comprehensive and regulated, construction trainees receive the broad education best suited to developing the workforce needed for NZEB. Furthermore, extensive subcontracting and self-employment, together with insecure employment practices, are at odds with the cross-occupational collaboration, and co-ordinated work organisation needed for achieving the high standards required. 
Whilst significant VET for LEC initiatives exist, the employment practices that jeopardise anticipated energy efficiency gains have to be addressed for NZEB to be successful. One attempt to improve work and employment conditions is through the Unite Scotland Construction Charter, signed by a number of Scottish local authorities (like Renfrewshire, Perth, North Ayrshire, North Lanarkshire, Inverclyde, and Dundee City Council). This includes clauses on direct labour, union representation and collaboration, appropriate skills and qualifications, developing training opportunities, compliance with collective agreements, and fair and transparent recruitment. Another important example is City Building (Glasgow), a model of inclusive, direct employment and high quality training, representing an alternative approach to low energy public building production.
City Building (Glasgow) began in 2006 as an Arms-Length External Organisation (ALEO) of Glasgow City Council, springing from the original building department or Direct Labour Organisation (DLO) of the local authority. Glasgow City Council and the Wheatley Housing Group have jointly owned it since 2017 and run it as a social enterprise not driven by profit. All 2,200 staff are direct, permanent employees, many over a long period, and provided with continuing training and development opportunities. It is a successful operation of construction and maintenance of public works such as social housing, care homes and schools, homeless hostels and recently high profile schemes (e.g. for the Commonwealth Games), making a substantial contribution to the Council. The accredited Scottish Vocational Qualifications Level 3 Apprenticeship scheme delivered at its own Queenslie Training Centre is a comprehensive, four-year programme, with a diverse intake of about 60 apprentices a year – a quarter of female construction apprentices in Scotland train here – and high completion rates. The programme covers LEC (e.g. insulation, installation of renewable technologies) and is extremely popular, renowned for the all-round care provided to apprentices, including substantial on-site practice, support plans for those with difficult personal circumstances and post-training employment opportunities, with 80% staying on as employees.
City Building’s growing number of LEC schemes contribute to the Scottish Government’s ambitions to reduce carbon emissions and tackle fuel poverty. Social housing schemes are built to varying standards of energy efficiency (e.g. Ecohomes Level 4 and Passivhaus), including the high profile Glasgow House, with some delivering two-thirds reduction in energy costs. One project is the district heating network installation in Hillpark Drive, the first large-scale, off-grid district heating installation, utilizing air source heat pump as the primary heat source to 350 properties, part funded by the British and Scottish governments. Fuel bills could reduce to as little as 60p a week, down from up to £100, directly tackling fuel poverty. Staff and apprentices train to carry out the maintenance of the energy centre and heat interface units in every flat. Collaboration with the Council’s in-house team of architects, a comprehensive training programme, and direct employment of the workforce, combined with the practice of monitoring subcontractors through a framework agreement – which sets employment and quality standards (e.g. locally sourced materials, apprenticeships) – provide a favourable set up for meeting energy efficiency standards.
The community embeddedness of City Building is unique. Its manufacturing division, RSBi, taken over from Glasgow City Council in 1997 and with substantial investment to improve its production facilities, is equipped to produce UPVC windows and doors, timber kits, kitchen and bedroom furnishings for City Building and external customers. It is one of the largest supported manufacturing businesses in Europe, employing 270 people, 60% of whom have a disability or disadvantage, and giving access to training and development opportunities.
The involvement of unions underpins this strong social ethos; where nationally the construction unionisation rate is 19%, with City Building it is nearly 100%. The Joint Trade Union Council includes representatives from UNITE, UNISON and Community and actively engages with the management. Indeed, City Building builds on a long tradition, tracing its origins back to Glasgow Corporation’s DLO, set up in 1921 because of the rapidly increasing prices of houses built by private contractors. By the end of WW2, it was the largest in Britain, employing 5,522 and responsible for building up to 5,000 houses at any one time, with schemes varying from between 30 to 2,000 houses. Its size gave advantages of scale from the bulk purchase of materials, and, in addition, the DLO produced joinery, had a fully equipped pre-casting factory, operated a quarry for the production of freestone bottoming, and had a large mechanical plant section. In 1977, before it came under concerted attack from the Thatcher government, the DLO still employed 5,040 and had an annual turnover of £25.4 million.
The challenges of housing shortages and fuel poverty call for a return to the public management of public building construction and energy supply, and to DLOs. The severe consequences of outsourcing public works illustrated by the collapse of Carillion and the Grenfell tragedy, the lack of investment in VET, and labour market deregulation have resulted in the variable quality and standards of public sector buildings. The transition to green construction cannot just be a question of meeting technical standards but needs to be part of a radical transformation of VET and employment conditions. City Building provides an example of how a labour centred alternative to technically oriented green construction policies can be realised.
Linda Clarke is a professor of European Industrial Relations and Melahat Sahin-Dikmen is a Research Fellow, both at the University of Westminster. This article draws upon two research projects.