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Following extensive industry consultation and a skills needs assessment, the three key skills challenges facing the industry have been identified:

Improving business performance

The Egan Review of the industry – Rethinking Construction – concluded the industry as a whole needed to improve its performance significantly in such areas as safety, productivity and customer satisfaction.

The SSA will address this by:

• Increasing the number of companies investing in training – with a four-fold increase in the number of companies with a training plan and Investors in People accreditation.
• Developing management and leadership skills – with £2m a year in funding.
• Supporting lifelong learning including an expansion of Approved Graduate Training schemes and continuous personal development programmes.
• Research on skills – with a Skills and Productivity Observatory.

With extensive subcontracting construction is the second highest industry in terms of workforce represented by SMEs and self-employment (more than 80%).

Self-employment is particularly high in the main craft trades.

With this structure, the majority of site workers have entered the industry through informal routes and temporary work opportunities. As a result the industry has a low proportion of its workforce qualified.

This SSA will address this by:

• Intensifying and widening the industry's Qualifying the Workforce Initiative – with a doubling to more than 1 million workers covered by "licence to practice" arrangements.
• Developing flexible training and qualification structures for specialist occupations.
• Assisting the effective integration of migrant workers – including meeting English language requirements.

The industry has not generally had a professional image and has suffered from a "cowboy" reputation. With many different subsectors – housebuilding, civil works, commercial construction and professional consultancies – as well as many specialist subcontractors and professions, industry recruitment efforts have been fragmented.

Applications for construction-related degree courses declined by 40% between 1994 and 2003 and applications for apprenticeships from females and visible ethnic minorities have remained at low levels. The prevalence of self-employment has also restricted numbers of apprenticeships. With self-employment in the main craft trades averaging 70% in London and southern England it is difficult to place one or two apprentices per 100 workers, compared with six to seven per 100 in Scotland and the northern England.

The SSA will address this by:

• Improving understanding of the career opportunities in construction.
• Increasing apprentice completions and widening opportunities for on-site practice – increasing annual completions from 3000 to 13,000.
• Promoting diversity through local employment and training projects – such as Sustainable Communities projects.
• Increasing quality applications for construction-related degree courses – with £1m of collaborative employer sponsorship.