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Survival and Decline of theApprenticeship System in the Australianand UK Construction IndustriesPhillip Toner

Abstract

The preservation of the apprenticeship system in the Australian constructionindustry contrasts with its decline in Britain over the last three decades. Thisdecline is conventionally ascribed to changes in industrial structure, specificallya decline in the role of the public sector, intensification of subcontracting andgrowth of self-employment. Given that the Australian construction industry hasundergone similar structural changes to those in the United Kingdom, thisdifference in outcome requires explanation. This article suggests that the con-trasting outcomes are the result of institutional differences in the organizationof the training system, employers and labour between the two countries. Theseinstitutional differences are, however, diminishing as arrangements for trainingand industrial relations in Australia are increasingly fashioned in the likeness ofthe United Kingdom.

1. Introduction

Apprenticeship training in the UK construction industry has experiencedsignificant decline over the last three decades in contrast to a comparativelyrobust training effort in Australia. Research on the long-run decline ofapprentice training in the UK construction industry identifies a principalcause as change in the industrial structure, specifically a decline in the role ofthe public sector in the industry, intensification of subcontracting and growthof self-employment (Ball 1988; Winch 1998). However, similar changes andof similar magnitude also occurred to the structure of the Australian con-struction industry. While these changes have raised the barriers to employerinvestment in training in both countries, this article suggests that the

Phillip Toner is at the Centre for Industry and Innovation Studies, University of WesternSydney, Australia.

British Journal of Industrial Relations doi: 10.1111/j.1467-8543.2008.00680.x46:3 September 2008 0007–1080 pp. 413–438

© Blackwell Publishing Ltd/London School of Economics 2008. Published by Blackwell Publishing Ltd,9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

contrasting outcomes for apprenticeships are the result of institutional dif-ferences in the organization of the training system, labour and employersbetween the two countries. Such institutional variance has moderated theeffect on apprentice training of changes in industrial structure in the case ofAustralia and exacerbated their negative impact on training in the case of theUnited Kingdom. However, recent policy developments in Australia arediminishing institutional differences with the United Kingdom with poten-tially adverse consequences for the maintenance of a traditional apprentice-ship system in Australia.

To explain the survival of the apprenticeship system in the case of theAustralian construction industry and its decline in the United Kingdom, thearticle draws on the extensive literature that has developed over the last threedecades on comparative international skill formation systems (Brown et al.2001; Culpepper and Finegold 1999; Gospel 1994, 1998). This research sug-gests that differences in national institutions governing employers, labourand training systems give rise to differential incentives and/or obligations foremployers and employees to invest in training. The establishment and sur-vival of apprenticeship systems depends on institutions such as collectiveregulation of training premised on strong employer associations and unions;occupational labour markets in which attainment of trade qualifications is arequisite for entry to key trade jobs; state regulation of industrial relationsthat supports the role of employer associations and unions and encouragesindustry-level bargaining; and state management of the labour market toachieve a balance in the supply of trade skills through domestic training andimmigration. This article argues that, historically, the UK constructionapprentice system lacked some important institutional foundations but, moreimportantly, over the last three decades supportive institutions were removedor eroded in the United Kingdom by neoliberal state policies. The Australiansystem survives, partly because of historically deeper institutional founda-tions, and also because similar neoliberal policies that undermined the UKsystem have been implemented more recently. Long-term movement in thelevel of apprenticeship training and the training rate, or ratio of the stock ofapprentices to the stock of employed tradespersons, is used in the article toassess the relative robustness of the apprentice training system in the respec-tive countries. A complicating factor in discussing the United Kingdom isthat due to progressive devolution of political authority there are someregional differences, for example, between England and Scotland, in theadministration of intermediate skills training. There is not the space to detailthese differences nor are they considered to be of sufficient weight to signifi-cantly modify the overall findings of the article.

Statistical data used in the article on structural change in the UnitedKingdom and Australian construction industries, change in union densityand trends in apprenticeship training are derived mostly from primarysources, such as the UK National Statistics Office, its antipodean equivalentand the UK Construction Industry Training Board (CITB). The brief his-torical account of the development and performance of the UK construction

414 British Journal of Industrial Relations

© Blackwell Publishing Ltd/London School of Economics 2008.

apprenticeship system is heavily influenced by the work of Gertrude Williams(1957, 1963).

The article is structured as follows. Section 2 provides a brief review of thekey themes from the research on the institutional foundations of nationalapprenticeship systems. Section 3 compares trends in construction appren-ticeship training between Australia and the United Kingdom. Section 4briefly describes the transformation in the structure of the UK and Austra-lian construction industries over the last three decades. This section alsoanalyses the key institutional differences between the two countries thatcontribute to understanding the different trajectories for apprenticeshiptraining in the two countries. It also shows how these institutional supportsin the Australian construction industry are being undermined. The implica-tions of this collapse in the supply of intermediate skills in the UK construc-tion industry for skills shortages, productivity and quality of constructionoutput are briefly outlined in the conclusion.

2. Institutional foundations of apprenticeship systems

The apprenticeship system, entailing a contract of training and employmentdesigned to impart practical and theoretical skills leading to a qualificationproviding entry to a trade occupation, has been widely interpreted as a meansof addressing market failure inherent in the provision of employer investmentin transferable training (Stevens 1996). In turn, this system depends on a setof interlocking institutional supports.

Robust apprenticeship systems rely on strong employer associations andunions that are capable of promoting multi-employer co-ordination of train-ing and enforcing employer investment in skills formation (Gospel andDruker 1998: 261–63). Employer associations and unions are required tomediate the ‘fundamental conflict between employers’ and employees’ inter-ests with respect to training. Employers’ interests tend to be short term andfirm specific; employees, in contrast, seek to acquire transferable skills ofvalue in the long term and over their working life’ (Clarke and Wall 1998:560). Co-ordination is essential to ensure that training results in qualifica-tions that are widely accepted by employers. Regulation of the content anddelivery of training by employer associations and unions is essential to ensurethat qualifications are accepted as signalling the attainment of prescribedworkplace competencies and capacity to achieve new related workplace com-petencies. This acceptance is signalled formally in industrial agreements whenvocational qualifications are used to define job classifications subject to theagreement and when qualifications are specified in firms’ job recruitment.Ongoing co-ordination is also necessary to ensure that job classifications andthe content and delivery of training are kept up to date with new technologyand evolving labour processes. Industrial agreements must prescribe wagepremia for persons investing their time in an apprenticeship. Widely acceptedqualifications embedded in standard job classifications across an industry

Australian and UK Construction Apprenticeship System 415


underpin occupational labour markets and career paths for tradespersons.Inter-firm co-operation on training arrangements lowers the costs of voca-tional training by realizing economies of scale in the development and deliv-ery of training. Multi-employer co-ordination that creates a culture oftraining overcomes ‘poaching’ of skilled workers and reduces the possibilityof wage inflation driven by skill shortages. Strong unions that can steadilyraise real wages encourage firms to maximize the productivity of labourthrough complementary capital investment and training.

The state plays a crucial role in setting the ‘rules of the game’ for indus-try bargaining by supporting employer associations, unions and industry-level agreements. The state is also crucial in creating a statutory basis forapprenticeship; typically in legislation which governs the contract ofemployment and training between the apprentice and employer. Statefinancial support of quality training infrastructure is essential, along withoccupational licensing that ties entry into key trades to the completion offormal qualifications (Brown et al. 2001; Buttler et al. 1995; Culpepper andFinegold 1999; Estevez-Abe et al. 2001; Ryan 2000; Steedman 2001). Stateregulation of international labour flows designed to achieve a balance in thesupply of trade skills through domestic training and immigration is alsocritical (Clarke et al. 2003). These interdependent institutional supportsconstitute an ‘ecology of skills’, in that provision of high-quality appren-ticeship training requires the co-ordination of all three parties (Streeck1989: 102).

While the literature on comparative apprenticeship systems emphasizes therole of institutions, laws and ethical rules of conduct in shaping and con-straining the action of the state, firms and workers, it also highlights theplasticity of these institutions over time. There have been numerous studies offailed or threatened national apprenticeship systems (Elbaum 1991; Finegold1999; Finegold and Soskice 1988; Gospel 1994; Ryan and Unwin 2001) andtheir recent renaissance (O’Connor 2006). Aside from the relative historicalweakness of the UK apprenticeship system, as highlighted by Williams (1957,1963), this article emphasizes the role of the state in weakening collectivebargaining in the United Kingdom through first ‘decentralizing’ and later‘decollectivizing’ the industrial relations systems (Howell 2005). At the sametime extensive ‘reforms’ of the vocational training system by a Conservativegovernment facilitated a de-skilling of trade occupations which, combinedwith changes in the delivery of training, reduced the confidence of employersand prospective employees in the value of trade qualifications. Union repre-sentation on training policy bodies was reduced or eliminated with a view tomaking the training system ‘employer-led’. Privatization of public-sectorentities that were formerly major employers of construction apprentices,and changes in purchasing policies of remaining public entities, reduced thecapacity of the industry to employ apprentices. The reciprocal of the with-drawal of state investment in construction activity was increased reliance onprivate capital. This intensified competition within the industry and, alongwith changes to the tax system, encouraged the growth of self-employment,



further undermining the scope for collective self-regulation and capacity ofthe industry to engage apprentices. Employers supported reduced unioninfluence and development of a short-term firm-specific training strategyunder an employer-led training system, despite the ensuing problems ofskilled labour shortages (Winch 1998). The construction unions also madestrategic mistakes in failing to recruit the rapidly expanding numbers ofself-employed and continued their traditional indifference to the content ofapprenticeship training.

Both the United Kingdom and Australia are conventionally labelled as‘liberal market economies’ (LMEs) in contrast to ‘co-ordinated marketeconomies’ (CMEs), based on measures such as comparatively low employ-ment and social protection; decentralized wage bargaining; resistance toindustry policy; high income inequality and distinct capital markets andcorporate governance (Hall and Soskice 2001). However, such broad classi-fications do not allow for important institutional differences across countriesthat share a common classification. On indicators such as the statutory basisof apprenticeship embodied in a contract of employment and training; regu-lation of apprenticeship in industrial agreements; collective union–employerdetermination of the content of training; effective enforcement of state-sanctioned occupational licensing; and delivery of quality off-the-job trainingdirectly by the public sector, the apprenticeship system in Australia, includ-ing that in the construction industry, is closer to the CME model than theLME (Culpepper and Finegold 1999). This applies in particular for keylicensed construction trades such as electricians, plumbers and builders.However, the apprenticeship system in the Australian construction industryis under threat, in part, because the system is a relatively isolatedco-ordinated market ‘island’ in a rising liberal market ‘sea’.

3. Comparing trends in training

A standard indicator of the output of an apprenticeship system is the trainingrate. It measures the extent to which an occupation is reproducing itselfthrough the domestic training system. In Australia there was a sustaineddecline in the construction industry apprentice training rate from 1993 to2002 averaging 9.9 per cent over the period (Toner 2003). This is a decline ofapproximately 15 per cent on the annual average training rate for the previ-ous two decades. As a result of a sustained increase in construction outputsince 2000 and skill shortages arising from the previous decade of under-investment in training of apprentices, the training rate surged in 2005 to 12.9per cent, approaching near historically high rates of training. Moreover, thestock of construction apprentices in training at over 44,000 is the highest onrecord (NCVER 2005).

Apprenticeship in Australia is regulated by state laws, the centrepiece ofwhich is an indenture or contract of employment and training signed by theapprentice and employer. It specifies inter alia a training plan covering



on- and off-the-job competencies; the off-the-job training provider; qualifi-cation to be attained and release of the apprentice on full pay for off-the-jobtraining. Until recently the indenture also specified a fixed duration of train-ing, but this has been removed consistent with the shift to competency basedtraining. The indenture is lodged with a state training authority that issues atrade certificate upon completion of the on- and off-the-job training and alsomediates disputes between parties.

In contrast to Australia and many European countries, there is no statu-tory definition of apprenticeship in the United Kingdom (Ryan and Unwin2001: 100). There is not even agreement as to what constitutes an appren-ticeship (Ryan 2000). Reflecting this are constant changes in scope anddefinition which makes it difficult, if not impossible, to obtain long-run datafor the United Kingdom. The lack of precise definition of apprenticeship inthe United Kingdom is evident in the Construction Industry Training Board(CITB) annual training statistics in which there are four different specifica-tions of an ‘apprenticeship’. First, in 2002–03 there were 28,800 ‘first yeartrainees entering building craft occupations’ in the United Kingdom (CITB2003a: 4–5). These occupations are carpentry and joinery, bricklaying, paint-ing, and plastering. These are deemed to be ‘craft’ occupations and represent59 per cent of all first year construction trainees. The publication also reportsthat only 14 per cent of all first year trainees are undertaking training at aScottish Vocational Qualification/National Vocational Qualification (SVQ/NVQ) Level 3, with 56 per cent undertaking a level 2 qualification. However,the publication reports that 18,500 first year trainees or 37 per cent of alltrainees are undertaking ‘apprentice type’ training through an AdvancedModern Apprenticeship (AMA) (CITB 2003a: 9).1 A Modern Apprentice-ship (MA) entails ‘the achievement of an NVQ/SVQ Level 3, including theessential core skills, and any additional requirements’ (CITB 2003a: 9).Finally, there are differences within the United Kingdom as ‘an NVQ Level2 is regarded as the normal skill level for crafts people’ in England and Walesbut, ‘in Scotland an SVQ Level 3 is the expected level of skill required’ (CITB2003a: 8).

Gospel (1998: 440) finds the ratio of apprentices to total employment inthe construction industry declined by between a third and a half from the1980s to the mid 1990s. The Adult Learning Inspectorate (2005a: 1) suggeststhat in the 1970s the annual intake of ‘construction apprenticeships . . .[was] . . . almost 100,000’ persons. During the 1990s the annual intake oftrainees averaged 30,000, but the number increased to 48,750 in 2002–03.Between the mid-1980s and the mid-1990s the number of apprentices regis-tered with the CITB fell by 60 per cent (ILO 2001: 40). This decline mirrorsa general fall in apprentice training. Across all industries the stock of appren-tices fell from 3 per cent of total employment in the mid-1960s to 1 per centin 2000 (Ryan and Unwin 2001: 101).

Despite the difficulty in assembling a consistent time series, it seems rea-sonable to conclude that the UK construction industry has experienced alarge and sustained fall in apprentice training over the last three decades, in



contrast to a modest reduction, and recent recovery, in both the level and rateof construction apprentice training in Australia.

4. Explaining the decline in construction industry training rates

Declining rates of vocational training in the UK construction industry, andto a lesser extent Australia, reflect a broader international trend and areconventionally attributed to three interrelated changes in the industrial struc-ture of the industry. These changes are the reduced role of the public sector,intensification of subcontracting and growth of self-employment (ILO 2001:19–21).

Before progressing, however, it is necessary to consider two alternativeexplanations of the decline in training in the UK construction industry. Thedecline does not reflect a long-run fall in construction output and, hence,demand for skilled labour. After the recession of the early 1990s, the industryhas experienced steady growth with less volatility in output compared toprevious decades (CITB 2003a: 14). The construction industry in both coun-tries accounts for around 6–7 per cent of GDP and 7–8 per cent of totalemployment (ABS 2004a; Harvey 2003: 197). Differences in the occupationalstructure of the two construction labour markets are another factor to dis-count. If the proportion of trade-based occupations was much lower in theUnited Kingdom than Australia this would imply that there is less demandfor apprentices to supply these occupations. However, this is not the case, asthe occupational structures are broadly similar (CITB 2003a: 31; Toner2006).

Structural Change in the UK and Australian Construction Industries

(a) Reduced role of the public sector in constructionThe adoption of neoliberal political and economic policies from the 1970sreduced the size of the public sector in the economy, and in the constructionindustry in particular. On the demand side, the role of the state in the UnitedKingdom was reduced due to privatization of state-owned utilities, infra-structure, housing and introduction of public–private partnerships (Evans1991: 27). On the supply side, privatization and compulsory competitivetendering reduced public-sector construction capacity (ibid.: 33). Forexample, in 1979, 156,000 persons were employed in Local Governmentconstruction activity; by 2002, this had declined to 47,000 (National StatisticsOffice 2002: table A).

Similar trends are evident in Australia. Public-sector share of total expen-diture on construction declined from 36 per cent in 1987 to 20 per cent in 2004(ABS 2004a). This is a decline of 44 per cent. Between 1984 and 2004 thepublic-sector construction workforce declined by 81 per cent (ABS 2004b:table 7a). By contrast, the total public-sector workforce fell by only 4 per cent



over the same period. In the 1980s the Australian public sector accounted foraround 15 per cent of all construction apprentices; it now accounts for 2 percent (Toner 2005).

Such policies proved adverse for public and private investment in trainingfor a number of reasons. Compulsory competitive tendering for public-sectorconstruction has the effect that ‘private sector firms which do not train canundercut the costs of the public sector Direct Labour Departments that dotrain’ (Rainbird 1991: 208). The ‘shift away from public sector work has alsoaltered the size and duration of construction projects . . . [as] the publicsector provides most long-lasting, high value projects . . . [consequently] theshorter duration of projects leads to the time horizon of a contractor’sassured future work shrinking dramatically’ (Ball 1988: 107–8). One of themajor reasons for firms’ reluctance to invest in training is their inability tocontrol or predict their level of output (ILO 2001: 39). This reluctance isamplified in the case of apprentices who require three to four years ofemployment and training before they are qualified (DETYA 2001: 79).Finally, the reduction on both the demand and supply side of public-sectorconstruction activity has accelerated the shift from direct employment oflabour to subcontracting and self-employment.

(b) Intensification of subcontracting and growth of self-employmentSubcontracting has always been a feature of the construction industry as thecyclical nature of industry output and the short duration of many construc-tion projects creates a demand for numerical flexibility in the use of labour.Subcontracting is also stimulated by the comparatively low barriers to entryinto the industry, especially in terms of capital requirements (Raftery 1991).Over the last three decades there has been an intensification of subcontractingin global construction markets. As a larger share of construction output isfunded through private-sector global capital markets, this has intensified thecompetitive pressure to cut costs and equalize the rate of return to investorson construction investments across diverse locations and asset types (ILO2001: 25; Toner and Coates 2006). Over time, head contractors have reducedtheir direct workforce and increased their reliance on subcontractors andencouraged competition between subcontractors to cut labour costs through‘work intensification’ (Winch 1998). By engaging the self-employed and sub-contractors, firms can reduce their total labour costs by 20–30 per centthrough non-payment of on-costs such as superannuation, workers’ compen-sation, sick pay and holiday pay (Evans 1991: 35; Harvey 2003: 200). Fromthe 1970s, changes to taxation policy in the United Kingdom and Australiaencouraged the growth of subcontracting by providing a financial incentivefor employees to become self-employed (Buchanan and Allen 1998; Harvey2003: 199–200). Finally, the declining role of the public sector as a providerof construction services affected the firm-size distribution of the industry aspublic-sector construction units were much larger on average than private-sector firms and therefore less reliant on subcontractors.



In 1971, in the United Kingdom, 15 per cent of all construction employeeswere employed in firms with 2–13 employees (Harvey 2003: 194). By 200631.3 per cent of employees were in firms with 1–9 employees (Department forBusiness Enterprise and Regulatory Reform 2007). (A change in firm-sizeclassifications means that similar data for the two periods are not available.)In 1978 the share of self-employed in the total construction workforce was 23per cent (Winch 1998: 533). By 2006 this share had increased to 41 per cent(Department for Business Enterprise and Regulatory Reform 2007). Rates ofself-employment among tradespeople such as floorers, plasterers, painters,bricklayers, roofers and carpenters range from 50 to 75 per cent (CITB2003b: 23).

Similar trends occurred in Australia. In 1978, 19 per cent of all persons inthe industry were self-employed; by 2001 this had increased to 36 per cent.Average firm size in the private construction industry fell from 4.1 personsper firm in the late 1980s to 2.1 persons in 2002–03. This was due to anincrease of 247 per cent in the number of private construction establishmentsfrom 1988/89 to 2002/03, while total employment in the industry increased by81 per cent. The increase in the number of establishments reflects the growthof subcontracting and self-employment (Toner 2006).

The disproportionate growth of employment in small firms and self-employment in construction has raised impediments to employer investmentin training. It is well established that there is an inverse relationship betweenfirm size and propensity to invest in workforce training (Black et al. 1999).One factor behind this relationship is that the self-employed or very smallfirms generally do not have the surplus labour capacity to divert an experi-enced operative from production to supervision of training (Winch 1998:539). Second, the intensification of subcontracting and growth of small spe-cialist firms impedes the continuation of the traditional apprenticeshipsystem due to the narrowing or fragmentation of skills undertaken withinthese firms (Adult Learning Inspectorate (ALI) 2005a: 1; DETYA 2001: 24).Third, there is an inverse relationship between the intensity of use of labouronly subcontractors by firms and their propensity to employ apprentices(CITB and the Department for Education and Skills 2003: 5). This inverserelationship is driven by competition in that firms not bearing the costs oftraining gain a price advantage. A vicious circle is at work as employers aredriven by price competition and/or skilled labour shortages to engageworkers on non-standard forms of employment like the self-employed andlabour hire, but this exacerbates skill shortages as apprenticeships are almostexclusively available to persons in standard forms of employment (Fordeand MacKenzie 2005). Finally, as explained by Gospel (1998: 256), self-employment undermines employer solidarity, which is essential for cohesiveemployer associations and multi-employer co-ordination of the apprentice-ship system.

Another factor, although one which is of much greater significance for theconstruction industry in the United Kingdom than Australia, is the recentgrowth of immigration. The construction industry in both countries has



always been an important source of employment for migrants (Balch andGeddes 2003; Toner 2001). In the United Kingdom the Irish have been thetraditional source of overseas labour for the industry (Cowley 2001). Overthe last decade this source has shifted due to booming construction activity inIreland and the decision by the UK government to liberalize entry to Euro-pean Union citizens, including the new Eastern European member states(Balch and Geddes 2003). The availability of such a large and relatively cheaptemporary labour supply, which can respond in short notice to fluctuations inconstruction activity, has been argued to reduce the incentive for employersto invest in training (Clarke et al. 2003).

This situation contrasts markedly with that in Australia. Migration toAustralia by tradespersons has traditionally been for permanent settlementand was not designed to meet short-term fluctuations in activity (Toner2001). Second, almost all tradespersons enter under the Skilled MigrationScheme, which requires assessment of overseas qualifications, including tradecertificates, to ensure equivalence with local standards (DIMA 2007: 21).However, recently the migration system was altered to allow employers andlabour hire companies to sponsor temporary inflows of tradespersons onwage rates set by the Immigration Department. In some instances thesewages are below market rates. Further, the qualifications of temporarylabour are not required to be assessed for local equivalence (Hugo 2006). Todate these temporary inflows have been relatively modest, with 4,000 con-struction personnel across all occupations entering Australia in 2006 (Phillips2007). While these changes have the potential to diminish employer invest-ment in domestic skill formation, there is no strong evidence of this effect todate.

Institutional Differences in Construction Training betweenthe United Kingdom and Australia

(a) The organization of employersThe construction industry in the United Kingdom has followed the evolutionof the wider industrial relations system. In response to growing union mobi-lization in the industry, the principal construction employer associationswere formed in the latter part of the nineteenth century (Morton 2002: 72). In1926 the employer associations and the unions agreed to industry-level bar-gaining and formed the National Joint Council for the Building Industry tonegotiate on wages, working conditions, safety and apprenticeship training(ibid.: 73). This reflected the wider system of ‘industry-level collective bar-gaining between trade unions and employer associations’ developed at theturn of the century that continued into the postwar period (Howell 2005: 86).The negotiated outcomes for the industry were codified in the Working RuleAgreement (WRA). The only provisions in the Agreement relating to appren-ticeships concerned wages and duration of training. This bipartite bodycontinues as the Construction Industry Joint Council as does the WRA.



In response to the needs of postwar reconstruction and skilled labourshortages, employers in many industries, including construction, participatedin the establishment of collective regulation to improve the performance ofthe apprenticeship system. The Building Industry National Joint Apprentice-ship Scheme, created in 1945, prescribed a formal indenture and duration forapprenticeships, as well as employment conditions and pay rates. It alsocrucially provided for day release of apprentices to attend technical collegeone day per week for thirty weeks over three years on full pay (Williams 1957:93–95). While comprehensive in scope, these postwar collective agreementswere only a partial success as they had ‘no legal sanction or supervision’(Williams 1963: 4) and many construction employers continued the ‘longtradition’ of employing as tradesmen persons who had not completed anapprenticeship (Williams 1957: 98). By the mid-1950s, only just over half ofall construction apprentices were engaged under a formal indenture or par-ticipated in day release (ibid.: 102, 153). Due to poor quality of teaching infurther education colleges and a lack of correspondence between the contentof training and the needs of industry, only a very small minority of construc-tion apprentices achieved a pass in their off-the-job training (ibid.: 168, 175).Several years after her original study in the mid-1950s Williams (1963: 4)noted the ‘continuing anxiety’ of industry regarding the ‘quantity andquality’ of apprenticeship training in the United Kingdom.

From the 1970s the scope for employer support of training declined due tothe intensification of subcontracting, the rapid rise of self-employment andthe large increase in the share of employment in small firms. The self-employed generally are not members of employer associations and very smallfirms are less likely to join than larger firms. These changes reduced theproportion of firms who were subject to the WRA (Harvey 2003: 194; Morton2002: 74). The relevance of retaining a national industry-level agreement forthe construction industry was also called into question by the shift from the1960s in other industries to ‘decentralisation of private-sector collective bar-gaining from the multi-employer level to the level of the enterprise, division orplant’ (Gospel and Druker 1998: 250). In addition, severe recession and sloweconomic growth over the 1970s and 1980s intensified competitive pressure onconstruction firms which, struggling to survive, focused on their own short-term needs and reduced their compliance with industry agreements. The resultwas that construction industry employer ‘associations lacked cohesion anddisciplinary authority’ (Evans 1991: 31). This authority was further under-mined by the ‘wholesale decollectivization of industrial relations’ thatoccurred from the 1980s under the Conservative government (Howell 2005:132). By 2004, just 19.9 per cent of employees in construction were covered bya collective agreement compared to 35 per cent across all industries (Depart-ment of Business Enterprise and Regulatory Reform 2006).

Despite this decline in the capacity of construction employer associationsto mobilize support among firms for training, these associations and largerconstruction firms continue to dominate the substantial bureaucratic appa-ratus that fund and control vocational education in the construction



industry. In recognition of significant market failure by UK constructionfirms to invest in vocational training, the industry is unique in retaining thelegislated right to impose a training levy. The levy, introduced in 1964 as animpost on construction firms’ payroll, is used to subsidize vocational andmanagement training in the industry. In 2006 the levy raised over £150m(CITB 2007: 27).2 These substantial funds have, however, been insufficient tooffset significant impediments to training. The levy was administered by theCITB, which also played the central role in determining the content of traineeand apprenticeship training (Construction Industry Council 2003). Crucially,membership of the CITB was employer dominated. The statutory right oftrade unions to be represented on the CITB was removed in 1989 andemployer representatives were required to be in the majority on the Board(CITB 2003c: 24). From 2003 the CITB was incorporated into CITB-ConstructionSkills, the Sector Skills Council for the construction industry.Sector Skill Councils are also ‘employer-led’ and designed inter alia toprovide ‘employers . . . increased influence with education and training part-ners’ (Sector Skills Development Agency 2007). In 2006, of the 24 boardmembers of the CITB-ConstructionSkills, 15 are employers and 2 are unions,the remainder are from government, education and professional institutions(CITB 2007: 62–63).

Employer control of the CITB and Sector Skills Council reflects a broaderfailure to develop a social partnership on training in the United Kingdom,unlike in continental Europe (Keep 2006: 56; Steedman 2001: 36–37). Theabsence of this partnership means that there is no ‘counter-balance [to]employers’ legitimate concern to minimize costs and maximize firm specifictraining’. This is evident in the rapid expansion of NVQ Level 2 qualificationsin the industry. These typically provide training of just one to two yearsduration, which can be undertaken fully on-the-job (Steedman 2001: 7–9).

In contrast to the United Kingdom, construction employer associations inAustralia are comparatively robust. Apart from trade-based employer asso-ciations covering plumbers, electricians, painters and other vocations, theprincipal employer associations operate at a sectoral level with the HousingIndustry Association covering residential construction, the Master BuildersAssociation (MBA) covering ‘up-market’ residential and smaller commercialconstruction, and the Australian Constructors Association representingmajor contractors. This strength is a response to active construction unionsand the fact that the decentralization of industrial relations that occurred inAustralia under a Labour government did not start until the early 1990s(Underhill 2003: 114). It accelerated under a Liberal (conservative) govern-ment from 1996. The great majority of workers in all industries are nowcovered by bargaining at the enterprise level. Construction employer asso-ciations, as in the United Kingdom, have supported these industrial relationschanges with a view to constraining union influence. Industry-level agree-ments remain, the main one being the National Building and ConstructionIndustry Award (NBCIA), but these stipulate minimum wage and employ-ment conditions. Unions use local bargaining to pressure particular



enterprises to break ranks and agree to improved wages and conditionswhich, if granted, flow quickly to other enterprises through a system of‘pattern bargaining’ (Productivity Commission 1999: 48). Pattern bargainingis also explicitly or implicitly supported by some employer associations asthey reduce bargaining transaction costs and limit price competition amongemployers for labour (ibid.: 141).

Australian employer associations not only have the capacity, but also thewillingness to ‘actively promote training and skill development’ (Underhill2003: 126). The NBCIA also details vocational training arrangements for theindustry. For example, it specifies which occupations are subject to appren-ticeship, such as carpenter, painter or bricklayer; apprentice pay rates; thequantum of paid off-the-job training; duration of the apprenticeship andconditions permitting early completion of the apprenticeship, such aspreviously finishing a pre-apprenticeship course (NBCIA 2000: Cl. 20). TheNBCIA also closely links wage rates and training, as wage differentials acrossall manual and supervisory occupations covered by the award are based onthe acquisition of clearly specified qualifications and/or skills. In addition,these wage differentials across these occupations are expressed as a percent-age of the trade wage rate.

Employer associations, along with unions and government, are repre-sented on tripartite bodies responsible for the design, administration anddelivery of vocational training and occupational licensing for the industry.These tripartite organizations typically make decisions on a consensus basisand major policy disagreements are uncommon. Construction employerassociations were among the first employer bodies involved in the establish-ment of Group Training Companies (GTCs) in Australia in the 1970s, andthey continue to be a major employer of apprentices in the industry (Toneret al. 2004). Partly as a result of the continuing strong influence of unions, theself-interest of trade-based employer associations and support from sector-level associations for the maintenance of the traditional apprenticeshipsystem, employer associations have not, in the past, sought to fragment tradeskills as occurred in the United Kingdom.

(b) The organization of labourThree unions are party to the WRA: The Union of Construction AlliedTrades and Technicians, the Transport and General Workers’ Union(TGWU) and the GMB. In turn, each of these unions is the product ofamalgamations over many decades (Morton 2002: 74). Indeed, as recently as2007 the TGWU merged with Amicus to create a new entity, Unite. Decen-tralization of the postwar industrial relations system, that was argued aboveto be an impediment to employer solidarity and multi-employerco-ordination, was similarly corrosive of union solidarity and involvement inindustry-wide training arrangements. In addition, the capacity of unions toorganize generally and, specifically, to affect training policy was underminedby opposition to union authority from Conservative governments from 1979to the late 1990s. The apprenticeship system was a particular focus of



hostility from Conservative governments as it ‘was a form of training theyassociated with trade unions’ (Gospel 1998: 435).

Union authority was also undermined by rising self-employment in theconstruction industry and the strategic mistake of unions, during the 1980s,to reject the self-employed as members (Harvey 2003: 202). The end result ofthese various changes is that the construction industry occupies ‘an extremeposition in UK industrial relations’ in terms of the decline in both uniondensity and ‘employee participation in representative bodies’ over the lastthree decades (Harvey 2003: 203). In 2004 union density in the UK construc-tion industry was 16.7 per cent, down from 26.2 per cent just 10 years earlier(Department for Business Enterprise and Regulatory Reform 2006). Dwin-dling union membership is neither conducive to bargaining on industry-widetraining nor to enforcing such agreements (Morton 2002: 74).

Effective unions are essential for the development and maintenance ofoccupational labour markets characteristic of apprenticeships. Such labourmarkets depend on employer associations and unions balancing firm-specificand industry-level training needs (Agapiou 1998: 519). In the UnitedKingdom, over the last three decades unions, with a few exceptions such asthe Amalgamated Engineering and Electrical Union (AEEU), have not per-formed this countervailing function (Gospel and Druker 1998; Steedman2001). A consequence is that apprenticeship training in the constructionindustry has become ‘increasingly narrow and task-related’ (Clarke and Wall1998: 561).

The ‘deviant case’ in the UK construction industry is the maintenance of arelatively high level of apprentice training in the electrical trades (Gospel andDruker 1998). This has been attributed largely to the capacity of the AEEUand the employer association, the Electrical Contactors’ Association, sincethe 1960s to maintain industry-level regulation of bargaining over wages,conditions and training through the institution of the Joint Industry Board(Gospel and Druker 1998: 254). Maintenance of high union and employer‘density’ contributes to compliance with bargaining outcomes (Gospel andDruker 1998: 257). In the rest of the construction industry, negotiations overtraining and industrial relations are effectively separated. Wages and condi-tions are dealt with through the WRA and training through the employerdominated CITB-ConstructionSkills. The AEEU recently merged into thenew union Unite. The longer-term implication of this for the maintenance oftraining arrangements for the electrical trades is unclear.

The principal construction union in Australia is the Construction, For-estry, Mining and Energy Union, which covers most on-site manual workerswith the exception of plumbers and electricians. The latter have their own,separate unions. As in the United Kingdom, union density in the Australianconstruction industry has declined markedly, from nearly half of all employ-ees (48 per cent) in 1986 to under a quarter (23.4 per cent) in 2004 (ABS2004c). This reduction is nearly identical to that in the broader economy.Nevertheless, union density is substantially higher than in the UnitedKingdom. Union influence is strongest on commercial and industrial sites



and weak elsewhere. One reason for higher union density is that, unlike theUnited Kingdom, Australian construction unions actively recruit the self-employed and provide services unique to their circumstances, such as recov-ering bad debts from principal contractors (Underhill 2003: 123). Like theiremployer association counterparts, issues relating to the content, structureand delivery of training are of central importance to construction unions. Forexample, unions also have their own large-scale GTCs and provide trainingfor apprentices, trainees and short courses for tradespeople.

Comparing Training Systems

According to Keep (2006: 47), continuous policy change in the UnitedKingdom over many decades has created a state of ‘permanent revolution’ inthe institutional structures that control, manage, fund, inspect and delivervocational education and training (VET). The rapidity of change and com-plexity of the administrative apparatus has undermined employer participa-tion in formal training.

The introduction of the Youth Training Scheme (YTS) in 1982 subsumedprevious apprenticeship programmes and broke the historical nexus betweenapprenticeship and employment as a ‘trainee’ was no longer an employee ofa firm from whom they received a wage but the responsibility of a trainingintermediary in receipt of a government allowance. The training systembecame ‘supply driven’ with the national annual trainee intake determined bythe level of ‘training places’ funded by the Department for Employment andSkills and Sector Skills Councils (Fuller and Unwin 2003: 9; Steedman 2001:35). Currently only around 10 per cent of construction trainees are directlyrecruited and employed by construction firms, with the remainder managedby training providers. Consequently, employers feel ‘disengaged from theprocess and cannot give their full commitment to apprenticeship training’(ALI 2005a: 1). Training providers report difficulty in finding employerswilling to offer apprentices the work placements necessary for completion ofNVQs, with a large number failing to gain placements (CITB 2003b: 108).Under YTS apprentice-type training was extended to many service industrieswith no history of extensive structured entry-level training. Poor qualitytraining and low completion rates in these new industries have resulted in‘damage’ to the ‘traditional concept of apprenticeship’ (BACH 2004: 5). Theappeal of apprenticeships for more able applicants was further diminishedunder YTS as the VET system was identified as a means of social inclusion,with disadvantaged youth in particular targeted for traineeships (Gospel1998: 438–39).

The introduction of NVQs in 1986 and associated changes in pedagogyresulted in the institutionalization of skills fragmentation and a lower stan-dard of apprenticeship training. The NVQ Level 2 became accepted in theconstruction industry as the standard craft qualification, with the exceptionof electrical trades (ALI 2005a: 9). Implementation of ‘competency-basedtraining’ (CBT) with NVQs, in which individuals are assessed on the



performance of discrete manual tasks, has reduced the acquisition of under-pinning theoretical knowledge which is essential for problem solving andgaining an appreciation of an individual’s role in the overall constructionprocess (Agapiou 1998: 511; Clarke and Wall 2000: 695). CBT in the con-struction industry has acted to further ‘disengage’ employers from the train-ing system. Competence is determined by college teachers or assessorsemployed by training providers and not by employers or ‘skilled craftspeoplewho actually work in close proximity to the apprentice’ (ALI 2005a: 2).

In response to rising intermediate skill shortages, the MA system wasintroduced in 1994. MA significantly increased the proportion of traineeswho gained an NVQ Level 3 and who completed their training (Ryan andUnwin 2001: 102). However, it retained many of the problems of YTS, suchas the low level of employer engagement, with only 5 per cent of traineesacross all industries sponsored by employers (Ryan and Unwin 2001: 105). Italso retained the ‘social inclusion’ approach of YTS which, combined withthe poor outcomes in many service industries, ‘devalued’ the reputation ofapprenticeships (Fuller and Unwin 2003: 24).

To compensate for the perceived deficiency in theoretical underpinnings ofCBT, a new system of Foundation Modern Apprenticeships (NVQ Levels1–2) and AMAs (NVQ Level 3) was introduced in 2001 (now calledFoundation Apprenticeships and Advanced Apprenticeships). These can besupplemented with off-the-job theory training leading to an additional ‘tech-nical certificate’ (BACH 2004: 42). However, just 38 per cent of all construc-tion Advanced Modern Apprentices in 2003–04 completed their technicalcertificate, with 61 per cent completing their NVQ Level 3 (ALI 2005a: 9).Low completion rates are a function of the ‘complexity’ of the training andassessment system and ‘disengaged’ employers.

Lastly, from the 1970s, public training funds directed to public furthereducation colleges were opened up to competitive tender with private pro-viders. The resulting ‘training market’ is subject to significant failure in termsof decline in both quality of training providers and commitment by employ-ers and apprentices to off-the-job training (Ryan and Unwin 2001). Theauthority established to monitor quality in this training market, the ALI, hasfound that in the construction industry there is a ‘high proportion of inad-equate training providers’ (ALI 2005a: 3).3

The cumulative effect of three decades of policy change is a vicious circlewhere ‘many construction employers do not value craft qualifications’ andaccordingly many apprentices lack the incentive to complete their training(ALI 2005a: 9). Reflecting this, there is little financial incentive for persons toobtain an NVQ Level 3 as opposed to an NVQ Level 2 in the UK construc-tion industry as both qualifications yield the same wage premium (McIntosh2004: 6, 25).

The training system in Australia, especially over the last decade with aconservative government in Canberra, has been informed by a similar neolib-eral training agenda as in the UK. In both countries policy changes havegiven priority to notions of flexibility in training content and delivery with a



view to adapting training to the needs of individual employers. Australia hasalso adopted a neoliberal ‘training market’ model for the expenditure ofpublic training funds, with the provision of off-the-job training opened tovarying degrees of competition from private providers. A national system ofvocational qualifications has been introduced, the Australian QualificationsFramework in Australia (AQF), along with national competency standardsembodied in training packages. Training can be customized to the needs of anindividual workplace by selecting from a broad range of training packages.Consistent with CBT has been moves to abolish ‘time-served’ requirementsfor apprenticeship. There has also been a significant expansion in short-termlow-skill traineeships in service industries with no history of formal entry-level training (Toner 2002). As in the United Kingdom there has been asimilar ‘permanent revolution’ with little continuity in the bureaucraticarrangements for training.

However, there are a number of important institutional differences betweenthe United Kingdom and Australia which have constrained the freedom of theFederal government to implement its neoliberal training agenda and partiallyameliorate the adverse effects of structural changes in the construction indus-try on apprentice training. In the Australian Constitution the administrationof vocational training, along with primary and secondary education, is largelya state responsibility. In the period of conservative government in Canberrafrom 1996 to the end of 2007, when it lost power, the states have beencontrolled by Labour governments which, in general, sought to constrain theapplication of neoliberal economic policies to the training system. Forexample, New South Wales (NSW), the largest state in Australia, has resistedimplementing the Federal government’s training market model. The statesalso commissioned a series of highly critical evaluations of the implementa-tion of Federal government training policy (Schofield 2000). The states havemaintained construction union membership of state-controlled institutionsinvolved in training policy and delivery. In contrast, the Federal governmentremoved unions from some Federal institutions concerned with vocationaltraining policy, such as the National Skills Shortage Strategy established in1999 to examine trades’ shortages (DETYA 2001).

Second, the content of apprenticeship training, as expressed in trainingpackages is regulated by a tripartite Construction and Property ServicesIndustry Skills Council (CPSISC). Unlike in the United Kingdom, this bodyhas equal representation from employer associations and unions (CPSISC2007). With support from the states and employer associations, the Federalgovernment was unable to remove union representation from the CPSISC.By balancing the interests of firms and employees, this tripartite body per-forms a critical role in maintaining the integrity of the apprenticeship system.

Third, the states maintain a system of occupational licensing that is acrucial support for the continuation of trade-based occupational labourmarkets. Licensing is in place for construction-related occupations such aselectricians, plumbers and builders for workplace safety and consumer pro-tection. Licensing typically requires the completion of an apprenticeship and



additional post-trade training. A system of occupational licensing also existsin the United Kingdom for similar occupations although there are questionsover the enforcement of these regulations. For example, it is estimated thatfor every three licensed gas installers in the United Kingdom there was oneunlicensed installer (CORGI 2006). Differences in the scope and enforcementof regulations explains, in part, the fact that the share of formally qualifiedelectricians, plumbers and builders is up to 50 per cent higher than in theUnited Kingdom.4

Fourth, in Australia the annual intake of apprentices is ‘demand led’ inthat it is the outcome of decentralized decision making at a firm level. In2004, 76 per cent of all apprentices commencing in the construction industrywere recruited and employed directly by firms or government, with theremainder employed by GTCs (Toner 2005: 43). As noted earlier, just 10 percent of UK construction apprentices and trainees were directly employed.Under such a demand-led system it is arguable that employers assume greaterresponsibility for skill formation of the apprentice than under a supply-ledsystem as in the United Kingdom. Unlike in the United Kingdom, employersalso have a role in the final assessment of apprentices in some states.

Fifth, public Technical and Further Education Colleges (TAFE) accountfor around 95 per cent of all off-the-job training of construction industryapprentices. In contrast to the United Kingdom, concern over the quality ofoff-the-job training has not been a major issue for employers.

Sixth, the states use public works procurement, including public–privatepartnerships, to require contractors to undertake prescribed levels of train-ing, including apprentice training. In NSW, for example, government con-struction projects of more than $2.5m ‘must have 20% of the trade workundertaken by apprentices’ (NSW Government 2005: 4). Similar provisionsapply in other states (Queensland Government 2007).

Seventh, traineeships are lower skill and shorter duration forms of voca-tional training available for non-trade and some trade-related occupations inthe construction industry. Unlike in the United Kingdom, employers havenot, in the main, sought to use the traineeship system to substitute forapprenticeships. Three-quarters of all construction trainees are employed inplant operator occupations that have never been part of the traditionalapprenticeship system (Toner 2006).

Eighth, from the mid-1980s age restrictions on apprenticeships in indus-trial awards were removed. The share of construction industry apprenticesaged 25 or over increased from 1 in every 22 in 1996 to nearly 1 in 10 in 2004(Toner 2005: 42). Despite higher pay rates for adult apprentices in someawards employers are compensated by more mature workers who are com-mitted to their training. This commitment is evident in the fact that appren-tices over the age of 25 have significantly higher rates of apprenticeshipcompletion than younger apprentices (Ball and John 2005). The advantagefor Australian employers in drawing apprentices from a larger labour poolhas been identified by UK training authorities (ALI 2005b: 35). Employmentof adult apprentices in the United Kingdom is uncommon as it was not until



2004 that government training subsidies were available to persons aged over24 years (Ryan et al. 2007: 130).

Finally, GTCs are especially important in moderating the adverse effect ofthose structural changes in the construction industry that have raised thebarriers to the direct employment of apprentices. GTCs employ apprenticesand hire them out to ‘host’ firms. GTCs overcome market failure in trainingby spreading the costs and risks of employing apprentices across a wide rangeof firms (DETYA 2001: 80–81; Toner et al. 2004: 30–31). Over the last decadethe growth rate of construction apprentices in GTCs was double that inprivate firms (Toner et al. 2004: 31). GTCs currently employ over one inevery four construction industry apprentices. Some of the largest GTCs forconstruction and electrical trades are run by employer associations or unionsand sometimes jointly (Toner et al. 2004: 21). Various forms of group train-ing exist in the United Kingsdom and the range of services offered is verysimilar to that in Australia (DfES 2002: 23; Gospel and Foreman 2002).However, they are much less significant in the construction industry with just3 per cent servicing this industry (DfES 2002: 16). More importantly, theimpact of group training in redressing structural change is limited as fewdirectly employ apprentices.

A System under Threat

A number of recent developments in Australia are diminishing these institu-tional differences with the United Kingdom. As noted in Section 2 the sur-vival of the Australian construction apprenticeship system does representsomething of an anomaly given the liberal market orientation of otherAustralian employment, economic and social policies. These recent develop-ments can be viewed as extending the dominant neoliberal paradigm over arecalcitrant institution.

The conservative Federal government altered the industrial relationssystem to reduce union influence, with specific measures directed at theconstruction industry (Ross 2005). Legislation introduced in 2005 restrictsunion entry to workplaces; limits the scope for strikes; promotes the move-ment of workers from collective agreements to individual contracts andprohibits pattern bargaining (Parliament of Australia 2005a). In addition thegovernment created a new regulatory body, the Australian Building andConstruction Commissioner, specifically to police the provisions of theWork Choices Act for the construction industry (Parliament of Australia2005b).

A recent strategic policy shift on the part of the major sectoral constructionemployer associations has undermined the training status quo, which waspreviously one of strong support for the traditional apprenticeship system(MBA 2005). The new policy recommends the training system adjust toincreasingly ‘specialized skill sets’ arising from the fragmentation of ‘workthat was traditionally the preserve of trades’ people’ by using lower skillshorter duration traineeships to substitute for some apprenticeships (MBA



2005: 2). The employer associations acknowledge among their members ‘con-siderable resistance to change from those who favoured the traditionalbroadly based skill arrangements as the only acceptable model’ (MBA 2005:2). Interestingly, the report notes the problems of skill fragmentation in theUK training system (MBA 2005: 6). Despite this counsel, the report recom-mends emulating many of the principal changes in the UK training systemfrom the 1980s.

Finally, the administration of VET is a state responsibility but the Federalgovernment contributes 50 per cent of VET funding and the conservativegovernment sought to use this financial leverage in recent legislation toenforce its neoliberal training agenda on the states (Parliament of Australia2005c). The object of the legislation is inter alia to give priority to the interestsof employers ‘to support a training system . . . in which industry and employ-ers drive the policies, priorities and delivery of vocational education andtraining’ (Parliament of Australia 2005c: 6). The legislation also required thestates to ‘comply with the user choice policy’ by increasing by 5 per cent eachyear the proportion of public training funds, previously directed to TAFE,that are subject to competition with private VET providers (Parliament ofAustralia 2005c: 10–11). Increasing the degree of competition in the ‘trainingmarket’ has the potential to undermine the quality of off-the-job training asoccurred in the United Kingdom.

5. Conclusion

This article has drawn on the literature on the institutional foundations ofnational apprenticeship systems to explain the decline of this system in theUK construction industry and its survival in Australia. Both countries haveexperienced similar change in the structure of their construction industries, interms of: a significant reduction in the public-sector share of investment inconstruction; withdrawal of the public sector and larger private-sector con-tractors from direct production; increased reliance on private global capitalmarkets for funding construction projects; intensification of subcontracting;growth of self-employment and disproportionate growth of employment insmall firms. These structural changes have raised barriers to employer invest-ment in training in both countries. Yet only in the United Kingdom havethese changes been associated with a large and sustained decline in construc-tion apprentice training rates. The article argued that interrelated differencesin the institutional arrangements for industrial relations; for training; and forthe organization of employers and labour have exacerbated the adverseeffects of these structural changes in the United Kingdom and moderatedtheir effect in Australia.

These institutional differences however, have diminished as the formerconservative Australian federal government pursued a neoliberal agenda onindustrial relations and vocational training designed to reduce the bargainingpower of unions. In both countries liberalization of migration has resulted in



significant new inflows of tradespersons, with potentially adverse conse-quences for employer investment in domestic training. Some major Austra-lian employer associations are edging away from their long establishedcommitment to the traditional apprentice system. It must be acknowledgedhowever, that even as some institutional distinctions diminish, other impor-tant differences remain. Apprenticeship in Australia maintains its statutorybasis embodied in an indenture; GTCs continue to redress the inability ofindividual employers to directly employ apprentices; high quality off-the-jobapprentice training is still provided by the public sector despite reduced realfunding per student; the employment of apprentices in Australia will remaindemand driven into the foreseeable future and State governments will usetheir occupational licensing and procurement budgets to encourage training.The new national Labor government, elected at the end of 2007, intends togradually repeal the former government’s industrial relations laws andpromote collective agreements over individual contracts. Other policies,including support for ‘training markets’, will be retained.

The comparatively poor performance of the UK construction apprentice-ship system over an extended period has been identified by government andemployer associations as a constraint on the industry’s output and produc-tivity. Surveys of UK construction firms reveal that pervasive shortages ofintermediate skills have multiple adverse effects, including, wage inflation,delays in project commencement and difficulty in meeting quality standards(DfEE 2000: 55). The Construction Sector Skills Council has argued that ‘thecurrent skills profile [is] having a negative impact on industry performance’with attendant ‘risks of the industry adopting a “low skills equilibrium”inhibiting technological change’ (CITB 2007: 4). Several detailed compara-tive studies of the construction process in the United Kingdom and Europehave shown how lower on-site skills in the United Kingdom have limited thescope for productivity gains and product and process innovation (Clarke andWall 2000: 694; Clarke and Hermann 2004; Winch 1998).

This article also provides an example of the need for a much more nuancedapproach to national classification systems, such as, simple bivariate CMEand LME categories. The value of such classifications is not questioned; ratherit suggests the importance of assessing separately each of the individualinstitutional structures, such as industrial relations, training, taxation, welfaresystem and industry policy, that typically are aggregated to make up thesesingle categories. The comparison provided in this article of two Anglophonecountries that otherwise share a common historical and broadly liberal-market institutional heritage revealed major differences in the role and objec-tives of employers, unions and the state in the organization of theirapprenticeship systems. This major difference across the two countries in theinstitutional organization of their vocational skill formation systems would belost if aggregated national categories had been applied. The article also foundhowever, that the apprenticeship system in Australia is a CME ‘island’ in arising LME ‘sea’ and that this is the key reason for its current threatenedposition.



Final version accepted on 20 January 2008.

Acknowledgements

The author would like to thank Linda Clarke (Westminster), Howard Gospel(King’s College, London), Hilary Steedman (London School of Economics),Stuart Rosewarne (Sydney University) and two anonymous referees forinsightful comments on the article. This article and associated research wasproduced under an Australian Research Council Linkage Grant entitled‘Labour Supply Challenges in the Australian Construction Industry’.

Notes

1. The report did not comment on the apparent inconsistency between the 14 per centof trainees who are undertaking an S/NVQ Level 3 qualification and the 37 per centof persons undertaking a Modern Apprenticeship for whom a NVQ Level 3qualification is a requirement. It is implied, however, that the inconsistency is due tothe survey basis of the data in which trainees self-described their status in training.

2. A compulsory training levy also operates in most states in Australia and is paid byowners or developers as a percentage of the value of construction work (Stanwick2007). As in the United Kingdom, the Australian construction industry is the onlyindustry to have the legislated right to impose a training levy.

3. The functions of ALI were incorporated into the Office for Standards in Educationin 2007.

4. The following gives the proportion of United Kingdom and Australian construc-tion workers with NVQ 3 and AQF 3 qualifications. The Australian figure is inbrackets. All construction trades 47 per cent (64 per cent); electricians 59 per cent(81 per cent); plumbers 55 per cent (78 per cent); carpenters and joiners 54 per cent(70 per cent) (CITB 2003a: 31; Toner 2006).

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