I have found the solution. While the Visual Studio IDE installed successfully it did not install any build tools and therefore did not install the C++ compiler.
By attempting to manually create a C++ project in the Visual Studio 2015 GUI I was able to prompt it to download the C++ packages. CMake was then able to find the compiler without any difficulty.
Here is the solution that worked for me:
Hopefully it should run without problems.
I looked in CMakeError.log file and found an error about cannot run 'rc.exe'
I searched and found this answer to copy RC.Exe and RcDll.Dll from the Microsoft SDKs bin to the VC bin, and then CMake worked.
Edit: The top answer to another question suggests that it's a PATH issue, so it could be enough to ensure the Microsoft SDK bin is in your PATH.
Those stumbling with this on Visual Studio 2017: there is a feature related to CMake that needs to be selected and installed together with the relevant compiler toolsets. See the screenshot below.
Make sure you are using the correct version of Visual Studio in the generator. I had incorrectly selected Visual Studio 15 when Visual Studio 14 installed.
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