Solving the UK’s construction skills gap

With the Government’s plan to build 1.5m houses and boost infrastructure, the UK construction industry needs to attract the equivalent of 50,300 extra workers per year to meet expected levels of work over the next five years.

Here, Jennie Jones in our construction team explores key factors serving to widen the construction skills gap and why industry leaders must act now to meet growing demand.

Key factors widening the skills gap

The CITB estimates that around 252,000 workers will be needed in the construction industry over the period 2024-28.

In July 2024, the Quarterly Recruitment Outlook (QRO) — a survey of more than 4,700 UK firms of all sectors and sizes by the British Chambers of Commerce (BCC) Insights Unit — revealed that while hiring problems increased across all sectors, construction and engineering firms were the worst hit. With 82% of construction and engineering firms reporting recruitment difficulties against a significant increase in demand, UK construction productivity and growth has lagged behind.

A decline in the number of apprentices entering the construction sector, an aging workforce and a surge in investment have all been identified as factors contributing to the widening skills gap. For example, according to the Financial Times, only 713,000 people were registered as apprentices in 2021 — the lowest annual total since 2020 — and almost half did not complete their course.

Plus, more than 35% of construction workers are aged over 50, with the UK Trade Skills Index 2023 reporting that the construction industry would need 937,000 new recruits over the next decade to meet demand.

In a recent report, Skills England acknowledged that the construction industry’s struggles to invest in skills and innovation were impacted by its highly cyclical and unpredictable profit margins. With so much sub-contracting and self-employment in the construction industry, there has been little incentive for employers to invest in training for on-site workers.

Increased pressure to address the skills gap

As part of its election manifesto, the new Labour Government made ambitious pledges to invest in construction. While investment has generally been welcomed by the industry, it risks increasing the current gap between supply and demand for skilled construction workers. 

Government investments in the industry

In the Autumn Budget, the Chancellor reinforced the Government’s intention to progress key initiatives including:  

Building 1.5m homes over this Parliament — along with the new infrastructure that this will demand. This is a large increase on current construction and housing output, which will require an expansion and upskilling of the UK’s construction workforce.

National Wealth Fund — The Government also plans to drive private investment in construction through its new National Wealth Fund, which it hopes will attract £3 of private investment for every £1 of public investment. The Labour manifesto suggests that these funds will be allocated as follows:

1. £1.8bn to upgrade ports and build supply chains
2. £1.5bn to new gigafactories
3. £2.5bn to rebuild the steel industry
4. £1bn to accelerate the deployment of carbon capture
5. £500m to support the manufacturing of green hydrogen.

Green Prosperity plan — Labour’s manifesto intends to double onshore wind energy production, triple solar power and quadruple offshore wind by 2030, with £8.3bn worth of investment in Great British Energy. The latest Budget confirmed £125m for Great British Energy and support for four electrolytic hydrogen projects, requiring specialist skills from the industry.

All of these projects will be hard to meet unless the current skills shortage is resolved.

Solving the UK construction skills shortage

Many in the sector are disappointed that the skills gap was not addressed in the Autumn Budget, particularly given the ambitious plans for investment in construction projects.

Despite the notable silence in the Budget, we do know however that the Government is alive to the issue and plans to tackle skill shortages by:

• Upskilling workers already in the UK rather than relying on migrant workers — however, given the length of time it takes to train and upskill workers through apprenticeship initiatives, some construction industry insiders are pessimistic about the Government’s plans to limit migrant labour, given the UK’s historic reliance on EU workers to meet peaks in demand. 
• Establishing Skills England — to bring together businesses, training providers and unions with national and local government to ensure that there is a skilled workforce capable of delivering the Government’s projects. Skills England will also consult on new courses for apprenticeships to ensure qualifications offer value for money.

Join Building Links

Our Brabners Building Links event on 4 December 2024 will explore this very topic, considering real and practical solutions for the industry to implement. Our excellent line-up of speakers will share their insights in spotlight sessions, followed by a panel discussion hosted by Jennie Jones, Partner in our construction law team. 

Our spotlight speakers include:

• Paul Gibbons — Chief Executive Officer at Decipher Consulting UK Ltd and Managing Principal at DeSimone Consulting Engineering. 
• Nicola Whyley — Senior Philanthropy Manager at the University of Salford. 
• Michele Steel — Chief Executive at Regeneration Brainery. 
• Ikram Malik — Partner in our employment, pensions and immigration team. 

If you’re interested in joining the network, please contact Jennie Jones or a member of our construction team.

Talk to us

If you’d like to discuss how any of these issues will impact your business, our experienced construction law team can help.

Talk to us by giving us a call, sending us an email or completing our contact form below.