A critical shortage of skilled workers is jeopardising the government’s pledge to build 1.5 million new homes by 2029.
According to a new report by skills development organisation City & Guilds, which surveyed employers, training providers, and employees, three-quarters of construction firms are struggling to recruit the skilled people they need, with the vast majority (84%) agreeing that the industry is suffering from critical skills shortages.
Stricter immigration laws, the apprenticeship levy system and a lack of interest among young people are among of the factors behind the shortfall.
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This survey chimes with the latest projections from the Construction Industry Training Board (CITB) suggests the industry needs to recruit 239,300 people by 2029 to be able to meet the projected demand for the 1.5 million homes target.
More than half (54%) of employers do not think that the sector has the workforce it needs to meet this target, with the same percentage also putting into doubt the sector’s ability to deliver net zero housing goals.
The report identifies a variety of barriers to recruitment and retention. While the rising cost of doing business is identified by nearly half (46%) of businesses as one of the biggest overall challenges the industry is facing, more than a quarter (27%) point to a lack of interest among younger people.
When it comes to hiring, local labour market shortages are flagged as the top recruitment issue by 41% of construction firms, followed by their demand for job-ready hires (36%), and a lack of broad industry appeal (31%). Stricter immigration laws, such as a higher Immigration Skills Charge and longer settlement periods, are also set to disproportionately impact construction – as 28% of businesses cite this as a barrier to recruiting the people they need.
85% of employees say training is important for career progression in the construction industry”
Kirstie Donnelly, chief executive officer of City & Guilds said the sector could not build 1.5 million homes with the current skills shortfall. She said: “We urgently need to reset how we attract, train, and upskill talent across the construction sector, with flexible routes, smarter investment, and collaboration between industry, education and government.
“With the government signalling a clear intention to reduce reliance on overseas workers, investing in and nurturing skills isn’t optional – it’s critical.”
Funded training is widely recognised as essential to creating a home-grown skilled workforce: 85% of employees say training is important for career progression in the construction industry, and 59% say more training provision would help the industry to attract more workers.
While the government has promised investment, City & Guilds’ research highlights clear gaps in funding access – with 61% of employees saying it’s difficult to secure funded training in the construction sector. Making funded training such as the apprenticeship levy more flexible and available will be key to delivering on government investment in skills.
The levy’s rigidity blocks firms from getting new talent job-ready” – Kirstie Donnelly, chief executive officer of City & Guilds
Donnelly added: “Recent government funding announcements for construction skills are extremely welcome, but this won’t move the needle without reform to the apprenticeship levy. As it stands, the levy’s rigidity blocks firms from getting new talent job-ready and makes it hard for construction apprentices to move between projects while continuing their training. A small change to introduce greater flexibility could unlock thousands of opportunities and help build a new generation of skilled construction workers.”
Nick Maclean, acting president of the Royal Institution of Chartered Surveyors (Rics), said: “The government’s ambitious targets become less and less achievable each year that there is continued underinvestment in encouraging people into pursuing, and staying in, careers in the built environment.
“Career returners and switchers hold untapped potential if funding models are set up to suit later stages of life, with Rics also advocating for investment in vocational options and apprenticeships alongside conventional education pathways.”
City & Guilds’ upcoming report, Foundations for the Future, will promote a three-pronged approach to tackle the construction skills gap: attract fresh entrants to the workforce; support professionals joining from other industries; and upskill the existing workforce through lifelong learning and continuous development opportunities.
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