London and southeast England are “fast approaching a massive gap” between demand for skills and what is available, says new report

Report predicts ‘massive gap’ in UK construction skills

6 November 2014 | By Rod Sweet 2 Comments

Tens of thousands of extra construction professionals and tradespeople will be needed to build what’s in the pipeline in London and the southeast of England in the next three years, but nobody knows where they will come from, a report released today warns.

Dubbed a “wake-up call” on the “massive gap” in construction skills, the report finds that training provision will have to soar by 51% to meet demand for construction labour between now and 2017, in order to plug a shortfall of more than 14,800 trainees.

Overall, 20% more construction managers, surveyors, electricians and other roles will be needed to meet pipeline demand in 2014-17 than were needed in the 2010-13 period, says the report produced by consultants KPMG and the London Chamber of Commerce and Industry (LCCI).

“We have to motivate construction companies to bring more young people in, to invest consistently in training”– Tony Pidgley, chairman of Berkeley Group

Currently, training providers are not supplying qualifications that the industry needs, the report said, and unless the supply of construction workers is increased, house building targets will not be met and the delivery of large infrastructure projects will be jeopardised.

The warning comes ahead of an unprecedented industry summit on the issue to be held in London this month to find a way out of the crisis. 

Organised by the Chartered Institute of Building, Inspiring the Future of Construction will hear from key industry figures including Sir John Armitt, former chairman of the Olympic Delivery Authority, and Peter Hansford, the UK government’s chief construction adviser. It takes place 24 November at the Queen Elizabeth II conference centre.

“We need to take action to resolve this,” said Tony Pidgley, LCCI President and chairman of UK housebuilder, Berkeley Group, in a foreword to the report. “We have to motivate construction companies to bring more young people in, to invest consistently in training and to develop the specific skills required today.”

He said the industry had to take responsibility: “This is not another issue for government to resolve alone. Solving the skills crisis is the prime responsibility of developers, contractors, sub-contractors and training providers, with help from the public sector. I hope the findings of this report provide a wake-up call. Finally, we have to start developing the skills to build for decades to come.”

Richard Threlfall, KPMG’s head of infrastructure, building and construction, said that London and southeast England are “fast approaching a massive gap” between demand for skills and what is available. He said the industry had to invest in attracting new talent and in training the existing labour force. 

The China effect

The report’s authors said that they may even have underestimated the skills shortfall.

They found that £95.7bn ($152.6bn) worth of construction work is planned in the region between now and 2017. Of that, £51.7bn worth of projects have already been contracted, and another £15bn worth have already been granted detailed approval. 

However, they said that new projects are continually coming into the pipeline and that “a large number of construction projects to be delivered within that period are yet to reach the planning stage”.

The industry’s capacity could be stretched even tighter if, as predicted last week, Chinese investors plough £105bn ($169bn) into UK energy, infrastructure and property projects over the next 10 years. 

Nationally, the UK’s nuclear new-build programme, its proposed £50bn high-speed rail scheme, HS2, and the infrastructure needed to realise Chancellor George Osborne’s vision of a “Northern Powerhouse” – with radically improved transport networks – would add even greater capacity shocks to UK construction.

The report put forward a number of recommendations, including:

  • Public sector contracts should require training commitments; 
  • Government should make schools provide obligatory careers advice for pupils from the age of 11;
  • Schools should be evaluated on how they progress pupils into apprenticeships and employment, not just further academic study; and
  • Government should increase the level of funding for apprentices aged between 19 and 23.

A GCR backgrounder on the deeper roots of the UK’s construction skills crisis can be found here.

Read the LCCI/KPMG report here.