Tag: Skills shortage

The Skills Shortage

As outlined in ‘A Plan to Boost Skills in the Construction Industry’, an additional 251,500 workers will be needed to meet UK construction output targets by 2028. However, the Construction Industry Training Board (CITB) reports that more workers are leaving the industry than joining it, according to the ‘Skills Construction Needs Labour Market Intelligence Report 2024-2028’.

Even with proposed training reforms, it will take several years for apprentices to become qualified and gain the necessary experience. To reduce reliance on the Immigration Skills List for labour, the government must adopt strategies that lessen the demand for skilled workers within its nationwide mass homebuilding programme.

Reducing Labour Demand with Modern Methods of Construction

Benefits of Modern Methods of Construction (MMC)

Modern methods of construction (MMC) prioritise off-site techniques, such as mass production and factory assembly, offering an alternative to traditional on-site building. This approach is especially effective for large-scale residential projects, reducing the need for skilled on-site labour.

Key MMC technologies include:

• Modular construction: Factory-made units or components (e.g., kitchens, bathrooms).
• Flat panel construction: Precast reinforced concrete panels produced off-site.
• Timber frame construction: Timber components assembled or partially constructed off-site.
• Double wall construction: Factory-made panels used to contain on-site concrete pours.
• Sub-assembly components: Specific components, such as dormer windows, made off-site.

MMC methods require fewer highly skilled trades than traditional methods, making them effective at reducing labour demand. While specific figures may vary, MMC can cut on-site labour by up to 70%, reduce construction costs by 20-40%, and shorten build times by 20-60%, according to ‘The Benefits of Modern Methods of Construction in Housing – Performance Data and Case Studies by Construction Excellence Report’.

Strategy for Advancing the MMC Sector

• Enhance UK capacity: Strengthen existing MMC providers or create new ones to serve local authorities, social housing providers, and development corporations. Establish alternative procurement strategies before starting projects.
• Collaboration for design development: Partner with MMC providers to create prototypes for asset types such as low-rise apartments and schools. Ensure designs are cost-effective, transportable, and widely available. Manufacturing facilities should be in urban centres for easy access to labour and transportation but spread across the country to reduce inefficiencies.
• Promote local production: Support local production using domestic materials. This “local content” approach stimulates the economy by creating jobs and supporting the broader manufacturing chain.
• Ensure steady demand: The stop-start nature of past homebuilding projects has hindered the MMC sector. The government could address this by mandating MMC in a nationwide mass homebuilding programme, ensuring consistent production.
• Government incentives: Provide financial support or incentives for collaborations between industry bodies, academia, and private developers to prototype and refine MMC designs, ensuring only high-quality products are mass-produced.

Despite government efforts several Category 1 MMC companies collapsed in 2022 and 2023 and significant barriers remain in the sector, including risk aversion from warranty providers, insurance companies, and unclear building regulations.

In 2021, Homes England launched a multi-year research project to assess MMC’s impact on the housing sector. The government should publish an interim report to share lessons learned and propose actionable strategies.

Key Initiatives could include:

• Capacity review: Strengthen MMC providers to support local authorities and housing providers. Develop alternative procurement strategies before projects begin.
• Prototype collaboration: Work with providers to develop cost-effective, transportable prototypes for assets like apartments and schools. Encourage partnerships to ensure high-quality designs.
• Local production: Support domestic manufacturing to stimulate the economy and create jobs.
• Steady demand: Mandate MMC in government-backed mass housing projects to ensure consistent demand and supply.

Additional Strategies to Reducing Labour Demand

Other Strategies should also be explored that could reduce Labour demand such as:

Self Build or Custom Build Homes

Self-building allows individuals to construct their own homes, often with the help of small contractors and minimal skilled labour, especially when using kit or modular homes. This off-site prefabrication, a form of MMC, offers the same labour-saving advantages.

The government can support self-builders by requiring all local authorities and development corporations to offer serviced building plots for sale. Additionally, reviewing UK manufacturers and implementing initiatives could boost supply, design variety, local content, and lower costs, helping increase the current estimated 7-10% of self-built homes annually.

Utilising the Private Consultancy Sector

Engaging the UK’s leading international construction consultancies to take on a larger role can leverage their global staff to support UK projects, either through back-office operations abroad or by assigning staff to the UK.

This would enable government bodies, such as development corporations, to operate more efficiently by focusing on core competencies while outsourcing other functions to consultancies. Additionally, private consultancies bring national and international expertise, innovation, and best practices, contributing to a more dynamic involvement in projects.

Simplifying Planning

Planning reform began with the release of the revised NPPF in 2024, but supplementary policies and guidance are needed to simplify the planning system for all users.

For instance, implementing zoning and design guides could provide greater certainty for proposed developments, reducing the assessment workload on planning departments if developments comply with these standards.

Another example would be granting planning powers for new town developments to the development corporations managing them. These corporations could establish simplified planning rules, particularly if developments within the master plan require minimal local consultation or integration with the existing built environment. This would allow smaller planning teams to handle a larger volume of submissions.

Since entering office last summer, the Labour Government has put housing policy front and centre, pledging to deliver 1.5 million new homes this term. While ministers acknowledge that figure may be ambitious, there’s no doubt they’re making progress in the right direction.

But a big sticking point isn’t just land or planning; it’s people. Who’s going to build these homes? And not only that, who’s going to maintain and retrofit the ones we already have? We don’t want to fill one side of the housing bookshelf with shiny new homes while watching the other side, our existing stock, crumble through neglect and a lack of people to maintain them. We need a skilled, future-ready workforce to support both ends of the spectrum. This is where organisations like PfP Thrive can support the sector and government on its shared vision for change.

Untapped potential

While economic inactivity has fallen slightly over the past year, over 9 million people in the UK remain out of the labour market. That’s a substantial, untapped pool of talent. With targeted support and the right partnerships, like the programmes we deliver at PfP Thrive, many of these individuals can be supported into meaningful, sustained employment.

But simply offering opportunities is not enough. We must understand what’s preventing people from accessing them. Our own research – conducted across 3000 customers in 2024 – shows that bespoke, barrier-conscious training programmes are essential. For example, within our own customer base, 44% live with three or more conditions that affect their daily lives, while 76% report at least one. These individuals are ready and willing to work – and with the right support, they can thrive.

And it’s not just about training the bricklayers, electricians, and engineers of the future – it’s also about backing today’s workforce. That means investing in upskilling, embracing modern methods of construction, and supporting the shift to new materials and techniques. We’re here to help drive that change – and deliver the homes Britain urgently needs.

Challenges ahead

The government’s £600 million investment in skills is welcome and offers an opportunity for organisations like ours to play a greater role in delivering high-quality training. We’re encouraged by the focus on bootcamps and foundation apprenticeships and are already working with partners to unlock better use of the Apprenticeship Levy.

Yet challenges remain. The recent rise in National Insurance contributions could dissuade employers, particularly SMEs, from investing in apprenticeships and training. For businesses already grappling with rising costs, this could be the tipping point. If we are truly serious about closing the construction skills gap, government policy must reflect the realities faced by employers – and make investment in people not just possible, but irresistible.

Championing Diversity in Housing

There are however other underlying issues that continue to exacerbate the sector’s skills shortage. Construction continues to face cultural challenges; be that poor gender representation – with 90% of construction apprenticeships still taken up by men – or discrimination against LGBTQ+ workers or people of colour. Age is another issue-  one in five workers in construction is over 55 – as is the resistance to helping those who have additional needs or barriers to work.

A strong workforce is a diverse one, and this means creating inclusive environments, supporting flexible working, and actively removing barriers to entry.

Collaboration and Debate

These points were echoed during a recent webinar we hosted with the University of Cambridge, featuring sector leaders eager to discuss solutions to the skills crisis. Mushtaq Khan, Chief Executive of the Housing Diversity Network, was clear saying that: “Diversity matters. But under-representation in the sector can be off-putting for those looking to move into construction. There’s a lack of networks, confidence, and a whole cohort of people we could empower with the right support systems.” Debansu Das of Zed Pods added that areas like offsite construction are already making headway – providing safer, more controlled and inclusive working environments that naturally attract a more diverse workforce, including more women.

A Pivotal Moment

Delivering more homes and supporting people into meaningful employment underpins the government’s growth priorities and our future success as a country. This is a defining moment for the sector. If government, industry, employers, educators and organisations like PfP Thrive can come together, we have a real opportunity. Not only to meet the 1.5 million homes promised, but to ensure we have a skilled, inclusive workforce ready to shape the homes and communities of the future.

Tom Arey is director at PfP Thrive, an organisation delivering comprehensive bespoke training programmes for the UK housing and construction sectors, as well as compliance training, trade skills apprenticeships and leadership development to meet evolving workforce needs.  

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The Current Skills Problem

The UK construction industry has faced a longstanding skills deficit, and this is expected to worsen as it prepares for one of the largest build programs since the post-war era. Demand for construction work has risen, but there are not enough entrants to meet this demand. An estimated 24,400 newly qualified apprentices are needed each year, with subcontractor trades particularly struggling to attract young talent. According to the UK Trade Skills Index 2024, the industry needs 1,265,000 new recruits over the next decade.

An additional 251,500 workers will be required to meet UK construction output by 2028. However, more people are leaving the industry than joining it, according to the Construction Industry Training Board (CITB).

To support the ambitious goal of building 1.5 million homes, a plan to boost skills is essential. Without this, all other aspects of the strategy are at risk of failing.

Fixing the Skills Problem with a Plan to Boost Skills

The government must collaborate with key sectors in construction to develop a Skills Plan that supports its large-scale homebuilding program. This plan should address the root causes of the skills shortage, starting with areas of consensus, including the following:

1. Engage the Younger Generation

To attract more young talent to the construction sector, employers can offer flexible working options such as job sharing, part-time hours, and better work-life balance. Expanding high-quality apprenticeships, traineeships, and upskilling initiatives will help retain a younger workforce.

A supportive approach, including positive messaging and targeted promotion on social media platforms, can also help attract young people. The government, working with the CITB, trade bodies, and unions, could establish a coordinated social media strategy to counter negative perceptions. Research from YouGov shows that 69% of adults would not consider a construction career, associating the industry with being “dirty, stressful, and unsafe.” By highlighting the sector’s digital innovations, quality engineering, new technology, and the benefits of skilled careers, these perceptions could be challenged.

Increasing initiatives like Apprenticeship Week, job fairs, and school visit programs, led by professional institutions and associations, would further engage young people. Institutes such as the Institute of Civil Engineers and the Royal Institution of Chartered Surveyors already promote high-quality professional apprenticeships, which can serve as models for other sectors.

2. Upskilling Existing Workforce

Instead of relying on migrant workers, the construction industry should focus on upskilling the existing UK workforce, particularly at the trade level. Since it takes time to train and upskill workers, it is this area that requires the most transformational change to train British workers for roles in high demand.

The CITB plays a central role in skills training, particularly for trade roles. However, it has faced criticism from industry bodies and major contractors, leading to reforms in 2017. The government’s most recent review of the CITB’s effectiveness is awaited, and any recommendations from this review should be implemented to ensure it is fit for purpose in delivering this necessary transformation.

3. Worker Retention Strategies

Employee retention in the construction industry is low for various reasons. Employers must prioritise existing employees by offering competitive benefits, wellbeing policies, and attractive remuneration packages to prevent turnover. Becoming an “Employer of Choice” means creating a supportive work environment, offering benefits and culture that attract new talent while retaining experienced workers.

This strategy should be complemented by robust training programs for graduates, supported by educational institutions. Additionally, ongoing opportunities for upskilling and staff development should be part of the retention plan.

Typical Traits of an Employer of Choice are:

• Competitive salaries and benefits
• Positive, supportive culture
• Pleasant work environment
• Opportunities for training and development
• Feedback-driven culture
• Trust and transparency
• Professional growth and capacity building

What Educators, Trainers, and Employers Need from a Plan

To support skills development, the infrastructure, including Skills Centres, Technical Colleges, and universities offering construction-related courses, needs significant expansion and funding. The government has proposed progressive plans, including the creation of a new training body, Skills England, reforms to the training levy, and updates to apprenticeships.

Given the multi-year duration of degree courses and apprenticeships, implementing these reforms urgently is critical. The government’s plan should include consultations with construction industry bodies to identify priorities and quick wins to align the education sector with the industry’s needs.

The UK’s current construction labour shortages will worsen as approximately a quarter of the workforce plans to retire in the next decade. Therefore, a steady influx of trainees is essential, regardless of the large-scale homebuilding programme.

Employers, regardless of size, need confidence in long-term workloads in specific regions to justify investing in workforce expansion and training. A successful large-scale housing programme must include strategies for coordinated housing delivery across local authorities, ensuring a steady supply over time. Additionally, responsibility for delivery should be shared across the industry, not just the homebuilding sector, spanning SMEs, larger developers, builders, suppliers, and consultants. Skills training must address the entire industry, as residential developments will also require accompanying infrastructure.

So far the industry has reacted positively to last month’s government announcement of £600m overall for:

• 10 new technical colleges and assistance for existing colleges to offer more construction courses
• Support for skills boot camps, support for returner and upskilling
• Support for partnerships between colleges and construction companies to increase industry experienced teachers
• Support for the planned new Foundation Apprenticeships, further supported with funding from the planned Growth and Skills Levy .
• Support for industry placements in coordination with the CITB
• Support for Construction Skills Mission Board to promote employer collaboration

We will continue to look with interest to further announcements in this area.