We have no builders: Skills shortages threaten Government’s house building targets

By Peter Skalski

Last September the government announced an ambitious target to get a million new homes built by the end of the parliament. Unfortunately, grand pledges on housebuilding from politicians have to be taken with a pinch of salt. Governments of both sides have consistently failed to ensure that the country builds the sufficient number of homes it needs. Many commentators are sceptical that this million homes target can be realised, particularly as the Government’s Housing Bill is aimed at enabling home ownership rather than increasing the supply of homes. 

However, if we were to be optimistic and say that the Government was successful in removing the obstacles holding back homebuilding, including the availability of land, there is a further problem down the road. Even if we had the land available to build more homes, do we have enough people to actually build them? 

The figures don’t look promising. In the most recent RICS Construction Market Survey, 67% of respondents reported that skills shortages were the most potent constraint on activity than at any time over the previous three years. Likewise, in the most recent quarterly survey of SMEs by the Federation of Master Builders, over half of respondents reported difficulties in recruiting bricklayers and joiners, compared to around 45% at the same time last year and less than 25% in 2013. 

This shortage of labour creates two problems for increasing homebuilding and affordability. First, it slows the pace of new homebuilding as construction firms struggle to hire the necessary workforce to complete projects. Secondly, as wages in the sector rise, the increased cost of labour in building homes is passed on to buyers. With 10-year qualified bricklayers earning up to £60,000 a year in London (twice as much as in some parts of the UK), that’s adding a big chunk to the cost of a new home.

The construction sector lost some 400,000 jobs during the recession. The industry estimates an annual recruitment requirement of almost 45,000 people a year between 2015-2019. Whilst in previous shortages Britain might have been able to bring in Polish plumbers or Bulgarian brickies, Government targets to reduce net migration and the possibility of leaving the EU, put increased emphasis on encouraging British workers to take up a career in building. 

However, the industry fears that young people are turning their backs on the profession. The number of construction, planning and built environment apprenticeship achievers dropped 58% between 2008/9 and 2013/14, from 18,850 to just 7,930. Peter Box of the Local Government Association observed that “For too long we've trained too many hairdressers and not enough bricklayers. Too few apprentices are getting the construction skills to build the homes and roads our local communities need." 

Skills training and provision in the UK is often criticised for being too fragmented and unable to respond to employer needs and training. The construction industry is no different. The Construction Industry Training Board has commented on how “increasing fragmentation and diversity shapes current and future human capital needs of the industry. One-size-fits-all education and training policy responses might be too unsophisticated to meet the needs of our highly diverse sub-sectors.”

To its credit, the Government has placed a strong emphasis on improving the quality and quantity of apprenticeships. But it is local government that is best suited to tackle local skills shortages. Greater control and flexibility of skills funding, such as through the devolution deals announced so far, should help local government play a greater role in matching the supply of and demand for skills and align them with the needs of the local economy, including in the building trade. Through the planning system, local authorities have a greater knowledge of the local housing market, and they have the ability to foster partnerships between different business, colleges and training providers. Some towns and cities may face a shortage of electricians, whilst others a shortage of plasterers.

At this year’s Conservative Party Conference, George Osborne claimed the Conservatives would be “the builders.” If the Government wants to meet its ambitious housebuilding targets, helping to train more builders in the first place would be a good place to start.