Labour-linked think tank urges apprenticeship grants and public investment as construction skills shortages worsen

The shortage of skilled construction workers has risen 419% since 2011, according to a new report from a Labour Party affiliated think tank.

The Fabian Society’s ‘Building Skills’ report warned that the crisis in skills threatens to derail the government’s ambition to build 1.5 million homes and deliver clean energy. It urged greater government action to address the issue, including new grants for training and counter-cycle investment in housing and infrastructure.

It found that there are 37,000 vacancies across the construction and built environment sector that are unfilled due to a lack of skilled workers and that construction had the highest proportion of such vacancies across all industries.

It also warned that the crisis could escalate further without action, with 36% of construction workers aged over 50 - meaning around 700,000 are due to retire within two decades.

Despite the mounting challenge, the Fabian Society found that employer investment in training per employee had fallen 19% since the introduction of the apprenticeship levy in 2017, and that the proportion of employers providing training had declined 9% over the same period.

Only 57% of those starting an apprenticeship in construction will complete it - the lowest of any sector. 

The report found fault in the boom and bust pattern of the sector, which undermines incentives to invest in good times and causes a flight of workers in bad times. The sector’s reliance on SMEs also makes it difficult to sustain high levels of investment in training.

The Fabian Society has called for an apprenticeships grant for employers worth up to £9,000 for SMEs that take on young apprentices, as well as a similar grant, worth up to £2,500 per start, to support apprenticeship providers.

It also called for a new employment programme to help the 400,000 unemployed people whose last job was in construction to re-enter the industry.

Finally, it urged the government to ramp up public investment in housing and infrastructure during downturns to prevent destructive cycles.

Joe Dromey, general secretary of the Fabian Society, said last year’s construction skills package was a “welcome step forward” but that the “sheer scale of the crisis demands bolder action”. 

“We need both to boost apprenticeships, to retain workers in the sector, and to address the structural drivers of the construction skills crisis,” he said.

David Campbell, chief operating Officer, National House Building Council, described the report as a “wake-up call”, flagging his organisation’s £100m investment in a network of multi-skill training hubs. 

However, he stressed that “the skills crisis cannot be solved by one organisation alone” and that there needed to be a “collective effort to support SMEs to take on apprentices, retain experienced workers and make construction a career people choose”.

The Fabian Society was founded to advance a gradualist, reformist and democratic version of socialism and it was one of the groups that helped create the Labour Party at the start of the 20th century. It is now operates as a think tank and is generally associated with moderates and centrists within the party.