Skilled Workers Are Essential to Build Britain’s 1.5 million Homes

Kirstie Donnelly, CEO of City & Guilds, discusses the UK construction sector’s chronic skills crisis threatening government housing targets. Despite £625 million government investment, she argues that attracting talent, supporting career changers, and transforming skills delivery systems are essential beyond funding alone.

Construction’s Critical Role in the Economy

The construction sector has always been a cornerstone of the UK’s economic growth, employing more than two million people and making a significant contribution to the nation’s GDP.

It underpins nearly all major areas of the economy, providing the infrastructure, schools, hospitals, commercial spaces and, importantly, the safe and warm homes that enable other industries to function. As a major driver of investment and productivity, it also has significant multiplier effects, with spending in construction stimulating activity across the wider supply chain.

Government Ambitions and Targets

No surprise then that the sector has been at the heart of the Government’s efforts to turbocharge economic performance. Alongside the many and varied new infrastructure projects that have been announced – spanning everything from undersea cables and energy storage to road improvements and transport links – we’ve also seen the pledge to deliver 1.5 million new homes by 2029.

Launched as part of the Plan for Change, the target would see new homes built at a rate not seen since the 1960s.

The Skills Crisis Reality

But the construction sector is in trouble. It’s tackling a chronic skills crisis that puts this ambition in doubt, let alone the other key infrastructure investment projects or those needed to deliver on our net zero targets.

The latest research from City & Guilds paints a picture. More than three quarters (76%) of construction firms are struggling to recruit the skilled people they need, with 84% agreeing that the industry is suffering from critical skills shortages.  

More than half (54%) of employers do not think that the sector has the workforce it needs to meet the target of 1.5 million new homes, with the same percentage also putting into doubt the sector’s ability to deliver net zero housing goals.

Firms are struggling to hire the skilled people they need, and negative perceptions of careers in the sector, tighter immigration rules and continued soaring costs are all combining to worsen the situation.

Government Investment Brings Hope

To unblock this, there needs to be an urgent reset in how the sector attracts, trains, and upskills talent, to help lay the strong foundations required for future growth.

There are positive signs on the horizon. As part of the Plan for Change, the Government recently announced £625 million in investment in the sector, with the aim of training up to 60,000 new construction workers by 2029. We know that bootcamps and apprenticeships help to open doors to opportunity. For example, last year City & Guilds bootcamps led to 89% of learners going straight into employment outcomes on completion.  Early entry opportunities to careers such as this could change the future outlook for the industry.

Why Funding Isn’t Enough

We also know that funding alone isn’t enough. Without reform to skills delivery, greater flexibility and coordination to good quality experiences, it’s not going to solve this issue.

In our recent report, Foundations for the Future we’ve highlighted three areas that must be addressed by training providers, employers and policymakers in order to close the chronic shortage of skills in construction.

Attracting New Talent

Firstly, more needs to be done to attract new people into the industry – particularly younger workers, but also career changers – to overcome the talent deficit. This means improving perceptions of careers in the sector, which are currently thought of as physically demanding, low-paying and low-status. There are also concerns about the lack of diversity and flexibility available in construction.

Unless these are overcome, the entry pipeline for talent the industry will always be lower than it should be.

Supporting Career Changers

Secondly, improving support for professionals joining from other industries by ensuring they can access training in both construction and durable skills that will provide them with stable, well-paying jobs both now and as the industry evolves. 

Upskilling the Existing Workforce

Finally – and critically – upskilling the existing construction workforce. This means promoting a culture of lifelong learning and continuous development that keeps pace with a changing market and that equipment is adequate for teaching essential competencies in new technologies.

Transforming Skills Delivery

But this also means looking again at the way we deliver skills. To lay strong foundations for future growth, the funding system must be fit for purpose – targeted, agile, and aligned with real-world demand.

For example, as it stands, the Apprenticeship Levy’s inflexibility is blocking firms from getting new talent job-ready, as it’s hard for construction apprentices to move between projects while continuing their training.

The government recently announced plans to make changes to the Levy but exact information on those changes has not yet surfaced. To address both immediate skills gaps and long-term industry needs, a balanced levy structure would be more effective. Allowing around 20 per cent of funds to support in-work training for re-skilling and up-skilling would allow construction employers and providers to address gaps where shortages are holding the industry back. The remainder should be reserved for apprenticeships, although even in this area, a percentage of allocations should be retained for younger people and entry-level jobs.

The Stakes for Economic Growth

Tackling these challenges will not be easy. But it isn’t just important for the construction industry. With future economic growth at stake, getting this right matters to us all.

By Kirstie Donnelly MBE, Chief Executive Officer, City & Guilds