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Is the construction industry facing a post-Brexit skills crisis?

Written by Hannah Anderson

Senior Account Executive

The British Property Federation (BPF) has warned that the construction sector faces a post-Brexit skills crisis if departing the EU results in fewer construction workers coming to the UK. Yet the main political parties are all pledging to build more homes, yet cut or reduce net migration. With an existing skills gap in the UK’s construction and house building workforce, and a possible points based system for EU workers, the UK could miss out on an additional 215,000 migrant workers up to 2020.

What’s the problem?

The problem is two-fold.

On the one hand, the Conservatives have re-iterated their 2015 manifesto commitment to cut net migration to the “tens of thousands”. Despite this figure being under 100,000 since 1997, the Conservatives are clearly hoping that the UK’s withdrawal from the EU (and restriction on, or an end to free movement) will give them the control over borders required to finally meet this target.

On the other hand, the major parties have committed themselves to demanding house-building targets. The Conservatives aim to build 1 million new homes by the end of 2020 and deliver half a million more by the end of 2022. Meanwhile, Labour is pledging to build 1 million new homes by 2022, while the Liberal Democrats are promising to build 300,000 new homes each year over the course of the next Parliament.

Research by Arcadis suggest the industry needs to recruit more than 400,000 workers a year if it is to meet the demand for new homes and so a dramatic cut to migration levels could create a skills crisis in the construction industry.

How could this problem be mitigated?

Boost Apprenticeships:

Construction employment is down 15% since 2008, following an upward trend of younger people leaving school/college and going to university rather than learning a trade. According to figures from the Construction Industry Training Board, between 2015-2016 25,000 people started apprenticeships in construction, 25% more than the previous two years. However, at the same time 60,000 people a year leave the industry, many of these being apprentices that never finished their training.

In April 2017, the Conservative government introduced the Apprenticeship Levy, which aims to fund 3 million apprenticeships by 2020. Through this levy you can also use the apprenticeship service, whereby you receive levy funds to spend on apprenticeships, training and management of apprentices. However, very few businesses have signed up for this, and therefore at the moment, the UK does not have the right people to build the homes and infrastructure we need.

By boosting the attractiveness of apprenticeships, we could encourage and retain real talent in the construction industry. The benefit of apprenticeships mean that through mentoring and qualifications alongside real on the job experience means an instant developing skilled workforce, with scope to improve and develop very quickly. Once the apprenticeships have completed their qualifications, they will be in a position to replace the employees that are currently sourced from the EU and the rest of the world.

Visas and Shortage Occupation List:

In the event of a hard Brexit with no freedom of movement of people across the EU, we could lose more than 175,000 EU workers in a mass exodus, with little prospect of replacing them. A recent analysis of labour force data in London indicated that of the 350,000 construction workers in the capital, almost 95,000 were born in the EU – making up 45%. In the current climate, we are looking at a skills gap of construction workers from the UK and the rest of the world, in the event of a hard Brexit, this would certainly turn into a skills gulf, which would invariably deepen the housing crisis through lack of workforce.

One way around this issue, should it arise, would be to include skilled construction workers on the Shortage Occupation List, whereby migrants could obtain a three or four year short-term temporary visa for trades that are experiencing shortages. If this was introduced alongside a countrywide boost in apprenticeships, this could help plug the skills gap.

The weeks following the General Election on 8th June will be key to assessing the direction that the UK will need to take in order to maintain and increase its house building momentum in the face of Brexit and a possible skills gulf.

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Brexit, Skills Crisis, construction, construction industry, General election