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Britain has ambitious plans to build new infrastructure ranging from wind farms to data centres and new homes after decades of under-investment. The problem is that it cannot find the workers.
Large projects and utilities companies including Hinkley Point C, National Grid and Thames Water have warned in recent months of the impact of labour shortages on cost, future delivery and their ability to improve services.
Simon Bowen, chair of Great British Nuclear, the public body responsible for delivering nuclear power plants, said before the election was called that the civil and defence nuclear sectors would find it “very challenging” to secure the roughly 138,000 new workers they needed by 2030.
Last month, the chief executive of the group behind Manchester’s Co-Op Live arena blamed multiple failed attempts to open the £365mn venue on a Brexit-fuelled lack of construction workers.
“We were paying people two and three times and we couldn’t find people to work, it was crazy,” said Tim Leiweke of Oak View Group of the project’s final weeks.
The number of construction workers in the UK has fallen by 14 per cent to 2.1mn since 2019, showed official data published last month. About 38,000 vacancies were advertised every month in 2023, according to the Construction Industry Training Board.
Brexit and the surge in inflation have worsened the shortage, with skilled professionals opting to return to their home countries or chase better pay.
“We just don’t have the labour,” said Noble Francis, economics director at the Construction Products Association, a trade body. “We have an ageing construction workforce . . . and the truth is that some of the big building firms and small specialist subcontractors already can’t find the staff.”
The skills shortage in construction spans all specialisms and layers, from senior project managers to the steel fixers, welders and labourers needed on site.
It is global and local. Many workers are being poached abroad, particularly to the Middle East — a trend cited by MPs last month as they warned the UK lacked the skills and capacity to deliver on its £805bn worth of infrastructure spending plans, including the flagship HS2 rail link.
Juliano Denicol, associate professor in infrastructure at University College London, said all big UK projects were struggling to find skilled workers, especially senior leaders.
In Britain the skills shortage has been exacerbated by domestic workers retiring early and EU workers returning home. Even before new visa rules came into force in 2021, many had returned to their home countries or gone to other demand hotspots in the bloc.
CPA analysis of official data showed more than three-quarters of the EU construction workers that Britain had lost in the past five years were between 25 and 39. The post-Brexit requirement to sponsor a visa for workers coming from the EU is making it harder for construction groups and projects to replace them.
Shadow home secretary Yvette Cooper said on Sunday Labour planned to reduce work-related immigration if it were to win power on July 4. Francis said such a move, following the current Conservative government’s efforts to cut legal net migration, would be “the last thing industry needs”.
On Monday, the Conservatives doubled down on those efforts with an announcement that the party, if it were to win the election, would introduce an annual cap on migration.
Nor are apprentices filling the gaps: there were 31,000 construction apprentice starts each year over the past five years, but more than 40 per cent dropped out over concerns about the quality of training amid tight build schedules, the CPA said.
As efforts to attract young recruits flatline, many established workers are chasing better pay. Wages in construction were 22 per cent higher at the end of 2023 than at the start of 2019 despite the recent slowdown in the two largest building sectors, new build housing and repairs and maintenance, according to the CPA.
Steve Turner, executive director of the Home Builders Federation, a trade body, said labour shortages were not “top of the list of concerns at the moment”. But he added: “If we are going to match the next government’s housing targets . . . we will need to recruit tens of thousands more people across all trades.”
Richard Risdon, UK and Europe managing director at consultancy Mott MacDonald, said the existing pool of labour in construction was “simply not big enough to deliver”.
“The skills shortage won’t be achieved by individual companies alone so the next government will need to address this as a national imperative,” he added.