Capacity in the homebuilding industry Contents


The declining and aging workforce and the skills gap

127.So far this report has highlighted a range of challenges that must be overcome if the country is to build the homes that it needs. However, even if they are all addressed, it will matter little if there is not the labour force to physically build homes. Skill levels and workforce capacity are arguably the single biggest challenge facing the homebuilding industry, but one with the least obvious solutions and one that individual stakeholders cannot address on their own. The Federation of Master Builders highlight research by the Construction Industry Training Board (CITB) which predicts that, at projected rates of growth, the industry will need to recruit a further 230,000 workers before 2020. At the same time the construction workforce is ageing and 400,000 workers can be expected to retire over the next five to ten years.139 The CITB argue that bricklaying requires a twenty per cent increase to its workforce (14,350 to an existing workforce of 72,000) and carpentry and wood trades require an additional 21,600 workers to an existing workforce of 273,000 (an increase of eight per cent).140

128.As part of our inquiry, we visited Berlin to learn about their approach to home building. We were told by the Association of German Building Industry that “No-one grows up wanting to be a builder”. We have found a similar issue in the UK. In 2016 Mark Farmer was commissioned by the Construction Leadership Council, at the request of Brandon Lewis and Nick Boles (the Ministers for Housing & Planning and Skills respectively at the time) to undertake a review of the UK’s construction labour model. His report, ‘Modernise or Die’, identified a poor industry image. He cites an industry that is “struggling with its public facing image which is influencing the career decisions of the next generation of potential workers”. A key factor in this image problem is the public perception of low job security, unpleasant working conditions and poor health and safety. Mr Farmer also highlights the “endless raft of ‘cowboy builder’ media exposés” that contribute to construction not being seen as a viable or attractive career choice.141

129.Mr Farmer identified a dual problem for the homebuilding industry: skills and training, and the need for innovation. He told us that “We have so big a challenge around the declining workforce in construction that we cannot recruit or retain our way out of it. We have to be prepared for a reducing workforce, which means we need to be able to build more with less”.142 He argues that it is imperative that home builders embrace innovative methods such as off-site construction and pre-manufacturing. The Farmer Review also identifies the opportunity of using new methods of construction to appeal to digital generations who may be less inclined to pursue careers using more traditional building methods.143

130.We heard that addressing the skills crisis cannot be done by individual actors in the industry. David Jenkinson from Persimmon Homes told us that his company was investing in training and that at any one time, fourteen per cent of Persimmon’s staff were in training. However he conceded that despite training over 1,000 people, this would not be enough to meet the required increase in output.144 We therefore welcome the work by the CITB and the Home Builders Federation to deliver the Home Building Skills Partnership, which brings together over forty home builders to tackle the industry’s skills needs. The partnership will support 3,500 construction businesses, and train 45,000 new entrants and 1,000 experienced workers by 2019.145 John Slaughter from the Home Builders Federation told us that “The idea is to bring the industry together for the first time, to work collaboratively in meeting future skills”.146

131.The Government recognises the issues of a shrinking workforce and an emerging skills shortage. In the housing White Paper, it announced changes to training courses, its intention to work with the Construction Leadership Council to encourage developers to invest in training, and a review of the CITB’s purpose, functions and operations.147 We believe that the review of the Construction Industry Training Board must produce concrete proposals for action, particularly on improving Further Education routes into the construction industry and the development of a clear cross-Departmental strategy. We note in this context the conclusions of the Business, Energy and Industrial Strategy Select Committee’s report on the Government’s Industrial Strategy Green Paper:

A skilled workforce is an essential foundation of economic success. Given the weaknesses identified by the Government in the UK’s skills base, the proposals contained in the industrial strategy Green Paper leave much to be desired … It is deeply disappointing that the Green Paper fails to outline any detailed proposals for discussion in relation to encouraging the uptake of STEM [Science, Technology, Engineering, Mathematics] subjects, and improving the skills of those already of working age.148

132.Addressing the skills shortage and the declining workforce is essential to ensure a continued and sustainable increase in the number of homes built. The Government’s review of the Construction Industry Training Board should be monitored, and we expect the Government to come forward with practical measures within a year to encourage new entrants into the industry and to retain those already working.

Leaving the European Union

133.Much of the evidence we received about the skills shortage also highlighted the potential for Brexit to exacerbate the situation. David Cowans from the Places for People housing association emphasised that the skills crisis pre-dates the decision to leave the EU, but it could worsen the situation: “Brexit or no, we had this problem before. Was the influx of foreign workers a sort of sticking-plaster for that? Yes, it was. If you take it away, will it get worse? Very definitely. Should we do something about training and development of construction staff generally? Yes.”149 Likewise, Sarah McMonagle from the Federation of Master Builders told us that:

We have not left the EU yet, but even as we approach that point, whether it is in two or three years or longer, I imagine that it could have an impact even in the run-up. If I were a Polish bricklayer now, looking to leave Poland and go to work somewhere else in Europe, I probably would not come to the UK. I might go somewhere else where I know I would be welcome, could maybe have a career for an extended period and would not have my status at risk.150

134.Workers from the EU can provide an important cushion to cyclical workforce fluctuations. A report by the London Assembly’s Economy Committee estimates that in London alone, around a quarter (88,000) of all workers in construction were born in EU countries.151 When we put this figure to the Housing Minister, Mr Barwell stated that “My perception would be that on most building sites in London the figure is significantly higher than that”.152 While the level of EU-born workers will vary across the country, London undoubtedly faces the largest challenges both in terms of required development and the numbers of EU workers. We are therefore concerned that large numbers of an already stretched workforce face an uncertain future. The importance of EU labour to the construction industry should be taken into account by the Government in setting priorities for the Brexit negotiations.

139 Federation of Master Builders (BLD071) para 23

140 Construction Industry Training Board (BLD072) para 7

141 The Farmer Review of the UK Construction Labour Model, Modernise or Die: Time to decide the industry’s future, (October 2016), page 40

142 Q214

143 The Farmer Review of the UK Construction Labour Model, Modernise or Die: Time to decide the industry’s future, (October 2016), page 48

144 Q83

145 Construction Industry Training Board (BLD072) para 18

146 Q24

147 Department for Communities and Local Government, Fixing our broken housing market, Cm 9352, February 2017, paras 2.31–2.34

148 Business, Energy and Industrial Strategy Committee, Second Report of Session 2016–17, Industrial Strategy: First Review (HC 616), para 115

149 Q24

150 Q24

151 London Assembly Economy Committee, EU Migration, February 2017, page 4

152 Q418

28 April 2017