Change the rules to help solve the skills shortage

Construction workers should be listed as occupations with official shortages says Michael Thirkettle, chief executive of property and construction consultant McBains Cooper.

Michael Thirkettle

At a time when the shortage of housing is a chronic problem, only by reconsidering immigration rules will we have any chance of meeting the government’s housing targets.

The prime minister’s announcement on Wednesday to enable developers to build more low-cost subsidised starter homes for sale is a welcome one. But, on its own, the announcement should not be seen as a magic bullet that will solve the housing crisis. It’s no good putting construction companies in a theoretical position to build if they can’t recruit the workers they need to do so.

Forecasts by UCATT suggest that the industry will require more than 200,000 new workers over the next five years – the timeframe the government has set to build these new starter homes (and to build a million new homes in total, as the housing minister recently stated as an ambition).

However, as a result of the recession, some 300,000 people left the building trade between 2008 and 2010. That’s left a huge void in terms of a skills shortage, particularly for the likes of experienced bricklayers and electricians. Training apprentices takes time: someone starting a bricklaying apprenticeship today will not be fully trained until 2019. What’s more, fewer youngsters are completing apprenticeships. In 2013/14 the figure was 8,030, the fifth year in a row that the number had declined.

Fewer skilled workers and a logjam in apprenticeships also means the cost of labour is higher, at a time when there is an urgent need to build affordable housing.

Earlier this year, the Manpower Group reported that in London, one in three of the largest construction companies was having to turn down opportunities due to a shortage of skilled labour.

We have seen evidence of this problem on the ground. A London housebuilder that we have worked with for many years told us of a central London housing project where they tendered subcontract packages for various work. Only one out of nine steelwork subcontractors, two out of 15 carpenters and one out of seven groundworks subcontractors returned the tender due to lack of capacity in terms of resources. They also report acute shortages on the management side when attempting to employ contracts managers and quantity surveyors.

In another example, a £55m construction of 250 apartment blocks, has been delayed by eight months on a two-year contract, because the contractor says skilled labour is being paid more but working fewer hours. And in the north west, a major UK company calculates that the skills shortage is contributing to pushing prices up by 40% over and above other locations in the UK.

These examples illustrate why the building industry requires a highly flexible, in part itinerant, workforce to call on and why it is vital that the sector is able to recruit skilled workers from outside the EU.

That’s why the government should allow skilled construction workers such as bricklayers and electricians to be listed as occupations with official shortages. This would allow more recruitment from outside the EU, which is impossible under current stringent immigration rules.

Jobs currently defined by the government as shortage occupations include the likes of classical musicians and ballet dancers, so it is baffling that a major plank of housing policy could be derailed by failing to recognise skilled construction workers in the same way as occupations such as these.