The industry in London and the south east could face a severe shortfall of labour and professional skills as early as next April as pipeline schemes come on stream, according to a report by KPMG and the London Chamber of Commerce and Industry.
The Skills to Build report suggests that the median figure for the labour required to deliver projects in London and the south east in 2014 is 430,706, but that as many as 604,903 could be needed on site to deliver a “bulge” in pipeline projects by April 2015.
The median figure for the labour requirement the whole of 2015 is lower, at 585 852. But – given the industry’s limited training capacity – this still means that construction will be heavily dependent on absorbing labour from other countries.
And as the capacity to train home-grown construction workers is inadequate for 2015 levels of output, the report says that “the further expect future growth in construction output will further exacerbate this deficit”.
“Unless the supply of labour is increased, house building targets will not be met and the delivery of large infrastructure projects will be jeopardised,” the report concludes.
The report says there are training deficits in 23 of the 26 the ONS Standard Occupational Classification codes relating to construction, suggesting that current training does not adequately supply the skills employers need.
The warning comes ahead of an unprecedented industry summit on the issue to be held on 24 November at the QEII conference centre in London on how the industry can find solutions to the training and recrtuiment shortfall. Organised by the CIOB, the Inspiring the Future of Construction conference will hear from key industry figures including Sir John Armitt, chairman of the Olympic Delivery Authority, and Peter Hansford, the UK government’s chief construction adviser.
Pipeline value of projects in planning by county 2014-17 (£bn)
Total labour requirement of projects in planning by county 2014-17
It also highlights particular anomalies in construction skills training, such as the high demand for dry-lining skills and a near absence of training schemes and qualifications for them.
Phil de Montmorency, a coordinator for jobs and skills at the London boroughs of Wandsworth and Lambeth, is quoted as saying: “Our labour forecast indicated that Nine Elms Vauxhall will require nearly 300 dry-liners in the coming years. Yet, existing apprenticeship frameworks dedicate a very small amount of time to dry-lining training, instead focusing on traditional plastering methods.”
Interviews with major contractors also throw light on problems with S106 agreements on jobs and training for local labour, in particular with restrictions on the postcodes where labour where can be drawn from.
Nigel McKay, procurement and Innovation lead for Lend Lease at the Elephant and Castle regeneration said: “Our Section 106 agreement stipulates that trainees should be from Southwark and be previously unemployed. However, there are many other major developers working in the borough, all with the same targets and all fighting for the same people. Given that Lambeth, Greenwich and Lewisham are a short distance away and have people wanting construction work in Southwark, it would make more sense to have a more joined up approach across the London boroughs about S106 targets, based on production capacity within each area.”
The analysis suggests that on average 20% more workers will be required on average to meet pipeline demand in 2014-17 than were needed in 2010-13. But the industry saw 400,000 people made redundant or otherwise leave the industry in the recession, while a further 400,000 are expected to retire over the next five to 10 years.
Labour prediction by SOC code, to deliver pipeline of projects for 2014-17 in London and south east
Shortage of skilled manpower is a common problem in many countries. US depends on Mexicans and other neighbors, Singapore/Malaysia depends on Indonesians, Bangladeshis, Indians, Pakistanis and other imports. In US/Malaysia many are illegals that provides opportunities for corruption and bribery which appears to have become a commonly accepted practice with authorities closing one eye while promising effective action.
These illegals are also perceived to be major contributors to low costs due to their low wages and also for corruption.