Skills time bomb ticks louder

Brian Berry of the FMB explains some of the reasons behind the construction skills crisis, and considers the negative impacts the recent government recommendations on immigration could have, post-Brexit.

Few in this industry will be surprised to hear that the construction sector is facing a severe skills crisis. Recent survey evidence from the Federation of Master Builders (FMB) reveals that nearly all of the key occupations proved more difficult to recruit in the second quarter of this year compared to the previous three months. Two-thirds of firms reported difficulties hiring bricklayers and 60 per cent have had difficulties recruiting carpenters and joiners. In addition, nearly half of housebuilders believe the skills shortage is now a major barrier to their ability to build new homes.

We know that 400,000 people left the UK construction industry during the economic downturn, many of whom have never returned, while training levels dropped sharply and older workers continued to be lost to retirement — in effect a triple whammy. Furthermore, the industry’s ageing workforce means that around 400,000 further workers are expected to retire from the industry over the next five to ten years. Unless concerted efforts are made, this situation could get worse still. What’s more, with Brexit now just six months away there is a risk that skills shortages will further intensify if access to skilled EU workers is reduced. This is a particular issue for construction because the sector is more reliant than most sectors on migrant workers from the EU. Nine per cent of our construction workers are from the EU and in London, this rises to nearly one-third.

Given this, many in the industry have reacted with real concern to a report from the Migration Advisory Committee (MAC), published in September. The recommendations outlined in the report would be a real problem for construction. The sector has called on the Government to introduce a visa system that is not prohibitive in terms of the ability of small businesses to access EU workers with skills that are in short supply. Yet, the recommendation in the report is to apply the immigration system that currently applies to non-EU workers (the so-called Tier 2 system) to EU workers. This is a rather clunky, bureaucratic model under which employers have to find and sponsor migrant workers they wish to employ. We do not believe that this is a system that most small and micro employers will be able to navigate and for an industry like ours in which these size firms account for the bulk of employment, this is a real problem.

Under the recommendations, it may even be that some experienced skilled workers like bricklayers and carpenters won’t necessarily qualify for the Tier 2 route, if they can’t prove they have level 3 equivalent qualifications. When it comes to low-skilled workers, the report makes little or no allowance for them, though labourers are an absolutely necessary element the construction sector. The report clearly recommends that there should be no migration route for lower skilled workers apart from a potential exception for seasonal agricultural workers.

In the long run, the construction industry needs to step up and recruit and train many more people than we are currently. However training highly skilled home grown workers will take some years, and in a labour market with already high levels of employment, attracting sufficient new people into the industry will not be easy. The sector is already drowning in the midst of a skills crisis. It is therefore essential that we make sure that access to EU workers is not turned off overnight and that we have some ongoing access to EU workers who can make a real contribution to our industry.

We hope that the Government thinks very carefully when it decides which recommendations they will take on board from the MAC report. Construction is without doubt an industry of great strategic importance to the economy. If the sector finds itself further hamstrung by post-Brexit migration rules, it will be much harder to deliver the Government’s aspirations for housing and infrastructure and the knock-on impact on the wider economy will make post-Brexit economic waters all the more treacherous.