Construction Sector: Skills Shortage

Question

Asked by

To ask His Majesty’s Government what steps they are taking to address the skills shortage in the construction sector and to ensure a steady future supply of skilled workers.

My Lords, in 2025, the Government announced a £625 million investment to train up to 60,000 more skilled workers in construction. This includes £100 million for skills bootcamps, £98 million for industry placements, £100 million to establish 10 construction technical excellence colleges, a £90 million uplift for 16-19 courses and £75 million for adult retraining. Construction will also benefit from new foundation apprenticeships, with employers receiving up to £2,000 for each apprentice they take on and retain in the industry.

My Lords, I declare an interest as chairman of Balfour Beatty Plc. I welcome the steps that my noble friend the Minister outlined. Attitudes to the sector are outdated and sometimes ill informed. Attitudes toward careers in construction and infrastructure are contributing to the reduced pipeline of people coming into the sector. Almost half—47%—of young people report that construction and infrastructure careers are not even mentioned in their school’s career advice. I started life in the steel industry in Scotland as an apprentice, and I am proud to say that. What steps are being taken to ensure that career guidance in schools accurately and positively represents the significant opportunities in this important sector for Britain?

My noble friend is absolutely right. There are well-paid, secure jobs in the construction industry. One of the benefits of my role is that I quite often get the chance to meet young people who have made that decision. We need to make sure that that message gets through in the improved careers education that we are providing in schools. Also, as part of the construction support package, we are delivering targeted communications to raise awareness of those construction careers and promote the sector as a pathway to good jobs and progression. That will increasingly focus on young people, alongside tailored promotion for women and for those returning to work, in order to spread more widely the message that my noble friend has ably communicated.

My Lords, I welcome the Government’s announcements about apprenticeships, particularly in the construction industry. Given that small and medium-sized businesses deliver the bulk of the construction infrastructure, particularly housebuilding, in the country, what support are the Government going to give to those smaller-sized construction firms that we dearly need across the country? These small business are often the ones that find government red tape the most difficult when it comes to apprenticeships.

The noble Lord is right. What is more, of course, small businesses are often the businesses that offer apprenticeships to young people and to people from disadvantaged backgrounds. That is why Skills England is focused on engaging with small businesses to help them understand the range of opportunities there. It is why we are introducing a new apprenticeship hiring payment of £2,000 for small businesses that take on 16 to 24 year-old apprentices. It is why, from August this year, we will also fully fund apprenticeship training for small businesses for eligible people aged 16 to 24. It is why no employer is required to pay employer national insurance contributions for employees under 21 or apprentices under 25, and it is why the Construction Industry Training Board’s new entrant support team is working to provide practical support to employers, particularly SMEs, who are recruiting apprentices.

My Lords, what role will the Government take in directing the infrastructure projects that they are responsible for to ensure that the companies participating in those projects take enough apprenticeships and give the proper training via the longer opportunities which those companies can naturally provide?

The noble Lord makes a really important point about the power of government procurement. Many of those contracts already require support for training, and particularly apprenticeships. For example, in the estates strategy in the Department for Education, we expect, if I remember rightly, 8,000 additional training places to be provided as a result of the investment that we are putting into maintaining and rebuilding schools.

My Lords, does my noble friend the Minister agree that, as well as looking at national infrastructure, it is important to get companies involved locally through organisations such as UTCs, as in Doncaster, where they have been very effective by not only having career guidance but putting on courses that are relevant to the local area? Combined with that, could more be done through local procurement, with local authorities, for example, requiring more apprentices to be employed?

My noble friend makes a really important point. It is why local skills improvement plans, of which the second round are due to be published quite soon, identify where there are local skills needs that need to be met locally, and why UTCs, as she identified, and the strong partnerships that construction and technical excellence colleges are developing between colleges and employers locally are really important ways of reflecting the local need for construction skills into the provision of training opportunities for young people.

My Lords, the construction sector is suffering from an acutely ageing workforce, with 35% over the age of 50. This means that 750,000 workers will retire over the next 10 years. At the other end of the spectrum, numbers of apprenticeships are falling, with more than half of those taking them dropping out before they complete their training. What can be done to attract more young people and, in particular, improve apprenticeship outcomes?

We have a target to increase by 50,000 the number of young people starting apprenticeships, after 10 years in which that number fell by 40%. That is the reason behind some of the support that I have identified, including full funding for small businesses, the hiring incentive for businesses taking young people into apprenticeships, the support being provided through colleges and the increased recruitment of people who have had experience within the industry into our colleges, to ensure that young people get the best and most up-to-date information about those training opportunities. All those things are part of the construction skills package that we have focused considerable investment on, as I have demonstrated.

My Lords, the noble Lord, Lord Campbell-Savours, is taking part remotely. I invite the noble Lord to speak.

My Lords, with the increased use of solar technology in construction and with the drop-out among construction and engineering students due to the emphasis on academic skills, could we promote two separate initiatives? The first, as a priority, is viring students into solar-related trades. The second is promoting the use of specialised solar engineers from abroad to train others and clear any backlog that develops in solar fitting programmes. We need to unleash the non-academic but inventive skill set that often lies behind Britain’s successes.

My noble friend is right about some of the new areas within construction where we need to support training. I am sure he will be pleased to know that one of the new apprenticeship units that we launched in April, where employers can use their growth and skills levy to fund something other than a full apprenticeship, includes one in solar PV installation. That is an example of how the Government are recognising the changing challenges in construction and supporting it through the growth and skills levy.