London and the South-east could be facing a 20 per cent labour shortfall by as early as April 2015, according to a new report, with £96bn-worth of projects set to come through the pipeline between 2014 and 2017.
According to Retail Week, the report, Skills to Build, published by the London Chamber of Commerce and KPMG, has warned that a limited supply of construction workers could threaten the London mayor’s housing target and key infrastructure projects across the capital and the South-east.
Migrant workers are “vital” for filling the immediate skills gap in the sector, according to the research, but in the long term construction firms must be able to rely on consistent, domestically trained labour.
Source: KPMG / LCCI
It estimates that on average 20 per cent more workers than the 341,638 that were needed between 2010 and 2013 will be required between 2014 and 2017 to meet demand in the capital.
According to the research, 604,903 workers will be needed on London sites as of April 2015 to deliver projects currently in planning, and a 51 per cent average increase in training provision will be required to meet demand for labour in 2015 – a gap of more than 14,800 workers.
There will be a significant undersupply of competency-based training for construction managers, roofers, bricklayers, scaffolders, electricians, labourers and non-construction operatives and training will be insufficient to meet the immediate demand for construction labour, without absorbing labour from other areas such as Europe.
1) Infrastructure UK should push for skills and employment requirements to be included in public procurement contracts, aimed at both tier one contractors and suppliers.
2) Local authorities should use more flexible definitions of local labour when setting section 106 requirements so apprentices can move across boroughs and complete their training.
3) Schools should be evaluated on progression into apprenticeships and employment as well as further academic study.
4) The Skills Funding Agency should get industry body representatives to redesign training and apprenticeship frameworks to include modern methods of construction.
5) Local and regional authorities should keep and share a pipeline of future projects.
With training levels failing to meet 2015 demand, the expected growth in construction output will exacerbate this deficit.
Writing for Construction News, KPMG UK head of infrastructure, building and construction Richard Threlfall and LCCI chief executive Colin Stanbridge said that with London’s population set to grow by the equivalent of Birmingham’s population over the next decade, a lack of skilled workers could pose further problems to developing the housing required in London.
Source: KPMG / LCCI
They said: “Government and major clients need to embed training requirements within procurement contracts so that training is no longer a ‘nice to have’, but becomes an operational requisite for successful construction businesses, just as we have seen with health and safety rules on site.
“More needs to be done to encourage young people to work in construction, but not all training providers are training people with the modern skills required by a rapidly changing industry.
“Tackling this requires measuring and rewarding schools and colleges based on students’ progression into training and work.”
In Numbers: pipeline and skills shortages
The total pipeline value for projects currently in the planning system is £95.7bn over the four years, of which housing represents the single largest sector for both output and new project starts.
A total of £39.5bn-worth of housing output is expected to be delivered over this period, of which £13.2bn will be in 2015 alone.
The report warns that housing has a shorter planning approval timeline compared with other types of construction projects, which it predicts will lead to housing output increasing by a great proportion over the period.
Of the 604,903 construction workers needed as of April 2015, 40,294 electricians are required as well as 41,409 plumbers and 50,758 construction managers.