On March 26th, the chancellor will present her 2025 Spring Statement.
The 2024 Spring Budget, delivered by the previous government, included a focus on construction and the skills, training and apprenticeships needed to sustain a skilled workforce in the sector.
Construction employers will be hoping for a continuation of this commitment to fill a widening skills gap and futureproof the industry. Workforce challenges across construction are impeding progress and making government targets for housing more difficult to achieve.
Current workforce challenges in the construction sector
Labour shortages
In its ‘Business insights and impact on the UK economy’ report published in January 2025, The Office for National Statistics stated construction was the third highest industry experiencing worker shortages, with 24% of firms struggling to recruit.
A report published by the CITB (Construction Industry Training Board) in 2024 highlighted the need for 251,500 extra workers to meet UK construction output by 2028. This equates to 50,300 per year which is a significant increase on the 44,890 proposed in the 2023-27 outlook. The report identified private housing, infrastructure and repair and maintenance as the major sectors with demand.
An ageing workforce
The ageing demographic in construction is not only a concern for filling the workforce gap when older workers retire, it also has an impact on recruitment. Young people don’t see construction as a modern career path due to its ageing workforce, despite the industry’s advancements in state-of-the-art technology and innovation.
A PBC Today article published in October referred to forecasts by the Construction Products Association (CPA) that at least 500,000 workers are set to leave the construction workforce within the next fifteen years due to the spike in employment in the 50-64 age range in 2019.
In 2023 The UK Trade Skills Index reported that 35% of the construction and trades workforce was aged over 50: “This ageing workforce and the physical ability of some older workers to continue in the sector until they reach the official retirement age of 67 presents a challenge for the construction sector. Without a pipeline of young talent in place, the UK will not be able to meet construction demand once this demographic reaches retirement age.”
Training gaps
A decline in apprenticeship enrolments, and high dropout rates, have contributed to significant training gaps.
According to CITB, around 33,000 people started construction apprenticeships in Britain in 2023/24. “These figures have improved since the pandemic but are still a long way short of what we need. We estimate that apprenticeship starts would need to increase two or three times on present levels to fulfil recruitment needs – even taking other routes into industry into account.”
Research by NOCN Group and the British Association of Construction Heads found the drop-out rate for construction apprenticeships is at 47%, and only 8,000 new apprentices completed their training; a drop in the ocean for the 90,000 new workers needed.
Enhanced training programs have also been identified as critical to attracting new talent. Vocational training programs provided by technical schools and colleges that include classroom teaching and practical experience, workshops and specialised short courses for upskilling, and industry certifications that enhance a worker’s employability, are all examples of training programs that could be instrumental in attracting new talent.
Government initiatives for tackling the construction skills gap
In November 2024 the government announced the launch of a new skills hub to ‘get Britain building’.
5,000 more construction apprenticeship places were made available each year due to a £140 million industry investment across 32 new Homebuilding Skills Hubs. The hubs will provide realistic working environments for training key trades.
The hubs will work hand-in-hand with Skills England, a body that was set up in 2024 ‘to bring together key partners to meet the skills needs of the next decade’. Skills England is tasked with aligning training provision with industry needs. Construction is one of 10 sectors prioritised by Skills England for initial engagement on what training should be accessible through the Growth and Skills levy. The findings are due to be published in the early part of this year.
The government is also committed to infrastructure investment, delivering over £600 billion of planned public sector investment over the next five years. Failure to tackle the challenges facing recruitment and training will impact the industry’s ability to meet demand; a skilled workforce is central to delivering these projects.
What are industry leaders looking for in the Spring Statement?
The response of industry leaders to the 2024 Budget’s focus on filling the skills gap, training and apprenticeships was broadly positive, although there remains an underlying concern that current measures may not be enough to sufficiently address the scale of the skills shortage.
Commentary by industry leaders was made with a keen eye on this month’s Spring Statement when longer-term investment plans will be outlined:
“I encourage the Government to build on today’s statement and provide apprenticeship incentives for areas with skill deficits, allowing flexibility in levy fund spending to target specialist roles.” Adrian Attwood, Executive Director, DBR
“It would have been encouraging to see more focus on Skills England and not simply kick the can down the road. We must address the skills crisis head-on to ensure the UK’s infrastructure strategy is realised by a capable and forward-thinking workforce.” Fraser Robb, Managing Director, Perega
“Skills England has a vital role to play here and I hope we will see more to come. By promoting digital skills training across the industry, we can empower construction professionals to work smarter, faster, and more accurately, building a resilient, tech-enabled housebuilding sector ready to meet the country’s needs.” Rob Norton, UK Director, PlanRadar
The short and long term outlook
The government’s commitment to filling the skills gap in construction, and the focus on training and apprenticeships, will go some way to alleviating the immediate workforce pressures. Promoting construction as a modern career path will be key to the success of engagement with younger talent.
It is long-term sustainability that construction leaders will be looking for in the Spring Statement. A steady pipeline of skilled workers and support for future industry growth are essential for engaging the 251,500 workers the industry needs by 2028. The longevity of bodies such as Skills England and continued infrastructure investment will be key areas for construction sustainability.
In conclusion, while addressing the pressing need to prioritise construction skills in the upcoming Spring Statement, it’s crucial to also consider the recent changes to UK employment laws that are impacting the construction sector. Notably, the Employment Rights Bill introduces significant reforms, including the extension of guaranteed hours to agency workers, restrictions on zero-hours contracts, and enhanced protections against unfair dismissal. Additionally, the National Minimum Wage is set to increase on April 1, 2025, with the National Living Wage rising by 6.7% to £12.21 per hour, and corresponding increases for younger workers and apprentices. These legislative changes, alongside the existing skills shortages, present both challenges and opportunities for our industry.
With so many changes on the horizon, staying ahead of employment law updates is key. That’s why we’ve put together a simple, easy-to-follow guide to help you understand what’s coming and how it could impact your business. Download it here to make sure you’re prepared and staying compliant.
