Why Tackling the Construction Skills Shortage is Only the First Step

By Steve Larkin, Director of Development Finance, LendInvest

It’s no secret that there is a skills shortage in the construction sector. It was one of the big talking points during the lead-up to the EU Referendum after all, the worries that a Leave vote would see the swathes of EU nationals that building firms rely upon departing these shores.

But the scale of the shortage is nonetheless surprising. The most recent State of Trade Survey from the Federation of Master Builders found that the number of construction SME employers trying to hire key occupations has never been so high.

More than two-thirds have had difficulty finding bricklayers, while around 63% have had issues finding joiners and carpenters. Almost half have struggled to hire plumbers.

It doesn’t matter what your housing targets for the nation are, whether it’s 30,000 new homes a year or 300,000, if you don’t have qualified people in place to build those homes then you will inevitably fall short.

That’s why it is so welcome that the government has not only acknowledged this problem, but outlined steps it will take to address it. It announced in its Industrial Strategy white paper that it would be launching a National Retraining Scheme to help equip construction workers with the skills they need, with an initial £64m invested in digital and construction training.

However, it would be a mistake to assume that the skills shortage starts and ends with those physically building the new homes. We are also in real danger of missing out on the next generation of property developers.

The declining fortunes of the small builders have been a defining feature of the last few decades in the property market. In 1988 there were 12,200 small builders active in the UK according to the FMB, but by 2014 that had plummeted by 80% to just 2,400.

Tackling the shortage in skilled construction workers is only the first step

It’s no coincidence that this has also been a time of stagnating property production.

The government is only too aware of this and has attempted to remove some of the most often-complained about barriers facing small developers, such as the difficulties with accessing land.

However, if we are not only to stem the tide of would-be developers turning their back on the property world, but actually encourage more to join, then swift action needs to be taken to address the palpably unfair playing field that property SMEs face.

The fact is that SMEs in other industries enjoy far greater tax breaks and government support than those in the property world, from access to the British Business Bank to eligibility for EIS and SEIS schemes to incentivise investment.

It’s little wonder that smart entrepreneurs are more likely to put their skills to work in industries where there is greater support on offer than property. But the truth is that we can’t afford to lose them to other sectors.

Of course there’s more to stimulating the numbers of property developers than simply revamping the tax set up. As well as financial assistance, we need more skills-focused help; just as the government is ploughing money into helping train the bricklayers and carpenters of tomorrow, so to do we need investment in helping developers put together the skills they need to manage projects properly.

It’s something that we are looking to address through the LendInvest Property Development Academy. We have been holding courses across the UK since 2016, helping would-be developers build the knowledge necessary to make a success of their projects.

The level of interest in these courses has been telling; there are so many property professionals who want to develop the homes that the UK so desperately needs, but there simply isn’t enough help in place to get them up and running.

Our academy can only be a first step – the onus is now on the government and other industry figures to do more to encourage those who want to help property development projects but currently aren’t.