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Why failure of apprenticeships reforms spells trouble for small business

skills gap


Skills shortages in construction have been well documented, and the new report by MPs suggesting that reforms to the apprenticeships programme have failed to deliver was the latest disappointing news on this front for the industry.

The report, by the Public Accounts Committee, found the number of apprenticeship starts fell by 26% after the apprenticeship levy was introduced in 2017 and, although the level is now recovering, the government will not meet its target of 3 million starts by March 2020.

Construction desperately needs new blood.  According to the Construction Industry Training Board (CITB), the industry needs to fill some 168,500 new jobs over the next five years, and grow much more of its own domestic workforce, given likely limits on future access to migrant workers after Brexit.

Figures from the Office of National Statistics (ONS) show EU nationals comprise a crucial slice of the construction workforce – they account for around 8 per cent of all construction workers in the UK, and a huge 28 per cent in London.  How will firms cope with what could ostensibly be a loss of more than a quarter of their workforce?

Meanwhile, the sector is being squeezed at the other end.  The ONS found there was a 13% increase in the number of workers aged 45 and over in the construction industry between 1991 and 2011, while non-UK nationals are younger (18% aged 45 years and older) compared to UK-born workers (47% aged 45 years and older).

In 2011, it was estimated that one in every five UK-born construction workers were aged over 55, meaning that by the year after next, those people will nearly have reached retirement age – about the same time that any limits on migrant workers could kick in.

It means we could be caught in a perfect storm on the recruitment front, at a time when the industry could finally be finding its feet after a Brexit deal.  The latest construction output figures show the industry is still performing sluggishly because of the uncertainty over EU withdrawal, so the last thing it needs is a recruitment crisis when the market does pick up.

What’s more, it also puts the government’s housebuilding targets at risk.  In a survey of more than 400 housebuilders carried out by McBains earlier this year, less than half of respondents (48%) thought the Government target of building 300,000 homes a year on average by the mid 2020s is achievable.

Of those who don’t think the target is achievable, the second most popular reason for it not being achieved was not enough skilled labour (40% of respondents).

So what needs to be done?  As the building trade bodies have suggested, large firms are only allowed to pass 25 per cent of levy vouchers down through the supply chain to smaller firms but this should be increased to 100 per cent, as it’s the smaller constructors – often sub-contracted by large companies – that train the majority of apprentices.

At the same time, there could be conditions attached to ensure that these firms are training apprentices in the trades that are currently most at risk from skills shortages, such as carpentry and bricklaying.

Any further reforms such as these are likely to take time to implement – and take time to bed in (it takes around three to four years to fully train a bricklayer for example).  In the short-to-medium term the industry needs to be able to continue to access migrant labour in a number of key site-based professions.

That’s why the government should, in the interim, add skilled construction workers in the trades that are most experiencing severe shortages (such as bricklaying and carpentry) to its shortage occupation list and introduce short-term temporary visas for migrants meeting these criteria.

Clive Docwra is Managing Director of McBains, a consulting and design agency specialising in property, infrastructure and construction with operations in the UK and Europe



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