6th August 2020
Could investment in apprenticeships finally solve the skills shortage?

The construction sector has been receiving a great deal of attention in recent government funding announcements, and we’re delighted that construction is being recognised for its vital role in rebuilding (quite literally!) the economy following the COVID-19 pandemic.

We’ve seen announcements of huge investment in infrastructure, a Stamp Duty cut to promote property market activity and boost the housebuilding sector, and measures to support job creation, such as the new Green Homes Grant.

All of the above are of course extremely welcome, providing vital funding to propel the construction sector into recovery and beyond. However, another recent measure, announced by the Chancellor in his Summer Economic Update of 8 July, should also come as music to many ears within the industry: an investment of £1.6bn to boost employment support schemes, training and apprenticeships for young people.

The skills crisis – a history

On 6 July, leading construction union Unite warned that there would be no ‘build build build’ (as the Prime Minister recently pledged) if swift action was not taken to correct a long-standing crisis in skills and apprenticeship development[1]

The skills crisis has already been a topic of discussion and research for many years. In 2016, the Construction Industry Training Board (CITB) predicted that 230,000 more skilled construction workers would be needed by 2020, and called for investment in apprenticeships to avoid an impending skills crisis[2]. Meanwhile, earlier this year, the Royal Institute of Chartered Surveyors (RICS) predicted that the UK could need over 200,000 more skilled workers by the mid-2020s – suggesting that the issue has not been fixed in the intervening years[3].

What’s more, much of the construction workforce is approaching retirement, with 22% of workers over 50 and 15% in their 60s. And, to date, there simply haven’t been enough recruits to replace them[4].

Then came the pandemic

The severe economic impact of the coronavirus pandemic, and the ensuing shutdown of construction businesses during lockdown, has further exacerbated the issue. A survey of 304 apprenticeship providers, conducted by further education news website FE Week, revealed that just 2,693 apprenticeship starts were achieved during the month of April – missing the planned target of 13,732 starts by over 80%[5]. What’s more, apprentices joined the millions of employed workers who were furloughed under the Coronavirus Job Retention Scheme, significantly disrupting their education.

Training for recovery

The £1.6bn investment in training and apprenticeships will take the following form:

  • Apprenticeship bonuses

Businesses will receive a £2,000 bonus for every apprentice they take on under the age of 25 and £1,500 for every apprentice over this age. This is on top of the £1,000 already provided for apprentices between the ages of 16-18, and those under 25 with an Education, Health and Care Plan (EHCP).

  • Boost to traineeships

£111 million will also be provided to triple the number of traineeships available during 2020-21, as well as a further £17 million to boost the number of sector-based work academy placements, also throughout 2020 and 2021.

Outside of these schemes, further measures will include £900 million earmarked for upskilling and doubling the number of work coaches in Job Centres, and a £32 million investment in the National Careers Service.

An opportunity to be taken

While the measures explored above don’t apply exclusively to the construction industry, these financial incentives present construction businesses with the opportunity to onboard more apprentices at a time where financial circumstances may ordinarily prevent them from doing so. As many experts have commented, increasing training and apprenticeship opportunities within the industry is the only way to close the skills gap and get the industry on its way to a brighter and more secure future.