The Trades Crisis
Helen Booth, director of the HomeServe Foundation, explores the risks for trades on the road to recovery for UK PLC.
Without government intervention right now, the UK’s economic recovery from COVID will be blighted by a construction and trade skills crisis. At the HomeServe Foundation, the not-for-profit arm of HomeServe PLC, we commissioned the ‘UK Domestic Trade Skills Index’ from Capital Economics, an in-depth new quarterly barometer of the sector to explore this in more depth – and what we’ve discovered can only be described as a “perfect storm”.
It shows that a chronic shortage of key trades like plumbers, electricians and carpenters will hamper Britain’s economic recovery – and certainly its growth – out of the pandemic over the next ten years. But more than that, if not addressed it could lead to home repair bills and house prices soaring, and the government missing out on its ambitious house building, green energy and Net Zero targets.
What are the key findings?
Put simply, the UK must urgently expand its construction and trades apprenticeship schemes.
We need 1.25 million more construction and trades workers by 2030 and coupled with that we need to create 305,000 new construction trades apprentices to fill the void left behind by an ageing workforce, COVID-hit skills shortage and a drain of European skilled labour.
Within the construction sector, our report reveals a need to recruit 228,000 trades skills apprentices. Just under two thirds (61 per cent) of those are plumbers, electricians and carpenters.
Without an action plan to tackle this projected chronic lack of trade skill apprenticeships, the shortfall will seriously hamper government house building targets and threaten its ambitious ten-point plan for a new ‘green industrial revolution’.
If this is not tackled now – by making it simpler for trade businesses to grow and by scaling up the training and recruitment of apprentices in time – the consequences will be bleak, not just for the industry but for the government’s plan to kick-start the economy post-pandemic.
In order to meet increased demand for construction work (which will be 27 per cent higher by 2030) and home repairs (37 per cent higher), the UK will need 305,000 more construction apprentices, and 68,000 in the home repairs sector alone, which includes boiler installation engineers, electricians and painters and decorators.
The target means the UK will need to increase its current annual output of construction and trades skill apprenticeships by around 44 per cent. A huge task, but not an insurmountable one.
Call for industry backing
We’re calling on the construction and trade industry, and also the training and apprenticeship industries that sit around the sector, to back our call for the government to do more – and quickly – to tackle this challenge.
Failure to do so could lead to the UK lagging dramatically behind on government targets for new homes, domestic decarbonisation, installation of new power sources for electric vehicles and key infrastructure projects – all vital elements of the Government’s plan to kick-start the economy.
The Index suggests the trades skills gap is compounded by the slump in construction output of around 12 per cent during COVID-hit 2020, which has accelerated an already-high expected rate of retirements, staff turnover and the permanent return home of overseas workers in the short term.
A fifth of construction workers are aged 55 or over and will retire before 2030, an estimated 20,000-plus EU construction workers left Britain in 2020 and the report predicts another 22 per cent drop by 2030. The industry has also seen a consistent and historic lack of training which has contributed to wage inflation and skills shortages, even during the pandemic.
Left unchecked, our report calculates the skills shortage would impact the cost of hiring skilled workers leading directly to an increase in house prices and the cost of home repairs and improvements.
Small trades businesses are vital
Sixty per cent of the home improvement and repairs sector’s output is from firms with nine or fewer workers, therefore, the bulk of the responsibility for recruiting additional, skilled workers to cope with the increased demands will fall on smaller firms, recruiting apprentices from the existing UK population.
Therefore, we need to make it simple for smaller construction and trade firms to grow and provide better advice, support and incentives. And we need the vision, commitment and financial backing of government to realise the possibilities here.
Apprenticeships are the most common route of entry into the trades sector; the majority tend to be younger. Small firms are the largest providers of the estimated 21,000 construction trades sector apprenticeships completed annually in recent years, but this has not been sufficient to keep up with demand since 2014, according to our Index.
This figure will need to rise to at least 30,500 annually over the next ten years to keep up.
Last year, we warned that the government’s current incremental incentives (£3,000 for 16 to 18-year-olds, £2,000 for 19 to 24-year-olds and £1,500 for over 25s until April 2021) to take on apprentices do not go far enough to make taking on a young trainee an affordable option for the vast majority of small firms operating in the trades sector.
We know this, because they tell us so.
Now’s the time to listen. Now’s the time to react. And now’s the time to make the changes we need to see in order to give the UK the best possible chance to come out of this pandemic and for us all to build a better future.
Find out more
For more information on the new UK Domestic Trade Skills Index, or to view a summary of the full report, please visit the HomeServe Foundation at https://homeservefoundation.com/uk-domestic-trade-skills-index-feb21/.
Or more information and support about trades apprenticeships, please visit https://homeservefoundation.com/.