Those who voted for Brexit have got what they wanted: fewer migrants coming to this country to work. So now who’s going to build our houses?
The recent debacle over access to information via the internet, whether fake or otherwise, has shown that people’s online activity is highly revealing. Hence the results of a recent survey of job search patterns in Romania caught my eye. According to the poll, there has been a dramatic reduction in Google searches for construction sector vacancies in the UK, from workers across Poland, Romania and Bulgaria in 2017. For economists as well as contractors this should start ringing alarm bells.
What internet activity occupies the waking hours of a roofer from Romania or a plasterer from Poland is important given that workers from these regions make up a large number of those employed in the UK’s housebuilding industry. A survey last year by the Home Builders Federation revealed that 17.7% of the UK’s construction workforce are from the EU, with more than half of those coming from Romania. In London that percentage is much greater than elsewhere.
This is relevant to the current debate about the housing shortage in the UK. The Federation of Master Builders’ recent State of Trade survey for Q4 2017 showed that small construction firms, for instance, are experiencing record high skills shortages. More than two-thirds of small building firms are struggling to hire bricklayers and 63% are having difficulties finding carpenters and joiners. Ironic considering so many SMEs in construction were reported as voting for Brexit.
More than two-thirds of small building firms are struggling to hire bricklayers and 63% are having difficulties finding carpenters. Ironic considering so many SMEs were reported as voting for Brexit
We are supposed to be overcoming this reliance on EU labour post Brexit by developing our own homegrown talent with a spanking new, government-inspired apprenticeship levy which applies across all industry. Also, for those in the built environment, we have the CITB operating a unique bespoke training facility. The government has pledged to create 3 million apprentices by 2020. But one year after the launch of the apprenticeship levy, the number of apprentices is declining fast and the target is way off course. In the last few months, for instance, we have seen a dramatic slump in the number of people taking up apprenticeships across all areas of industry in the UK. Statistics published by the Department for Education last month show that there were 27,000 apprenticeship starts last November, more than one-third fewer than the figure of 41,000 recorded in the same month in 2016. The third quarter of 2017 saw a 27% year-on-year decline in apprenticeship starts to 114,000, compared with 155,000 in the same three-month period in 2016. The collapse had been even more dramatic (60%) in the previous quarter, the first following the introduction of the new levy. Aside from leisure and tourism, construction is the only major sector in the economy not to see a rise in the volume of apprenticeships since 2009/10.
There are lots of reasons why the system is not working in our sector, from funding through to slow accreditation, and the CITB is working hard to build credibility. However, what is undeniable is that while the government is busy scapegoating the industry for landbanking and other alleged infractions and rushing through a damaging, ill thought-out Brexit, the apprenticeships system needs either a lot longer to bed down or else major revision. Ironically, as numbers applying for apprenticeships decline, it would appear that the overall perception of our industry is improving. Choosing a construction apprenticeship as a career path has become a more attractive proposition for both potential apprentices and their parents, so a recent survey has revealed. Redrow’s second annual apprenticeship report questioned 1,003
15- to 21-year-olds and 1,002 parents of 15- to 21-year-olds, and it has revealed a 14% increase in young people considering a job in the sector this year. This has got to be good news.
You don’t need to surf the internet much to realise that in spite of technological improvements, the construction sector is heavily labour-reliant. The estimated 200,000 EU nationals working in the sector in the UK are vital. In a fog of misinformation, all we know for sure is that construction did not seem as important to HM government as other sectors when they considered withdrawal from the EU. The impact of Brexit on the fishermen from Newlyn, representing an industry that employs 12,000 people and makes
up less than 0.5% of GDP, captures far more headlines than the impact on our own sector, which represents more than 6% of GDP and employs just under 3 million people.
Let’s be clear: it is not that we are looking at an industry in crisis at the moment – we still have lots of work and sites are busy, especially in the South-east. But everybody is afraid of jinxing things by talking about the elephant in the room. We know that the workforce is shrinking, we can see the supply chain being hit by wage hikes and this is feeding through into revised cost projections which clients don’t like. The skills shortage is like a rumour developing into a story which has morphed into a worry and now is shaping the judgment of those deciding whether or not to invest in the UK. It is just another reason to say: “No, I will wait until there is clarity after Brexit.”
Immediate action is required in the form of help and funding for a vastly expanded skills training programme to ensure a guaranteed pipeline of labour, a long transition period before any new visa restrictions are implemented, and far more certainty as far as the public sector is concerned.
Without a trained and skilled labour force, the country’s houses, hospitals, HS2 and Hinkley are not going to get built. As the labour supply from eastern Europe decreases, the industry is going to need help if it is to deliver ambitious government housing targets. This means first and foremost that it needs an apprenticeship scheme fit for purpose – and it needs it now, not later.
Richard Steer is chairman of Gleeds Worldwide