It is estimated by the Construction Industry Training Board that 76,000 people are required to join the industry each year in order to meet demand and replace those leaving the sector.
Ivan Lewis, parliamentary under secretary for skills and vocational training, this week launched the initiative, called Sustainable Training for Sustainable Communities, at a refurbishment project in Hounslow, west London.
The scheme is a partnership between the CITB and the Housing Forum. It will encourage registered social landlords, arm's length management organisations, councils and their contractors to form an agreement to recruit and train local people on their projects.
The government expects to see 400,000 social housing units brought up to the decent homes standard by 2005.
The Office of the Deputy Prime Minister's approved development programme for the Housing Corporation, worth more than £1.2bn, also expects to see 22,700 homes built between 2003 and 2004, as part of an annual programme.
CITB-ConstructionSkills chairman Sir Michael Latham said: "The initiative will shift the focus of the employment of trainees from simply providing future skills for the industry to the wider community benefits of employing local labour."
Seventeen projects have signed up to the scheme so far. These range from medium-sized projects, which are investing £21m for the refurbishment of 1600 units, to larger works worth £240m on 20,000 homes.