Even a nonexistent Heathrow third runway or HS2 northern leg have arguably done their bit for the economy: keeping a small army of planners, lawyers and lobbyists busy over years of tussle between the “builders and the blockers”, as Rachel Reeves has styled them.
Now the blockers are, as the chancellor made clear in laying out her vision for turbocharged infrastructure growth, as welcome as rare bats or newts at a construction site. But are the builders ready to take their turn?
Some fear not: or at least, not in sufficient numbers or skills for all this concrete. Reeves’s hopes for transport alone encompass not just Heathrow but Gatwick, Luton, Stansted and other airports; the £9bn Lower Thames Crossing road scheme; accelerating east-west rail; and, in the expectation of her Labour mayoral allies, new rail connections between northern cities to come.
That’s along with building 1.5m new homes, energy decarbonisation, and a new Silicon Valley around Bedford – while completing two of Europe’s biggest and most prolonged infrastructure projects: the Hinkley Point nuclear plant and the mother of all engineering despair, HS2.
Ready or not, a commitment to jam tomorrow will be welcome for the construction sector, reeling from a grim 2024 when stalling projects were compounded by the collapse into administration of one of the biggest firms, ISG, leaving many subcontractors unpaid.
Yet even with the many years of design, planning and assents ahead for most of the infrastructure Reeves is championing, time is short.
“You wouldn’t expect any construction from this until the early 2030s. But there is a long-term issue within construction employment that needs to be dealt with – and that will take more than a decade to solve,” warns Prof Noble Francis, economics director at the Construction Products Association. “The question is: do we have the skills to do all the projects at the same time across all sectors?”
There are 300,000 fewer workers in construction in the UK now than in 2019, with a particular decline in the experienced, 50-plus age range, accelerated by Brexit and the pandemic.
A review into the skills shortage in construction and engineering published by the government last week suggested a shake-up and merger of both sectors’ industry training boards. Its author, consultant Mark Farmer, warned of an “unprecedented risk now emerging in relation to declining workforce size and skills misalignment”.
Politicians’ eternal hope is that infrastructure can spark change: a mooted benefit of HS2 was to upskill the nation. Reeves will not want to completely dust off the high-speed rail project’s “seven strategic goals” any more than search for the Ed Stone; one stated goal of the line that will now only link London and Birmingham was to rebalance the nation between north and south.
But the first strategic goal was to deliver economic growth, and another to foster skills and jobs. Industry analyst Stephen Rawlinson says: “What’s got partly lost in the whole cost debacle over HS2 is that particular incentive: to provide us with a massive skills base in building high speed networks, tunnelling and so on, with thousand of apprentices to be trained.”
A national college of high speed rail, with campuses in Doncaster and Birmingham, quietly folded. There was some transition of skilled workers from the preceding Crossrail project to HS2, as well as the Thames Tideway super-sewer project, notes Prof Jim Hall, president of the Institution of Civil Engineers – but many have been frustrated by the inability to maintain a “pipeline” of work to encourage and utilise a skilled workforce.
Hall, a member of the National Infrastructure Commission, whose push for a 10-year strategy has long been a thwarted ambition, says: “Stop-start and a lack of certainty is a particularly important obstacle for the supply chain and skills.”
While civil engineering graduates remain in strong demand, shortages are sharper elsewhere: “The construction industry depended a lot on migrant labour from the EU. We’re in a tight situation in building trades and some of the specialist trades associated with the clean energy mission, especially high-voltage electricians doing jobs like connecting up wind turbines to substations.”
And, Hall says, global competition for those clean energy specialists – as well as equipment – is keen.
For the UK, Francis says bluntly: “Without a skilled construction workforce, the 1.5m new homes target, net zero transition and all the projects to improve transport and water infrastructure will not happen.”
But industry leaders are more confident that it can be achieved – with proper planning. Mark Reynolds, executive chairman of Mace – a major contractor for HS2 and Stansted among others – and co-chair of the Construction Leadership Council, says the deficit in the workforce can be bridged: “The ONS data shows a gap of around about 40,000 people. So that’s not huge.”
Construction, Reynolds notes, is now only second to financial services for average sector wages – about £780 a week according to ONS data. Some skilled roles will require immigration visas, he concedes, “but the majority is filled by evolving the workforce, rather than saying, ‘oh it’s terrible, we’ve got a massive skills gap’”.
Acknowledging the labour issue, Reeves told Times Radio the government would be targeting “a million young people who are not in education, employment or training … and reforming the apprenticeship levy to turn it into a growth and skills levy. We need the people to build the homes, to build the third runway and to build the train lines. But we have lots of talent.”
Apprentices are a popular idea but not uncomplicated, Reynolds notes. “Companies can’t take on apprentices without confidence in the workload.” If the proportion of new starters exceeds 6-7% of staff, “we struggle to look after them in the way they need”.
But he is bullish about AI, which he thinks can improve productivity by 30%. “At Mace, we employ 2,200 people in construction: that’s effectively going to give me another 700 people.”
The labour supply chain includes firms such as Gloucester-based Hercules Site Services, rapidly growing through tech to source workers for HS2 and other projects, and recently opening its own training academy in Nuneaton. “Every single area needs more people and expertise – whether its quality assurance people, training supervisors, pipe-laying gangs,” chief executive Brusk Korkmaz says. “We need to make construction a bit sexier. Constructing infrastructure is not just digging outside in the rain.”
Korkmaz notes that much of the future workforce for Heathrow’s runway are still at school, and the promise of those projects can be crucial to attract and retain people long-term: “This will make people think I’ve got a career in the UK – and it will stop the brain drain, people going to the Middle East and not contributing tax or building the economy here.”
For Reynolds, long-term stability is key: “If we are very clear about our 10-year infrastructure strategy, develop and prioritise the pipeline, industry and government are more than capable of developing its workforce sufficient to meet the demands.
“When you look at the number of people in the sector and how we grow – this is not something that keeps me awake at night.”
But with Mace having won the contract to build an HS2 station at Euston, whose fate has been persistently thrown into doubt, Reynolds bears the scars of government U-turns. “If you ask me what does keep me awake: it’s about clear long-term strategy, and being able to invest such that it doesn’t get undermined by change of policy in the future.”
