A severe shortage of skilled workers is threatening the Government’s target to build 1.5 million new homes by 2029, according to new research by skills development body City & Guilds. The report notes widespread concerns across the construction industry about the availability of talent and the ability to meet government ambitions.
The report, which surveyed employers, employees and training providers, found that 76 percent of construction businesses are struggling to recruit skilled workers. A further 84 percent agreed that the sector is facing critical shortages, placing the Government’s housing goals in doubt.
Figures from the Construction Industry Training Board indicate that the industry must recruit 239,300 workers by 2029 to meet the projected demand for housing. However, more than half of employers surveyed by City & Guilds believe the current workforce is insufficient to achieve this.
The report also raises concerns about the construction sector’s ability to deliver on net zero housing objectives. Fifty-four percent of employers questioned doubted whether the workforce could deliver on sustainability commitments alongside housing targets.
Recruitment barriers and local labour shortages
The findings reveal multiple challenges hampering recruitment and retention. The rising cost of doing business is identified by 46 percent of employers as a major obstacle, with 27 percent highlighting a lack of interest in construction careers among younger people.
Local labour market shortages are flagged by 41 percent of employers as the biggest recruitment challenge, followed by the demand for job-ready applicants (36%) and the industry’s limited appeal (31%). Stricter immigration rules, including the Immigration Skills Charge and longer settlement periods, are also creating barriers for 28 percent of businesses.
Kirstie Donnelly, Chief Executive Officer of City & Guilds, said, “We cannot build 1.5 million homes without the people to deliver it. We urgently need to reset how we attract, train and upskill talent across the construction sector, with flexible routes, smarter investment and collaboration between industry, education and Government.”
She added that with the Government aiming to reduce reliance on overseas labour, there is a growing need to invest in domestic skills development.
Training as key to bridging the gap
Training is viewed as essential for addressing the skills shortage. Eighty-five percent of construction employees said that training is important for career progression, while 59 percent believe more training provision would help attract new workers to the industry.
However, 61 percent of employees said accessing funded training remains difficult. The report argues that making schemes like the Apprenticeship Levy more flexible would play a significant role in improving access to skills development and attracting new talent.
Donnelly added, “Recent Government funding announcements for construction skills are extremely welcome, but this will not move the needle without reform to the Apprenticeship Levy. Its current rigidity prevents firms from getting new talent job-ready and makes it difficult for apprentices to continue training across different projects.”
She added that greater flexibility in the system could unlock thousands of opportunities for new workers and help build a new generation of construction professionals.
Calls for wider reform to meet future needs
Nick Maclean, Acting President of the Royal Institution of Chartered Surveyors, also warned of growing risks to the housing target. He said, “The Government’s ambitious targets become less achievable each year that underinvestment continues in encouraging people to pursue and remain in careers within the built environment.”
He noted that career returners and people switching industries offer untapped potential, and called for more funding models tailored to support these groups. He also advocated for increased investment in vocational pathways and apprenticeships alongside traditional education.
City & Guilds’ forthcoming report, Foundations for the Future, sets out a three-pronged strategy to tackle the construction skills shortage. This includes attracting young people and career changers through improved perceptions of the industry and better integration of skills in education.
It also recommends supporting professionals joining from other sectors with access to appropriate training, and upskilling the existing workforce by promoting lifelong learning. The report calls for sustained investment in training that aligns with evolving industry needs, including green technologies, alongside better utilisation of the Skills Immigration Charge to fund UK-based training.
