The skills shortage in the construction industry is at “breaking point”, according to a survey commissioned by a public sector owned built environment specialist operating across the Birmingham and the West Midlands.
The report comes on the back of ONS data released in August which shows construction output has decreased by 8.25% quarterly and 2.24% annually in the West Midlands.
Scape Group carried out the most comprehensive survey of the UK’s construction supply chain, revealing the true extent of the skills crisis.
Its latest analytical report Sustainability in the Supply Chain, published this week, surveyed more than 150 contractors, subcontractors and senior managers at public sector organisations in the West Midlands and across the UK. According to 85% of public sector respondents, the skills shortage is negatively affecting the quality of projects, particularly at regional level.
Scape Group chief executive Mark Robinson said the survey’s finding that one in ten contractors and suppliers think the skills shortage is critically impacting budgets was a stark reminder that the problem needed to be tackled head on through collaborative working and training.
He said: “Our research has shown that the skills shortage is at breaking point, not only severely impacting the quality of what we are building but also our ability to build it on budget. While there is a mountain to climb to overcome this challenge, basic recommendations can be put in place to ease the burden – for example, 19% of contractors and subcontractors still do not have an apprenticeship scheme.”
The report also shows the vast division between the public and private sector when it comes to how they define a healthy supply chain and what their primary aims are.
Within the private sector, long term operational stability was the core aim (72%), however within the public sector, 70% of those surveyed felt that providing long-term benefits for the local economy should be one of the biggest priorities.
Mr Robinson emphasised that this juxtaposition between the two sectors needed to be addressed immediately if the skills shortage is to be stopped.
He said: “Now more than ever we need to work more closely together in order to deliver for both the public sector and SMEs. We can only achieve sustainable levels of efficiency through a perpetual focus upon true collaboration, partnership and greater engagement with all stakeholders.”
The report also shone a light on the communication challenges between the public and private sectors, with 75% of suppliers believing the public sector needs to do more to engage with its supply chain, and 80% of public sector managers agreeing.
Forward visibility of upcoming projects represents a continuing challenge, with 68% of the contractors and suppliers surveyed typically bidding for work six to 12 months before a project or contract starts, but as many as a third (33%) believing they should be able to bid for opportunities up to 18 months before the contract starts.
The private sector’s reliance on the public sector was another key theme of the survey, with the public sector funding more than a quarter of the business for 64% of contractors and suppliers interviewed. When broken down further, it is clear that SMEs rely more heavily on the public sector, with over a quarter (26%) of companies stating it funded more than 50% of their work.
“Given the current economic uncertainty after Brexit, the £30billion of public sector construction activity is a vital stream of revenue for the sector and early signals from the new government that austerity measures might be eased would be welcomed across the board,” Mr Robinson added.
Once the results of the survey were collated, Scape put together a list of recommendations based on the results it had gleaned from the marketplace.
Top of the list is addressing the skills shortage, which Scape recommends should be tackled head on by a greater focus on apprenticeships, and addressing the ever-present gender gap in the industry by offering more attractive opportunities to young women.
Next, greater forward visibility of project pipelines to support SMEs is vital, according to Scape, in generating long term financial security in the UK.
Mr Robinson said: “If tenders were made public more than 18 months in advance it would allow SMEs the time to plan ahead, form partnerships and increase the likelihood of a successful bid. It would also allow for more stable employment patterns, resulting in increased stability in the pricing of contracts across the whole construction industry.”
Scape emphasised that a greater collaboration between the public sector and the supply chain is also needed to support efficient delivery, for example through consistent and forward looking digital communications driven by government, and the importance of local spend and social value must be communicated.
“The public sector, by its very nature, must deliver greater social value through its supply chain and this is balanced alongside the increasing pressure to deliver savings and achieve more with less.
“The supply chain is the vehicle through which the public sector can deliver this extra value and there are greater opportunities for those who understand this key aspiration. However, our survey has shown the public sector needs to clearly communicate the value of local spend and present tangible results which suppliers can relate to,” said Mr Robinson.
