After six years of fiddling and relying on the so-called invisible hand of the market to correct industrial imbalances the government has finally published an industrial strategy.
For the construction industry which is crying out for a radical solution to tackle the ever widening skills gap, the proposals will be effective as a chocolate fireguard.
In total across all industries the government has announced just an additional £170m for vocational education, not only is the money totally insufficient but it entirely disregards why the industry has been failing to train sufficient apprentices for the last 30 years.
Death of an industry?
Without fully trained apprentices the UK construction industry will cease to exist but the fact remains that employers are addicted to a short-term hire and fire culture where work is repeatedly sub-contracted and the actual workers are recruited via agencies and then frequently required to work via an umbrella company or falsely self-employed.
The advantage for the industry is that they are receiving a hidden subsidy of billions of pounds by avoiding paying employer’s national insurance contributions of 13.8 per cent per worker as well as often not paying holiday pay, sick pay or any other employee benefits.
The disadvantage is that companies who don’t employ anyone invariably don’t train anyone. In fact the only reason the industry has been able to function and grow in recent years is by relying on migrant labour.
In the rapidly approaching post-Brexit world that option is not likely to be available and anyway there should be far greater avenues open for young British workers to enter an industry which although physically demanding can be lucrative and rewarding. There is no shortage of people keen to undertake a construction apprenticeship the challenge is finding a decent placement.
On top of the failure to train apprentices is the added problem of the rapidly aging profile of the construction workforce, with a large proportion of the current workforce 50 and over.
This is especially important as due to the demanding nature of the industry and the lack of effective occupational healthcare, the majority of construction workers are forced out of the industry due to injury or ill health before they reach state retirement age.
Lack of apprentices
The figures on the current state of apprenticeships are highly disturbing. Last year the Construction Industry Training Board estimated in spring last year that the industry needed 46,400 new entrants in each of the next five years. That figure has been revised downwards to 25,350 a year in the post-Brexit world.
Compared to these figures, just 8,030 construction apprentices completed courses in 2013/14 (the latest year figures are available for) and the maximum numbers potentially in the pipeline do not meet the industries requirements either, in 2014/15 there were just 18,140 people undertaking apprenticeships of any sort.
Rather than providing funding crumbs if the government really wanted to tackle the construction skills gap they would need a truncheon rather than just a stick as the industry is not going to start properly training apprentices unless they are beaten into submission.
The answer is strict public procurement rules requiring all companies bidding and working on public sector construction projects to train a set number of apprentices. Companies that don’t comply will be barred from bidding. Overnight the industry will be forced to get its act together.
Until the government takes such effective interventionist measures then whenever it talks about meeting the skills gap it will be merely hot air.