Is the UK Skills Shortage About to get Worse?

Is the UK Skills Shortage About to get Worse?

30th January 2017

Despite plenty of dire forecasts after last summer’s Referendum and warnings that things were about to get very tricky, many of us here in the UK’s construction industry have felt little effect of the leave vote as yet.  Things are set to change, however, especially in light of the fact that last week saw the government publish a bill to trigger Article 50 which is the beginning of the end for Britain as far as EU membership is concerned.  Now, we’re set on the inexorable path towards a future in which we begin to learn just what the effects of the Brexit really will be.

This is the political and economic climate in which chief executive of Crest Nicholson, one of Britain’s leading residential developers, is warning that a steady continuing flow of immigrant labour is essential to maintain growth in house building output.  Whilst expressing concerns on the long term impact of the UK’s decision to leave the EU, he goes on to warn that there is a potential threat to our labour market as European workers are essential for the UK’s construction industry as it strives to deliver the homes that are much needed in parts of the UK.  Our supply of European labour needs to at least be maintained at its current level if we want housing output to increase in the future.

The shortage of skilled labour right now, across all sectors of the construction industry, is driving up wages and salary costs which adds to building cost inflation, another issue to be considered when the government negotiates our exit from the EU. 

Meanwhile, some in the industry are warning that payroll inflation is about to increase when the immigration skills charge is introduced from April, 2017.  The policy has nothing to do with Brexit and predates the Referendum, a measure that was contained in the Immigration Bill 2015/16 to encourage businesses here in the UK to recruit and train UK citizens.  Under the Bill, employers who sponsor a migrant worker for a Tier 2 visa will have to pay a levy of £1,000 per person sponsored per year.  Small businesses won’t escape entirely, but they will be required to pay a reduced rate of £364 annually.

We’re living in an age when international workers are often necessary to supplement the UK’s core work force or cater to a short term demand for specific skills.  There is also the very real fact that Britain is suffering from a skills shortage in so many areas, especially in construction, as we’ve already pointed out.  We’ve reported on the skills shortage and the challenges that brings us several times in the past here at Safety Fabrications so we’ll be watching coming developments on this issue closely in the coming months so we can bring you, our readers, all the latest information you need to stay up to date with what’s happening.