A potentially huge shortfall in construction workers looms, unless the government can agree a new immigration system that provides the industry with the skills it needs.
That was the verdict of construction industry bosses in the wake of Britain’s dramatic Brexit vote last Thursday, as they contemplate delivering the vast pipeline of infrastructure and housing work projected over the next decade without support from an army of migrant workers.
Chris Blythe, chief executive of the CIOB, said: “The CIOB has, in our report on migration in construction from 2015, made clear that a flexible, migrant workforce has been, is, and always will be, an identifying feature of a healthy construction industry, whether that is the UK or elsewhere. It is imperative that the voice of the construction industry is heard clearly in the discussions about the UK’s withdrawal from the EU so it can help shape a sensible policy on migration that meets both its needs and those of the wider community. Moreover, I would also reassure CIOB members that the global standing of their qualifications remains unchanged. Though we are UK-based, membership of the CIOB continues to be a guarantee of high professional standards and provides access to international markets.”
Mark Robinson, Scape Group chief executive, said: “The government must clarify as a matter of urgency what will happen to the EU construction workers in the UK, as they are currently filling the gap left by our skills crisis. We need to recruit a million workers into the industry by 2020, and putting EU migrants off coming here will only exacerbate this problem.”
National Federation of Builders chief executive Richard Beresford said: “The lack of skills for the pipeline of work we have is the defining structural issue for the industry. Until now, we have developed home-grown talent and, when that was not enough, we turned to the EU to make up the shortfall.
"The government must clarify what will happen to the EU construction workers in the UK, as they are currently filling the gap left by our skills crisis. We need to recruit a million workers into the industry by 2020, and putting EU migrants off coming here will only exacerbate this problem."
Mark Robinson, Scape Group
“We now know there may come a time when that option is no longer available to us. We need to rethink how we draw people to construction and the breadth of opportunity available.”
Alan Brookes, UK chief executive officer of construction consultant Arcadis, said: “In the future, European labour may no longer be the safety valve it has been, so we must plan to use the workforce differently. Using more offsite components and investing in skills and the management of projects will now prove absolutely vital.”
House builders have been the first to feel the post Brexit chill.
Monika Slowikowska, founder of Golden Houses Developments, believes the first signs of a property crash are emerging. She said: “House building companies’ shares are already down by as much as 40% and bank shares are plunging. The construction industry and the banks are always the first to show signs of a crash and these signs are already visible.”
Brian Berry, chief executive of the Federation of Master Builders, said: “The UK construction industry has been heavily reliant on migrant workers from Europe for decades now – at present, 12% of the British construction workers are of non-UK origin. The majority of these workers are from EU countries such as Poland, Romania and Lithuania.
“It is now the government’s responsibility to ensure that the free-flowing tap of migrant workers from Europe is not turned off. If ministers want to meet their house building and infrastructure objectives, they have to ensure that the new system of immigration is responsive to the needs of industry.”
Peter Andrew, deputy chairman of the Home Builders Federation, said: “It is too early to understand all the implications of the Brexit vote for house builders. However, it is clear that after decades of undersupply we face an acute housing crisis and demand for new homes will remain high.
“We will continue working with government and others to ensure we can deliver the number of homes the country needs in the coming years.”
Other construction commentators said the government needed to give the industry confidence on its spending plans.
Read more about the skills crisis
Patrick Flaherty, Aecom chief executive for UK & Ireland, said: “It is critical that the domestic agenda is not sidelined as the UK faces a minimum of two years of negotiations to leave the EU. Focus must remain on energy security and energy independence, as well as progressing the UK’s ambitious infrastructure pipeline.
“Schemes such as HS2, Crossrail 2 and the Northern Powerhouse programme are vital to the country’s ability to compete on a global stage, which is more crucial than ever due to this referendum result.”
Scape’s Robinson added: “With the financial markets and economy set to be turbulent, perhaps for some time, the public sector now faces the prospect of further government spending cuts on top of the very significant pressures they have already been put under. Long-term projects, like HS2, could now be at risk from the economic fallout of the result.
“The immediate priority for the government has to be to steady the ship, and provide as much clarity as possible on the renegotiation process and the security of government-funded projects in the year ahead.”
Robinson said he thought it was unlikely there would be any immediate change to procurement.
“Although the OJEU system is a creation of the EU, its rules and procedures are embedded in UK law and would require new legislation to be overturned. Changing UK legislation would be complex and time-consuming due to the number of public sector and industry bodies with which consultation would be required.
“One of the few certainties we can draw from today is that the UK will always need a robust system of procurement that delivers value for both taxpayers and the public sector.”