Employer Confidence Critical to Skills Shortages, NAO Says

Industry News Skills & Training

The construction industry has the highest rate of hard-to-fill vacancies due to skills shortages — 45% compared with a 27% national average.

More employer investment in training the next generation of construction workers is needed, according to a new report Increasing Construction Skills from the National Audit Office (NAO) published today.

Construction Skills Package

The watchdog examined the government’s progress in delivering its £625 million construction skills package, announced in March 2025, which aims to support up to 60,000 more construction workers by 2029.

The package combines tried and tested initiatives, alongside newer initiatives, including Skills Bootcamps, and new foundation apprenticeships, and construction technical excellence colleges.

However, the package is not designed to meet all future workforce needs, with government estimates showing that between 201,000 and 755,000 extra workers could be required by 2030, before accounting for those who leave the sector for other jobs.

Employer Confidence Critical

Employer engagement is a critical delivery risk for the construction package. The government hopes that 42% of the additional construction workers will follow from further education students completing industry placements.

Businesses make recruitment and training decisions depending on the expected pipeline of work, costs and market competition – but tough economic conditions are affecting employers’ confidence to invest and take on new employees and apprentices.

In 2024, employer investment in training per construction trainee was at its lowest level in 10 years.

Foundation apprenticeships are intended to help young people move into entry-level construction jobs, but by April 2026 only 74 young people had started, against DWP’s assumption of 1,000 in 2025-26.

More Employer Buy-In

The NAO concludes that the government’s construction skills package is a positive step, and that it now has in place a clearer framework to track delivery.

However, delivery is not guaranteed. To achieve its aspiration of up to 60,000 workers — and support its housing and infrastructure commitments — government will need better data, to prioritise resources, and to get employers’ buy in. Without this, skills shortages could drive up costs and put major delivery commitments at risk.

The government’s ambitions to build 1.5 million homes, upgrade home energy with the Warm Homes Plan, and deliver a £725 billion infrastructure pipeline depends on a significant expansion to the construction workforce.

Gareth Davies, Head of the NAO, said: “The government is taking action to address shortage of skilled construction workers as part of its ambitious commitments for housing, infrastructure and energy efficiency. Success will depend on employers having the confidence and capability to offer placements, apprenticeships and jobs.”

The NAO now recommends:

Departments involved in estimating construction worker demand — including MHCLG, DESNZ, NISTA, DBT and the Construction Industry Training Board – work together to improve how they will estimate future workforce needs to deliver government ambitions

Departments responsible for skills delivery — DWP and DfE — keep the construction skills package under close review, using performance data to identify problems early, and publish regular updates on progress towards their 60,000 ambition.

DWP and DfE – should be ready to consider adapting the package where initiatives are not delivering as expected, including changing course if initiatives need to be modified, or funding reallocated.

Sir Geoffrey Clifton-Brown, Chair of the Committee of Public Accounts, said: “Today’s NAO report sets out the scale of the challenge for the construction sector: delivering the government’s ambitions would mean an unprecedented expansion of the construction workforce.

“As a chartered surveyor, I see first-hand a sector already stretched by acute skills shortages, high vacancy rates and an ageing workforce.

“While the £625 million package to train up to 60,000 workers is welcome, this alone will not be enough: we will ultimately need hundreds of thousands more workers in the sector.

“This is not just about recruitment and qualifications, but increasing productivity and working in close partnership with industry. Construction is essential to delivering key national projects, and failure to act risks higher costs, significant delays, and ultimately poorer outcomes for taxpayers.”

The National House Building Council (NHBC) commented: “The report confirms what many across the house-building industry have been saying for some time. If we don’t fix the skills shortage, we won’t fix the housing shortage.

“Building quality homes the country needs requires a long-term commitment to developing the skilled workforce that will build them and you can’t create skilled workers overnight.

“NHBC is investing £100 million in a network of 12 multi-skill training hubs across the UK. Working closely with builders and industry partners, the hubs could train up to 3,000 site-ready apprentices every year in the trades where demand is greatest.

“The NAO is right to highlight the importance of employer confidence. Builders will only continue investing in apprentices if they have confidence in future workloads and access to high-quality, flexible training that delivers skilled people quickly.

“No single organisation can solve the construction skills challenge on its own. Government, industry and training providers all have a role to play and, by working together, we can create the skilled workforce needed to deliver the high-quality homes the UK urgently needs.”