To build future capacity within the construction industry, we must look to public procurement, argues Graham Collie, director of product innovation at LHC Procurement Group
According to Skills England’s first annual Skills Report and accompanying Sector Skills Needs Assessment, construction will require more than one million additional workers by 2035 to meet government housing and infrastructure ambitions. For public bodies, realising ambitions – from delivering new homes and buildings to retrofitting existing ones – depends on having enough skilled people. That positions the skills shortage as not only a workforce issue but a delivery one, too.
Fortunately, public procurement has an important role to play in addressing it. Too often, though, procurement approaches are designed around securing capacity that already exists; a contracting authority identifies a requirement, goes to market and expects suppliers to provide the people needed to deliver it.
That may work for an individual contract but across the sector, it risks becoming a competition for an already constrained pool of labour. We need a different approach. Rather than simply asking how procurement can secure the skills needed for today’s project, the public sector should also ask how its collective buying power can help create the workforce needed for tomorrow.
Starting with greater visibility
Businesses are far more likely to invest in apprenticeships, recruitment and training when they have confidence in a sustained pipeline of work. Recruiting and developing people requires time and money. Suppliers need enough certainty to know that those investments can be supported beyond a single contract.
Yet public sector opportunities can still appear fragmented, with different organisations procuring similar programmes independently and over relatively short time horizons. For suppliers, particularly SMEs, that can make workforce planning difficult.
A clearer and more coordinated pipeline gives the market something it can plan around. It can help contractors understand where demand is emerging, what capabilities will be required and where investment in new skills is likely to pay off. That matters particularly in areas such as retrofit and low-carbon construction.
This is also a challenge being highlighted through our partnership with the National Retrofit Hub. Its report, A Vision for a Strong Retrofit System, argues that short-term funding and fragmented programmes have made it difficult for the retrofit sector to develop the long-term capacity required for consistent delivery.
Among the foundations it identifies for a stronger retrofit system are long-term direction and lasting capacity – giving organisations the confidence to invest in people, skills and partnerships.
How procurement can support
Procurement can be used to set meaningful employment and skills expectations that are proportionate to the contract. It can encourage suppliers to work with colleges, training providers and community organisations, and create opportunities for apprentices, career changers and people currently underrepresented in the sector. It can also make it easier for smaller businesses to participate.
SMEs are an important part of the construction supply chain and often have deep roots in the communities in which projects are being delivered. But if procurement requirements are overly complex or opportunities are packaged at a scale that excludes smaller suppliers, the sector risks limiting the very capacity it is trying to build.
Good procurement should therefore consider not only who can deliver now but also how the structure of an opportunity can strengthen the market over time. However, skills requirements should not become a box-ticking exercise.
Counting apprenticeship starts, training hours or employment opportunities has value, but the real question is whether those interventions are creating sustainable careers and improving long-term industry capacity. A short placement may satisfy a contractual measure, whereas a properly supported route into employment can change someone’s life and give the sector a skilled worker for years to come.
Applying the same rule to suppliers
If businesses are encouraged to recruit apprentices but face an uncertain pipeline of future work, the model becomes difficult to sustain. Social value requirements and commercial realities must therefore work together.
That is why early engagement between contracting authorities, suppliers and training providers is so important.
By understanding likely future demand, the market can identify where shortages may emerge and act earlier. Training can be aligned more closely with real opportunities, rather than reacting once skills gaps have already become acute.
For public sector clients, there is also a clear operational benefit.
A stronger and more resilient skills base supports competition, reduces pressure on delivery programmes and makes it easier to bring forward future projects with confidence. In that sense, investment in skills is not separate from successful procurement. It is part of it.
The public sector has enormous collective buying power. Every construction, housing and retrofit programme creates demand in the market and influences how businesses invest. The question is whether that influence is being used deliberately.
It’s a team effort
Individual organisations cannot solve the construction skills shortage on their own, and procurement is not the only answer. Industry, education providers and government all have critical roles to play. But public procurement can create the conditions in which long-term investment in people makes commercial sense. That means looking beyond the immediate contract.
The challenge facing the sector is not simply how to find enough skilled people to deliver the next programme of work. It is how to use the programmes we procure today to help build the workforce that will deliver throughout the next decade.
*Please note, this is a commercial profile.
