Government announces £600m investment in construction skills

The Chancellor has announced a £600 million investment to train up to 60,000 more construction workers.

The announcement comes ahead of the Spring Statement and is part of the government’s broader pledge to build 1.5 million new homes.

Latest Office for National Statistics figures show that there are more than 35,000 job vacancies across construction, while employers report that more than half of vacancies cannot be filled due to a lack of required skills – the highest rate of any sector. 

Demand is expected to increase further to deliver the government’s ambitious homes and infrastructure targets.

Commenting on the announcement, Chancellor Rachel Reeves said: “We are determined to get Britain building again, that’s why we are taking on the blockers to build 1.5 million new homes and rebuild our roads, rail and energy infrastructure.

“But none of this is possible without the engineers, brickies, sparkies, and chippies to actually get the work done, which we are facing a massive shortage of. 

“We’ve overhauled the planning system that is holding this country back, now we are gripping the lack of skilled construction workers, delivering on our Plan for Change to boost jobs and growth for working people.”

As part of the reforms, the government will sponsor a new Construction Skills Mission Board to help promote collaboration with industry employers.

Co-chaired by government and Mark Reynolds, executive chair of Mace, the board will develop and deliver a construction skills action plan and provide strategic leadership to the construction sector.

Reynolds said the announcement demonstrates the government’s commitment to working with the industry to deliver the new homes target by the end of this parliament. 

“It’s a hugely significant funding package, and the establishment of the Construction Skills Mission Board will enable us to collaborate with government to drive change at pace,” he added.

“Understandably, construction firms across the country are looking for certainty of pipeline before they commit to investing in new jobs and skills – but this investment by the Chancellor will be critical in giving them the confidence they need. There is now no excuse – industry must embrace the government’s growth mission and match their ambition.”

The investment package will see £100 million used to fund 10 new technical excellence colleges, while £165 million will be allocated to help colleges deliver more construction courses.

Skills Bootcamps in the construction sector will also be expanded, with £100 million of funding to support new entrants, returners, or those looking to upskill within the industry. 

All Local Skills Improvement Plan (LSIP) areas will benefit from £20 million to form partnerships between colleges and construction companies to boost the number of teachers with construction experience in colleges.

New foundation apprenticeships in construction will be backed by an additional £40 million, which will launch in August 2025. As part of this new offer, employers will be provided with £2,000 for every foundation apprentice they take on and retain in the construction industry, as well as full funding for training costs through the new Growth and Skills Levy.

A further £100 million of government funding, alongside a £32 million contribution from the Construction Industry Training Board (CITB) will fund more than 40,000 industry placements each year for all Level 2 and Level 3 learners, those studying NVQs, BTECs, T-levels, and advanced apprenticeships. 

CITB will also double the size of its New Entrant Support Team (NEST) programme to support SMEs in recruiting, engaging, and retaining apprentices.

An additional £80 million capital fund will support employers to deliver bespoke training based on their needs.

Tim Balcon, CITB’s chief executive, said: “We are delighted with the support the government is giving the construction sector with increased investment. 

“This package will provide vital support, where it is needed most – it will cut straight to the heart of the construction industry being able to address the challenge of building 1.5 million new homes for people that desperately need them.   

“As an industry, we now need to grasp this opportunity and play our part in delivering it. I genuinely believe this is a once-in-a-generation chance to us to recruit and train our workforce – equipping more people with the skills they urgently need now and in the future.”

Leo Quinn, Balfour Beatty Group chief executive and founder of The 5% Club also welcomed the announcement.

He added: “Balfour Beatty and others are investing heavily in skills, but gaps remain, and they’ll only grow as the demand for critical infrastructure – to support clean, secure energy and better connectivity – ramps up. 

“As [the National Infrastructure and Service Transformation Authority] takes shape, we’re looking to it to take a holistic view of both skills and supply chain needs to ensure the industry is ready to deliver the infrastructure pipeline. We’re also keen to see the full details of the Growth and Skills Levy, which could make a real difference.”

Despite also welcoming the investment in skills, Adrian Attwood, executive director of heritage contractor DBR, questioned whether funding alone will be enough to drive real change. 

“We need a fundamental shift in how construction is perceived, as a sector of national importance, not an afterthought,” Attwood said.

“Careers in construction need an image makeover including highlighting the routes to specialist sectors such as heritage restoration and sustainable construction and retrofitting. 

“Young people need to see the value, creativity, and purpose in these careers. But it’s also incumbent on us as an industry to change perceptions, championing apprenticeships, mentorships, and success stories. 

“The rewards are huge – financially, professionally, and culturally. If we want the next generation to take up the tools, we must show them why it’s worth it.”