Construction Skills Gap Threatens Housing and Infrastructure Delivery, NAO Warns

Up to 755,000 additional workers needed by 2030, as employer confidence emerges as the critical risk to a £625 million skills package

The government’s ambitions to deliver 1.5 million homes, a £725 billion infrastructure pipeline and upgraded home energy standards are at risk unless employer confidence in training investment recovers significantly, the National Audit Office has warned in a new report.

The NAO examined the £625 million construction skills package announced in March 2025, which aims to support up to 60,000 additional construction workers by 2029 through a combination of Skills Bootcamps, foundation apprenticeships and new construction technical excellence colleges. While the watchdog describes the package as a positive step with a clearer delivery framework now in place, it concludes that success is far from guaranteed.

The scale of the challenge is substantial. Government estimates put the additional workforce requirement at between 201,000 and 755,000 workers by 2030 – before accounting for those who leave the sector. The construction industry already records the highest rate of hard-to-fill vacancies due to skills shortages of any sector in the UK, at 45% against a national average of 27%.

Employer engagement is identified as the single most critical delivery risk. The government’s modelling assumes that 42% of additional workers will come from further education students completing industry placements – a figure that depends heavily on businesses being willing and able to offer those placements. In 2024, employer investment in training per construction trainee fell to its lowest level in a decade. Foundation apprenticeships, intended to funnel young people into entry-level roles, have started just 74 young people by April 2026, against a DWP assumption of 1,000 for 2025-26.

The NAO is clear that tough economic conditions are suppressing the employer confidence needed to take on apprentices and trainees, with recruitment and investment decisions tied closely to expected work pipelines, costs and market competition. Without a meaningful shift in that picture, skills shortages risk driving up costs and undermining the delivery of major housing and infrastructure commitments.

The watchdog calls on DWP and DfE to keep the package under close review, use performance data to identify problems early, and be prepared to adapt or reallocate funding where initiatives are underperforming. It also recommends that MHCLG, DESNZ, NISTA, DBT and the Construction Industry Training Board work together to improve how future workforce demand is estimated across government commitments.

For construction businesses, the report underlines both the urgency of the workforce challenge and the opportunity to shape how skills provision develops – particularly for firms able to offer placements, apprenticeships, and structured entry routes into the sector.

Capability areas relevant to this issue include: workforce development and apprenticeships, skills bootcamps and vocational training, site-based industry placements, construction technical education, supply chain recruitment, and labour market planning.