The UK’s £530bn construction and infrastructure pipeline is starting to crack, with skills shortages, weak investment and chronic delivery delays bringing major projects grinding to a halt, according to new research
The report by Oxford Economics for the Construction Plant-hire Association (CPA) warns that while ministers talk of “getting Britain building” much of the pipeline “lacks the workforce, certainty or funding to move beyond announcements”.
Businesses that provide the machinery and operators underpinning construction say they cannot plan or invest without predictable workloads, leaving delivery capacity “dangerously thin”.
The report states that the UK needs 250,000 additional construction workers to deliver planned projects – yet nearly half a million are due to retire in the next 15 years.
Some 44% of firms report labour shortages are restricting activity – the worst figure of any major UK sector.
Apprenticeship completion has slumped to 53%, while pay for young workers in construction has fallen below the wage rates in the retail sector.
Construction productivity has declined 0.1% a year since 1997, leaving output per worker below 1990s levels.
Only 14% of major government projects are rated on track, and less than half the National Infrastructure Pipeline has confirmed costs or funding.
Funding certainty plunges from 68% this year to just 33% by 2030, creating what Oxford Economics calls “a crisis of confidence” for investors and contractors.
Bridging the gap
The CPA has submitted a package of policy proposals to the Treasury ahead of the Autumn Budget that it says will stabilise delivery and restore business confidence across the supply chain:
- Publish a fully costed update of the National Infrastructure Pipeline with secured funding beyond 2028.
2. Reverse the rise in employer National Insurance, easing labour-cost pressures across construction supply chains.
3. Extend full expensing to leased assets, allowing hire firms to reinvest £1.3bn a year in new capital equipment.
4. Maintain the current Fuel Duty rate, protecting SMEs hit by the loss of red-diesel relief.
5. Retain Business Property Relief, preventing succession-related closures of family-run firms.
6. Reform the Growth & Skills Levy to give employers full flexibility and fund all SME apprenticeships
Steven Mulholland, CEO of the CPA, said: “This report is a call to action for ministers. Britain’s construction pipeline is cracking under the strain of unrealistic targets, uncertain funding and a shrinking workforce.
“Unless the government restores confidence and fixes the fundamentals, the next decade will be defined by half-built promises and rising costs.
“The plant-hire sector is one of the most capital-intensive in the economy, with our members shouldering much of the investment risk needed to keep Britain building. With stable policy and predictable pipelines, we can channel private capital into public infrastructure without adding to national debt.
“If ministers match our willingness to invest with clarity and confidence, we can turn ambition into action and build the growth, jobs and prosperity Britain needs.”
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