KPMG warns of project delays because of lack of labour

The UK needs more construction staff to deliver the increase in Government construction pipeline, warns consultant. At the same time an Atkins study has said £2.5bn investment needed in STEM training.

By the end of 2016, spades will be in the ground in over 80% of the projects in the UK Government Construction Pipeline, according to analysis published by KPMG.

The analysis indicates that 84% of the projects included in the pipeline (2,656) are expected to have commenced construction by 2016. This includes 1,279 projects which are reported as being already under construction. The uplift in the number of projects due to start will add to the pressure on the construction industry which is already struggling with an acute shortage of skilled labour.

“It is encouraging to see the Government’s pipeline of construction and infrastructure projects continuing to grow in both volume and value. It is not yet clear however whether the industry will be in a position to deliver the 84% of projects due to start by 2016,” said KPMG UK head of infrastructure, building and construction Richard Threlfall. “There is currently an acute shortage of skilled labour in the industry and unless that is resolved soon some projects will be delayed.”

The report, UK Government Construction Pipeline - KPMG Analysis, reflects 3,148 projects covering 16 sectors with a total value of approximately £128bn being procured by central and local government in three spending periods: 2014-16, 2016-20, and 2020 and beyond.

The analysis shows a massive increase in the number of projects since the last pipeline produced by the Government, from 1,886 in July 2014 to 3,148 in December 2014, an increase of 1,262. This is largely due to projects that were previously grouped into larger programmes now represented as individual projects. But the total value of the pipeline has also increased by £11.6bn due to additional spending on nuclear decommissioning and the Priority Schools Building Programme.

The analysis also reveals that:

  • Transport projects continue to dominate the pipeline, accounting for £66.5bn or 52% by  value
  • Justice, MoD and Police projects represent over 80% of projects in the pipeline by volume  

The KPMG report follows other research including the Atkins Skills Report which appeared earlier this month and was researched with 40 leading owners, consultants, contractors and academics in the infrastructure sector. This suggested that  the cost of training enough peope in science, technology and enginering to meet the demands of the economy could cost £2.5bn but that better strategic planning focused on minimising the impact of the skills shortage could save over £6bn on the delivery of the National Infrastructure Plan.

Recommendations in the Atkins report were;

  • Better use of innovation and technology – could reduce the burden on human resources
  • Better planning, prioritisation and coordination of resources across all infrastructure types – prevents projects competing and allows skills to be applied more evenly rather than having peaks and troughs. This requires investment to ensure skills are transferable.
  • Early supplier involvement – helps ensure the right questions are asked when defining projects and the right solutions are implemented.
  • Address immigration issues – this is controversial but more work is needed to ensure that if needed, highly skilled people from overseas can be used to help deliver key infrastructure projects on time and on budget.
  • Industry to commit to providing more career entry routes for young people – for example the 5% club which commit companies to having a percentage of their workforce on formal education schemes.
  • Continue industry focus on changing perceptions of the profession and attracting young talent. "There’s some great work going on at the moment but we have to be less fragmented in our messaging and focus. Our first priority should be to make a collective effort to persuade people to [pursue engineering careers. We can worry about which company they work for at a later date," the report said.
  • Improving diversity is important. For example, doubling the percentage of women currently working in the sector will add an additional 96,000 people to the resource pool.

The detailed KPMG report can be found here.

The detailed Atkins report can be found here.

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