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Construction skills shortage threatens infrastructure projects amid growing interest from pension funds

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A dire shortage of construction skills and persistent planning delays pose significant threats to infrastructure projects, despite heightened interest from pension funds to invest in the sector.

An acute shortage of construction skills and persistent planning delays pose a significant threat to infrastructure projects, despite increased interest from pension funds to invest in the sector.

Randstad’s analysis shows that there is an urgent need to recruit 500,000 people to meet demand for ongoing large-scale projects and future plans, including the Lower Thames Crossing, the National Grid extension and the Stonehenge Tunnel.

Simon Harris, head of construction at the recruitment firm, underlines the sector’s capacity challenge, which is being exacerbated by the drain of talent from the housebuilding sector. Since 2008, the construction workforce has shrunk by 465,000 workers, creating a major labor shortage amid escalating demand, particularly for green energy initiatives.

Harris warns of a looming ‘brutal labor shortage’ as demand for infrastructure increases, with projects such as HS2 and Sizewell C competing for skilled workers.

Meanwhile, pension fund leaders are signaling intentions to boost investment in the UK’s infrastructure, with almost two-thirds planning to increase spending. GLIL Infrastructure’s research highlights the energy transition as a priority for 70% of respondents, citing investments in battery storage, hydrogen and carbon capture.

Ted Frith, COO at GLIL, underlines the crucial role of patient capital in financing infrastructure projects essential to the UK’s transition to a sustainable, net-zero economy. However, he raises concerns about Britain’s attractiveness for investment, citing long-term planning delays that are hampering infrastructure upgrades.

As pension funds declare their readiness to allocate capital, Frith underlines the urgent need to address planning inefficiencies to enable smoother project delivery and boost investor confidence in the UK infrastructure market.