Britain pledges 600 million pounds to tackle construction skills shortages

LONDON (Reuters) - Britain will invest 600 million pounds ($775 million) to train construction workers and help tackle severe skills shortages that could undermine its plan to build 1.5 million homes by 2029 and boost economic growth, it said on Saturday.

Housebuilding and improving British infrastructure are key parts of the Labour government's growth strategy. Construction represents around 6% of gross domestic product, but underpins growth in other sectors.

"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," finance minister Rachel Reeves said in comments emailed by the Treasury on Saturday.

"We've overhauled the planning system that is holding this country back, now we are gripping the lack of skilled construction workers."

Britain's struggle to fill construction jobs was exacerbated by the 2016 Brexit vote and later COVID-19, which has led to higher vacancy levels than before the pandemic.

Official figures published earlier this week showed there were 38,000 construction vacancies in the three months to February.

Many skilled workers are also nearing retirement age. The Construction Products Association estimates that the industry will lose 500,000 employees, representing 25% of the total workforce, to retirement over the next 10 to 15 years.

The government said it would spend 165 million pounds of the planned investment to deliver more construction courses at colleges, and 100 million pounds to upskill existing, new and returning workers.

The Construction Industry Training Board, which represents homebuilding as well as infrastructure sectors, will contribute an additional 32 million pounds to fund over 40,000 industry placements a year over the next four years.

The government expects the total package to train up to 60,000 bricklayers, electricians, engineers, and carpenters by 2029.

Reeves is likely to announce belt-tightening measures to get back on track to meet her fiscal rules when she delivers her spring statement next Wednesday alongside new economic and public finance forecasts from Britain's fiscal watchdog.

($1 = 0.7741 pounds)

(Reporting by Suban Abdulla; Editing by Emelia Sithole-Matarise)