A new report has warned that Britain’s £530 billion construction and infrastructure pipeline is ‘starting to crack’, with skills shortages, falling investment, and delivery delays threatening to derail growth plans.
The report, compiled by Oxford Economics for the Construction Plant-hire Association (CPA), states that flagship projects such as new hospitals, homes, and airport expansions, are at risk of grinding to a halt. However, it also highlights the opportunity for government and industry to work together to unlock investment and close the productivity gap.
The analysis 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 skilled operators underpinning construction say they cannot plan or invest without predictable workloads, leaving delivery capacity ‘dangerously thin’.
The report highlights 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. Furthermore, 44% of firms report labour shortages restricting activity and apprenticeship completion has slumped to 53%. Construction productivity has declined 0.1% a year since 1997, and only 14% of major government projects are rated on track.
The report identifies Britain’s productivity problem as primarily a capital problem. Decades of under-investment in machinery, technology, and infrastructure have left the UK falling behind its competitors.
Steven Mulholland, CEO of the Construction Plant-hire Association, 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.”
Oxford Economics notes that while government capital spending is set to rise by 3.6% annually to 2029-30, much of this is already absorbed by energy transition costs and existing liabilities.
The CPA has submitted a package of policy proposals to the treasury ahead of the autumn budget to stabilise delivery and restore confidence across the construction supply chain.
The plan includes a reversal in the rise in employer National Insurance; an extension of full expensing to leased assets, allowing hire firms to reinvest £1.3 billion a year in new capital equipment; and retaining Business Property Relief, preventing succession-related closures of family-run firms.
