The housebuilding industry has long been grappling with skills shortages, with the Construction Industry Training Board predicting that a further 152,000 workers are needed to deliver the government’s ambitious housing targets.

A further challenge lies in the aging workforce—data from the Home Builders Federation reveals that one in four builders is over the age of 50.

To tackle both the skill shortages and the looming retirement crisis, the sector needs a new wave of young talent. This requires increased investment in training, particularly apprenticeships.

At Close Brothers Property Finance we have long championed the role of SME housebuilders, many of whom have been particularly hard-hit by the skills shortages. As such, wanted to support some of our clients to finance apprenticeships by gifting a proportion of the funds we pay into our Apprenticeship Levy.

In spite our best efforts, including speaking to several trade bodies and educational charities, this has proven far more complicated than expected.

In the face of various administrative hurdles, we’ve since come to the conclusion that the Apprenticeship Levy, while well-meaning, essentially functions as an indirect tax. With its ‘use it or lose it’ rules any funds that have not been deployed within 24 months are returned to the Treasury.

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In the autumn statement it was announced that the Apprenticeship Levy would be scrapped and replaced by the growth and skills levy. This means businesses will have greater flexibility to use the money for a broader range of training, such as short courses, online masterclasses and other programmes for upskilling.

Employers will be able to spend up to 50% of their levy contributions on non-apprenticeship training. Separately the government announced a £140 million investment to create 5,000 additional construction apprenticeships annually to accelerate training in key construction trades including bricklayers, plasterers, roofers, electricians and carpenters.

Employers may welcome greater discretion to use funds for a broader range of training, but concerns have been raised that the measures may ultimately reduce the number of available apprenticeships.

In particular, there are fears that limiting funding of advanced apprenticeships – at a time when demand has hit record levels – could jeopardise the government’s growth mission.

The government has rightly recognised that tackling the housing crisis is critical to driving economic growth, but this will only be achievable with a system to support a substantially greater number of apprenticeships.

Encouragingly, a survey of 233,000 young people by the Careers and Enterprise Company carried out last year shows that construction is now the sixth most popular career choice by the time students are doing their GCSEs.

The demand is clearly there but until the government removes the red tape that has prevented many businesses from making use of their own funds or gifting them to another organisation, then I fear smaller businesses and young people stand to miss out and the country risks falling even further behind on housing targets.