Earlier this month we celebrated Scottish Apprenticeship Week (3-7 March), a chance to appreciate the fresh new talent joining the workplace.

Construction remains the top sector in Scotland for modern apprenticeships, accounting for more than a quarter of all starts in this current financial year.

This is so encouraging as it’s estimated that here in Scotland we need more than 5,000 extra workers each year to power the construction of all the new homes and infrastructure we so obviously need.

I’m proud that the construction industry has a long-standing history of training apprentices.

But there are concerns within the sector in relation to forthcoming changes to apprenticeship pay rates which could threaten this critical pipeline of talent that our industry needs to survive and thrive.

Pay pressure

At the start of April, the National Minimum Wage rate for apprentices is going up by 18%. This is on top of recent significant increases; for example the apprentice rate increased by 21% last year. 

In the construction industry, we all know and understand the positive business impact of training apprentices and the pride in passing on skills from one generation to the next. I served my time as an apprentice joiner and have trained a number of apprentices over the years. 

We need apprenticeships to fill skills gaps, attract talent to our sector and develop and grow the construction workforce. 

But while the Scottish Building Federation has always taken positive steps to ensure apprentices are treated fairly and engaged on appropriate terms, there is a balance to be struck. We are worried that the rising costs of employing apprentices may deter employers from making the commitment to recruit an apprentice. 

Already, we are hearing anecdotal evidence that craft apprenticeship numbers are beginning to tail off slightly at a time when the industry needs to recruit thousands of workers each year.      

Political commitments 

The National Minimum Wage is a reserved matter and is set in Westminster. The Labour Government was elected in 2024 with a manifesto commitment to “make sure the minimum wage is a genuine living wage” and to “remove the discriminatory age bands, so all adults are entitled to the same minimum wage”.

We, therefore, expect further uplifts in the coming years to accompany the additional rules and regulations (and costs) in the incoming Employment Rights Bill – although increases to employer National Insurance contributions will not apply to apprentices under 25 years of age.

Counting the cost

So can we count the financial impact on the industry of this impending rise?

Definitively calculating the cost is complicated slightly as apprentices are entitled to the minimum wage for their age if they are aged 19 or over AND have completed the first year of their apprenticeship.

But we do know aggregate wage costs across the four years will be between approximately £70,000 and £90,000 per apprentice, depending on the apprentice’s age at the beginning of their time-served period.

This is a substantial financial commitment for any employer but particularly for SMEs (small and medium enterprises) who take on the majority of apprentices in our industry.

Craft apprentices typically start to cover costs and make a return for their employer in the third and fourth years of their training so there has to be certainty around future workloads to make this level of investment.

Traditional craft apprentices in Scotland attend college for around 30 weeks across first and second year to learn a broad spectrum of their trade - much longer than counterparts south of the border. Consequently, off-the-job training costs will increase substantially in Scotland.   

Support and funding

At the Scottish Building Federation, we are acutely aware of the additional demands that imposed portfolio evidence requirements have introduced both for the apprentice and the employer and we have worked tirelessly over recent years to address the problems with the apprenticeship qualifications and the unacceptable delays which have arisen.  

Grants totalling £14,500 spread across the four years of a craft apprenticeship are available to employers from CITB and this can mitigate the costs incurred in training an apprentice. We encourage all employers to make sure they are claiming this funding and will be asking CITB to consider increases in apprenticeship grant funding as a priority going forward.       

The future of Scotland’s construction industry hinges on our ability to nurture the next generation of skilled workers.

The apprenticeship proposition has to be cost-effective for employers and we must take care to ensure that we retain an economic model that encourages employers to recruit and train apprentices.    

For our part, the Scottish Building Federation will continue to make representations to political decision-makers highlighting the rising financial commitments being asked of employers and their potential impact. 

Now is the time for collaborative action to safeguard the apprenticeship model and ensure a sustainable future for Scottish construction.

• Billy Kirkwood has been a Scottish Building Federation director since 2009, and has been managing director of RDK Construction Ltd for over 33 years.