Self-employed sub-contractor rates hit an all-time high

In recent months and years there’s been very little to report other than doom and gloom –within the construction industry or across the economy as a whole – so the news that building site contract rates throughout England and Wales (with the exception of the West Midlands) have increased significantly in the last year is very welcome. Overall, August earnings in 2022 were 4.6% higher than in August this year – in The East, South West and North West they are the highest ever and in London, the South East and East of England average weekly pay for self-employed sub-contractors has topped £1000.

In times of almost unprecedented uncertainty, the news will be heartening for skilled tradespeople throughout our industry – especially plasterers, whose pay has increased the most (up 10.5% to £927 per week). This is doubly encouraging coming from a source with impeccable credentials and credibility: Hudson Contract – Britain’s biggest subcontractor payroll provider, who handle payments for over 2000 UK construction companies.

So what is the underlying cause? Predictably, this is all about supply and demand – the latter fuelled by a wealth of major infrastructure and housing projects. While demand for skilled tradespeople is still robust, their pay is increasing because they are in short supply as the medium-to-long-term effects of Brexit begin to be felt. In simple terms, the supply of subcontractors has been abruptly switched off – so the EU citizens who went home or who have since retired are not being replaced.

In the short-term, this is very good news for the self-employed ‘subbie’ – but the industry as a whole needs to take a long-term view and consider how to secure the skills that are vital to growth. In simple terms, the UK simply does not have enough skilled and trained tradespeople at the moment – and, as Construction News pointed out in August, there is a serious shortage of education relevant to out industry, with 85% of colleges lacking teaching staff for higher level construction courses.