{"id":514693,"date":"2025-03-10T10:17:29","date_gmt":"2025-03-10T10:17:29","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=514693"},"modified":"2025-03-10T10:17:29","modified_gmt":"2025-03-10T10:17:29","slug":"seddon-warns-of-training-trouble","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/sections\/long-reads\/interviews\/seddon-warns-of-training-trouble-10-03-2025\/","title":{"rendered":"Seddon warns of training trouble"},"content":{"rendered":"

Director Nicola Hodkinson says changes to employers\u2019 NI and the minimum wage will not help the skills crisis<\/strong><\/em><\/p>\n

Nicola Hodkinson is not happy.This April brings a double whammy of costs for contractors, with increases in both employer national insurance contributions and the minimum wage.<\/p>\n

In her first Budget announcement last October, chancellor Rachel Reeves revealed a 1.2 percentage point increase in employers\u2019 national insurance (NI) contributions from 6 April, and the salary threshold at which employers start paying will drop from \u00a39,100 to \u00a35,000.<\/p>\n

\u201cToo much of the industry relies on self-employed workers, which stifles the development of the next generation\u201d<\/p>\n

Nicola Hodkinson, Seddon<\/h4>\n<\/blockquote>\n

Meanwhile, employers will have to increase the minimum wage for 16-17 year olds and apprentices by 18 per cent, and for other workers by 6.7 per cent.<\/p>\n

This \u201caffects all our apprentices, which are 11 per cent of our [construction] workforce\u201d, says Hodkinson, co-owner and director of contractor Seddon Group. It will have a \u201chuge\u201d impact on overheads and acts as a disincentive to take on more apprentices, she adds.<\/p>\n

\u201cThese measures are a slap in the face for large employers,\u201d Hodkinson says. \u201cWhen you\u2019re competing against labour-only contractors who don\u2019t have the overheads of employing staff, it becomes a significant challenge.<\/p>\n

\u201cWhen you\u2019re pricing jobs nine months before you get on site, on schemes that have two years to run out, and you have to put in your labour costs \u2013 it\u2019s not good.\u201d<\/p>\n

Marginal pains<\/h3>\n

Seddon ranked 100th in the CN100 2024 ranking of top contractors, slipping from 74th the year before, as other firms overtook it in turnover. However, Seddon returned to profit, which it attributed to tighter cost control and greater selectivity in bidding for new long-term contracts.<\/p>\n

Group turnover rose by 4.4 per cent from \u00a3153.9m in the 2022 calendar year to \u00a3160.7m the year after. This generated a pre-tax profit of \u00a31.6m compared with a loss of \u00a313m the year before, and a margin of 1 per cent \u2013 half the CN100 average.<\/p>\n

\u201cWe cannot carry on with such tight margins. If we can\u2019t make money\u2026 we can\u2019t do skills… We have to have profit. It can\u2019t be a dirty word\u201d<\/p>\n

Nicola Hodkinson<\/h4>\n<\/blockquote>\n

In Hodkinson\u2019s opinion, low margins reflect how contractors often race to the bottom on price in order to win business. \u201cWe cannot carry on with such tight margins in such a high-risk environment,\u201d she says.\u201cIf we [as a sector] can\u2019t make money, we can\u2019t do research and development, we can\u2019t do skills, we can\u2019t take the apprentices on. We have to have profit. It can\u2019t be a dirty word.\u201d<\/p>\n

Seddon faces other headwinds familiar to the sector, such as uncertainty around public sector projects. \u201cWhen funding decisions are delayed, it doesn\u2019t just stall projects; it forces us to expend more resources to keep things moving,\u201d she says. \u201cThat\u2019s a burden many companies struggle to bear.\u201d<\/p>\n

In her view, growth must be carefully calibrated and not based on the pursuit of revenue for its own sake. \u201cGrowth for us isn\u2019t about chasing bigger numbers; it\u2019s about securing the right projects with the right clients,\u201d she says. In practice, this means avoiding projects with unrealistic pricing that could lead to financial strain and high-stress work environments for employees.<\/p>\n

Public-sector frameworks are important for Seddon. For instance, the firm is involved in Pagabo\u2019s \u00a31bn framework, Fusion21\u2019s \u00a3125m decorating framework and an \u00a38bn framework from Procure Partnerships.<\/p>\n

Last year, the Bolton-based contractor also won a place on frameworks from the North West Construction Hub, the Communities and Housing Investment Consortium and Efficiency North.<\/p>\n

\u201cA lot of the national public sector frameworks are renewing in 2025. Our bid team isn\u2019t going to have much time off over the next 12 months,\u201d Hodkinson says.<\/p>\n

Still, she expresses uncertainty over how pledges of more government cash post-Budget will translate into tangible opportunities for construction firms. \u201cThere\u2019s potential for us to secure a fair share of this investment, but it will take time for these funding announcements to filter through as work for contractors,\u201d she says.<\/p>\n

Hodkinson is also concerned about the construction sector\u2019s structural weaknesses in workforce development. \u201cToo much of the industry relies on self-employed workers, which stifles the development of the next generation,\u201d she says.<\/p>\n

The result is a sector that struggles to scale up when demand surges, Hodkinson argues. \u201cWithout significant incentives to hire apprentices \u2013 especially when costs are rising due to wage hikes \u2013 this problem will persist.\u201d<\/p>\n

Training frustration<\/h3>\n

Hodkinson is also frustrated with the state of training. \u201cThe CITB [Construction Industry Training Board] has been around for decades, yet we\u2019re still facing a skills crisis,\u201d she says. \u201cI do quite a lot of work with them but they\u2019re not making a difference.\u201d<\/p>\n

She proposes that funds currently allocated to the CITB could be redirected to more effective training programmes within companies.<\/p>\n

Hodkinson calls for higher for state subsidies for apprenticeships to offset the initial costs borne by employers. \u201cIf the government could invest \u00a310,000 per apprentice over two years, we\u2019d
\nsee a real shift. It worked during Covid, and it could work again.\u201d<\/p>\n

While Hodkinson does not downplay the sector\u2019s challenges, her outlook is far from pessimistic.<\/p>\n

Seddon has secured about 85 per cent of its order book for the coming year, which she sees as a positive foundation for growth. Thanks to a mix of frameworks and short-term contracts, parts of the group \u2013 such as Seddon\u2019s painting and maintenance division \u2013 can operate with short turnaround times of four to eight weeks.<\/p>\n

This agility has been key in helping the contractor to fill gaps in its pipeline and maintain steady progress, even as the market fluctuates.<\/p>\n

\u201cWe\u2019ve positioned ourselves as a responsible employer and partner, and that\u2019s our strength,\u201d she says. \u201cWe\u2019re not just reacting to market pressures; we\u2019re shaping our response to ensure we thrive in the long term.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Director Nicola Hodkinson says changes to employers\u2019 NI and the minimum wage will not help the skills crisis Nicola Hodkinson is not happy.This April brings a double whammy of costs for contractors, with increases in both employer national insurance contributions and the minimum wage. In her first Budget announcement last October, chancellor Rachel Reeves revealed …<\/p>\n","protected":false},"author":135716,"featured_media":504486,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[570,559,575],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n