Top 20 House Building Sector priorities for the New Government
Both during the election campaigns and after the election, there has been much discussion about what the government can, will and/or should do as key priorities to support and help the hugely vital prosperity of the house building sector and for the construction industry at large.
Having seen and read many of these articles, we’ve picked a selection of 20 of the most talked about topics and pulled together 20 of the top priorities which the new government, and the newly appointed housing minister, need to tackle.
- Negotiate a Successful Departure from the EU
It is the biggest political, social and economic issue facing the country for possibly half a century and negotiations are already starting. It has to be the biggest part of the governments priorities list.
Brexit uncertainty has already started to affect the industry, with big-hitters British Land, Landsec and Grosvenor having all predicted a bumpy ride ahead, and uncertainty over Brexit has been indicated as one reason why speculative development has begun to be scaled back.
Housebuilder Berkeley partly blamed Brexit uncertainty in March for a 30 percent fall in housing starts in the four months to the end of February. That uncertainty could have a knock-on effect on business confidence.
“In order to build new projects and continue the momentum on existing ones, there must be a guarantee of rights of EU workers living in the UK”.
- Tackle the Shortfall of Workers
In the next 10 years, around 20 per cent of the industry workforce will retire – about 400,000 people. The industry could face a shortfall of 100,000 workers in the coming years, especially if new restrictions on immigration come into force. Whilst some companies are looking to Offsite Production specialists like Sapphire, many are worried that some of the labour requirements which can’t easily be built offsite are likely to sharply affect both program and costs.
- Reel in Construction’s Boom and Bust Cycle
“Whether major infrastructure can be timed to coincide with downcycles could be asking too much, but if you knew there was a strong and consistent public-sector workload it would be easier to look far into the future and invest appropriately.”
“But to do that we have to know what is coming a decade down the line”.
- Guarantee Access to Skilled Labour
One of the most critical issues to address is just how it anticipates finding the workers we need for major projects while controlling immigration and getting numbers down to the “tens of thousands”. There are many contractors which are starting to embrace offsite construction systems like Sapphire’s Cassette® balconies, many building products aren’t changing as fast as the skilled labour shortage is approaching.
The labour requirements of the huge schemes in the UK’s pipeline are of particular concern.
- Initiate a Major Public Housebuilding Programme
Chartered Institute of Housing chief Terrie Alafat says: “We need to build around 250,000 homes a year in England to keep pace with our population, but we have failed to build anywhere near that number for decades. This is a challenge that needs a long-term plan.”
- Get Inward Investment Back on Track
When it comes to places to park international funds, the UK has long been thought of as a safe bet. However after two elections and two referendums in three years, ending in a hung Parliament and upcoming Brexit negotiations, are changing some investors’ perspectives.
The next government must support the industry with an effort to reverse this trend.
- Put Real Resources into Planning
Planning has long been a thorn in developers’ and housebuilders’ sides. The issue is often resources. Obvious to say, the schemes which will make the biggest impact to the housing crisis are often those which are resource hungry for planning departments. Can planning resources priorities be placed on schemes which will make biggest impact?
- Back Offsite and Modular Technology
Offsite construction has come to be seen as the answer to many problems facing the industry, from increasing margins for contractors to helping solve the housing crisis. Sapphire very much support this approach and produce all their modular Cassette® balconies, which combined with the rapid and patented balcony innovation can dramatically reduce site programs. See more about offsite production benefits
- Rebalance the Housing Budget
Housebuilding has become a top priority in recent years.
However, despite pledges to build one million homes in the lifetime of the previous parliament, of 200,000 homes a year, actual figures are still falling short. Market rent, PRS, private sale and starter homes have all been mooted as the next big thing for would-be homeowners or renters.
With the funds at its disposal the government can shape the direction of the house building sector, and a shift to providing more capital for affordable housing could help boost the stock of homes significantly.
- Tackle Late Payment in the Industry
Late payment is an issue that has dogged construction for too long and the problem doesn’t appear to be getting better. Last year’s Euler Hermes Quarterly Overdue Payments Report found that late payments in the industry had risen by 27 per cent during 2015.
A government that can tackle late payment across all sectors – but especially construction where the issue is arguably more complex than in other industries – could have a huge impact on rising confidence. Wherever late payment is being tackled its a good sign, however prioritise how you like, construction must be right up the list.
- Expand Accelerated Construction Programme
In the housing white paper launched by the government earlier this year, it admitted that the current housing market was “broken”.
One possible way of increasing the supply of new homes is the launch of Accelerated Construction Programme for local authorities.
- Tackle Diversity and Gender Equality
Construction has a dire record when it comes to gender inequality.
Figures reported in April show the pay gap in the industry is up to 5 percentage points higher than the national average.
- Tackle Mental Health in Construction
Insurance firm ECIS reported that mental health was the third largest single reason for absence from work in the sector.
- Maintain Green Standards / Launch a New Green Deal
The main effect of the scrapping of the Green Deal, followed by the abolition of the Code for Sustainable Homes in 2015, was to reduce confidence in sustainability policies. Sustainability has once again been hit a painful confidence blow by the USA and their withdrawn commitment to the Paris agreements having seen it way down it’s own priorities.
- Support EU Workers’ Rights
The impact of EU citizens leaving the UK by the time Brexit is completed in early 2019 could have serious consequences on the sector.
- Improve the Image of Apprenticeships
If the industry is going to replace the generation of workers due to retire in the next half-decade, then helping inspire a new generation to come into the industry is a must for a government top priorities list.
However, we have an image problem. According to the CITB, the number of students completing apprenticeships stands at around 50 per cent, and the rate of dropout in the first year of training is high.
Perhaps partly this is through the new messy CITB training schemes which whilst mandatory to some of the new CSCS cards required, fail to offer any relevant to more specialist trades, for example carpentry courses for balcony installers.
- Back SMEs to Build More Homes
The number of SMEs working in the housebuilding sector is dire. The top 10 housebuilders account for the lion’s share of the sector.
With a revitalised housing association influence and development plans being drawn up, small firms could be squeezed from both sides of the market. If the sector is going to reverse this, it will need government help to do so.
- Press Ahead with BIM Level 3
BIM was identified by the government as an area where its intervention could lead to positive change.
By mandating the use of BIM Level 2 on all centrally procured public contracts, government drove a step-change in the way the industry collected and used data on projects.
Yet the latest report by the National BIM service found that no all government departments are sticking by their own mandate. Also, many in the industry believe that Level 3, which will take in the lifecycle of a building and drive greater efficiencies, is where the real cost of savings can be found.
- Drive Innovative Procurement
Sorting out procurement could take a lifetime. But to prioritise and push ahead with models such as Integrated Project Insurance (IPI) for major projects would be a welcome boon.
Currently undergoing trials in the UK, the IPI model is being tested at Dudley College, where it is expected to cover cost overruns on a ‘no-blame’ basis and to include measures to minimise the risks of delay and cost increases. The plans are part of the construction strategy published in 2011 and updated in 2014.
Whitehall has also embarked on trials of other procurement models such as cost-led procurement and two-stage open book.
- Consider ‘Licence to Trade’ Barriers
The debate about quality of products has become a core issue since the EU referendum, especially since many EU regulations may be dropped after we leave in 2019.
Mr Farmer says quality must be put “at the heart of any construction modernisation agenda, alongside skills, technology and productivity”.
What do you think the top government priorities should be?
