The ‘build back better’ construction dilemma
The build up
There has been growing concern about the crisis building in construction. This crisis is bearing down on two fronts and could easily become a barrier to government hitting their ambitious 300,000 new homes per year target. The first issue is supply of materials, the second the availability of skilled workers.
The government’s plan is to ‘build back better’ from the pandemic. That’s taken literally on the housing front. However, alongside demand for materials increasing, from homeowners extending and renovating during the pandemic and new housing projects being driven forward, supply of materials has fallen, and prices have driven up. The pandemic and Brexit are clearly the key factors in this predicament.
The same issues also causing a headache on the availability of a skilled workforce too. A lack of skilled tradespeople in the construction sector is nothing new. But the impacts of Covid-19, especially the first lockdown and the hard stop that had on construction, have caused this issue to become much more acute. EU nationals have headed for home nations and an ageing workforce has seen many hang up their hard hats as they retire.
Government could implement a raft of interventions to help remediate the growing issues in a key sector that will drive economic post-pandemic recovery. There’s a need to look at working hours in the construction sector and to ensure the sector is given as close to the same rights to flexible working as other sector workers will get as possible.
However, government also need the sector to appeal to a younger, more digitally savvy demographic. The newly announced apps from MHCLG for permitted rights development on the homeowner and local authority sides are encouraging. But the sector needs to implement more tech-driven ways of working into their day-to-day processes. The need for technology within the sector will also be driven and focussed by the Government’s Net Zero targets, the MMC and the retrofit agendas but digital ways of working will also help to attract a younger set of applicants. Stability in pay and working hours will help with recruitment in the sector as well, not only in the younger demographic but across the board. Too many roles are currently zero hour contracts and a better rate of pay across the industry alongside reliable hours seems like a simple fix but a crucial one for a skilled workforce.
Solving the problem of materials, demand and price is more complex. The Construction Leadership Council recently noted cement, timber, steel and other materials were in short supply in the UK and that high demand was due to continue. A key factor in this shortage of supply is a lack of hauliers. Again, this is mainly due to Brexit and the pandemic. The FT recently reported that a severe delay in new hauliers being able to take tests due to Covid-19, an ending of EU national recruitment and self-employment tax reform causing EU drivers leaving. Again, the government will need to work quickly to rectify these challenges to ensure this issue doesn’t intensify and become a national source of pain for the sector and the government in the recovery from Covid-19.
Surveying the issue in the round
Covid-19 policy interventions aside, this government is wedded to delivering the 2019 election manifesto, treating their pledges made in the election as a governmental to-do list. Despite the upheaval and scarring impacts of Coronavirus, there’s been no stopping the government ticking off their manifesto commitments pledge by pledge. Social Housing White Paper; brought forward, planning reforms; controversially in progress, First Homes; now on the market, but the availability of both materials and skilled workers has the ability to stop government in their tracks and hinder the economic and housing recovery from the pandemic. Strong policy interventions to improve the availability of materials and skilled people is key. But speed is also a vital factor on the government side as well, ensuring the ‘build back better’ mantra is followed as the public expect and the government want.
BECG and Cavendish Advocacy bring together national and local expertise to ensure those in the construction industry are communicating with the stakeholders that matter, from the parish council to No10. We can help keep you updated with crucial government policy as we move through the latter part of 2021 through events and research throughout the year. For further information and advice, please contact Max Camplin.