The next government must support the UK's world-class construction sector
Theresa May and Jeremy Corbyn agree on one thing: infrastructure and housebuilding must be at the heart of the next government’s plans to boost productivity, economic growth and wages across Britain.
They both know that we need to get the whole of the country fit and strong and able to flourish post-Brexit and, crucially, able to maintain and strengthen Britain’s position globally.
So whoever wins on Thursday, here’s what we know. Major construction projects such as the three Hs – Heathrow, HS2 and Hinkley Point – will all go ahead. The recently elected metro mayors will be campaigning hard for Whitehall funding for further projects across their regions. Sadiq Khan will be loudly championing the benefits of Crossrail Two to get it back onto the political agenda.
It’s quite simple: the investment of billions of pounds in new energy, housing, rail and road projects will be absolutely critical for the UK’s growth prospects.
This will not be achieved without a strong British construction sector: British companies, that have a track record in delivering major projects – such as The Shard and the London 2012 Olympic and Paralympic Games – on time and on budget.
Our next government cannot have its cake and eat it (sorry Boris). When it comes to infrastructure delivery, the construction sector must have a clearer idea of where the country is heading on some key policy areas.
Bob the Builder might be able to fix it most of the time, but he needs skilled people, a reliable and healthy supply chain, affordable materials and sensible margins – otherwise Bob will soon be in trouble.
Brexit has caused uncertainty for the construction sector – notably in manpower and materials. Figures from Mace’s own construction sites highlight the scale of the challenge. Just under 40 per cent of workers on our sites are from the EU, and nearly 50 per cent altogether are from overseas.
For an industry which is already facing skills shortages, a lack of available qualified workers jeopardises our ability to deliver these major projects. Compounding this is the fact that we’re facing a shortage of UK talent – over 400,000 construction workers are due to retire over the next five-10 years, and we need a stronger pipeline of young, talented people to replace them.
One element of the solution to this is clear: we need to make sure that, whatever Brexit deal is agreed, Britain has an immigration policy that works for business and the country. This means one that minimises bureaucratic delays and allows British businesses to have controlled access to overseas talent to meet labour gaps.
Home-grown talent is another part of the solution, but the medicine in our sector is having nasty side-effects. This is the stealthy “double tax” that is already affecting the sector’s ability to invest. The recent Apprenticeship Levy was a welcome move. It makes sense in theory and we all understand the need to invest in skills and training in every British industry. But our industry already has one. Harold Wilson introduced something nearly identical in 1964 called the Construction Industry Training Board levy that still exists today. Being subject to two levies means that the construction industry is the victim of government double-dipping.
The construction industry is also very different to most other sectors and works on pretty slim margins. This double-dipping places a double financial burden on the already squeezed British companies that the government says it is relying on to deliver our vital infrastructure.
We need to see this for what it is – an unintentional tax on new infrastructure and construction jobs that could significantly limit the sector’s ability to invest in innovation to improve how projects are delivered. Some construction firms, particularly smaller companies within the supply chain, are already struggling. This could even push them under and reduce the breadth, competition and choice within the industry.
This double-dipping also limits our industry’s investments in new technology and innovation. The construction industry is ripe for disruption, and we are making some progress. But we want and need to do more and without the benefit of the same support given to other important UK industries (like automotive, aviation and pharmaceuticals), we will struggle to direct more investment to where it’s needed.
The British construction sector is primed and ready to step up to the plate in the UK and overseas, but we cannot operate with one arm tied behind our backs. If our future government really wants to deliver world class projects that Britain can be proud of, projects that help get Britain match fit post-Brexit, whoever is in power needs to throw their support behind our world-class construction industry.
Give us access to top quality people (from anywhere in the world), stop the double dipping, and help us to invest to create an industry that will benefit all our futures.
This article originally appeared in City A.M
