On 20th October 2011 the Federation of Master Builders gathered together MPs and experts from across the construction industry to discuss the ‘Building for Growth' policy recommendations. The recommendations are designed to help ensure the construction industry can play a central role in the economic recovery, and are driven by a number of the Government's current policies. Importantly, there is cross-industry support for the ‘Building for Growth' recommendations, which have been developed as part of the Get Britain Building Campaign.
Output in the construction industry has declined significantly since 2008 and the return to growth in early 2010 was only short-lived. Prospects for growth in the coming years currently look weak and a continued crisis in the industry will harm the wider economic recovery. The ‘Building for Growth' Parliamentary Briefing event was organised to help the industry engage with Parliamentarians and challenge them to persuade the Government to maintain a focus on creating growth in construction.
In order to gather further support for the ‘Building for Growth' recommendations, leading industry magazine Construction News also participated in the briefing event and coverage will help spread these important messages far and wide.
‘Building for Growth. More Homes, Less Carbon' focuses on four key policy themes. These are: jobs and growth, more homes, less carbon and access to finance. A summary of the discussion is provided below under these headings.
Jobs and growth
The Government still needs to go further to develop a plan that will deliver jobs and growth in construction and the wider economy.
In order to thrive, the construction industry relies on a mix of private and public sector spending. In response to the national debt crisis, the Government is seeking to set the right conditions for growth at the same time as cutting public spending.
There is a view that the Government should spend more on building new social housing, but in the absence of a large amount of new public money steps must be taken to increase the level of activity in the industry. Recommendations still include a cut in VAT to 5% on all home repair and improvement work and government support to increase mortgage lending.
Funding for apprenticeships has been a priority for the Government. However, without an increase in construction activity it is extremely difficult for employers to offer sustainable construction apprenticeship opportunities.
More homes
There is broad support from the construction industry for the Government's proposed planning reforms. The draft National Planning Policy Framework is about encouraging positive planning and the industry believes that it should, in general terms, be adopted as drafted.
The planning system aside, the lack of available mortgage finance is a significant short term barrier to increasing the supply of new homes. The introduction of a new government mortgage indemnity guarantee scheme is supported by the industry as a way of injecting mortgage liquidity into the market and increasing house building activity.
Additionally, the impact of developer contributions, such as Section 106 agreements and Community Infrastructure Levy charges, to assist with social housing and other projects is known to limit the viability of potential development sites. Therefore, the Government should bring forward proposals for reducing the cumulative burden on developers.
Less carbon
It is now commonly understood that the UK must move towards a low carbon built environment in order to meet its legal commitment to reduce carbon emissions by 80% by 2050.
In order to tackle existing buildings, the Government has passed legislation introducing the Green Deal, which will allow energy efficiency upgrades at no up front cost. Despite the Government's expectations that the Green Deal will create thousands of new jobs, businesses tied to the existing repair and maintenance market remain uncertain about the likely impact of Green Deal finance.
One central concern is that micro, small and medium-sized businesses will be excluded from the market, and may even lose existing work. Currently, it is expected that energy companies, major contractors, big retailers and other large businesses will be the only ones likely to take on the role of the Green Deal Provider due to the cost and risk involved. The Green Deal Provider will arrange the finance and manage the contract with the consumer. Many are expected to carry out all of the work entirely in-house, whereas others may sub-contract to 'preferred providers'. Therefore, the industry would like to see a ‘special delivery finance vehicle' that will enable accredited Green Deal installers to offer Green Deal work to clients. This would ensure small business have direct access to the Green Deal market.
The level of consumer interest in the Green Deal is also uncertain. Additional financial incentives are needed to ensure the Green Deal finance packages are sufficiently attractive, and effective government communication must be a priority in order to ensure a meaningful level of consumer awareness.
Access to finance
MPs now accept that many businesses are being judged against the sector in which they operate rather than on an individual, case-by-case basis when asking their bank for finance. This is not appropriate and the Government must continue to apply pressure to the banks to ease the flow of vital and affordable credit in order to avoid further long term damage to the economy.
Get Britain Building Parliamentary Champions
The following MPs will act as champions for the Get Britain Building Campaign, which will help to ensure the issues outlined above are raised inside Parliament and during discussions on party policy.
Brian Binley MP - Conservative, Northampton South
Lorely Burt MP - Liberal Democrat, Solihull
Steve Rotheram MP - Labour, Liverpool Walton
