While the Chancellor and the Housing Minister delivered impassioned speeches at the Labour Party conference in Liverpool, we remain light on details or perhaps we are missing the key messages?
The construction industry continues to face significant challenges. The recent collapse of construction giant ISG, which held more than £1bn worth of government contracts, resulted in the immediate redundancy of 2,200 workers. The knock-on effect on small businesses within the sector will be substantial.
This comes on the heels of the Office for National Statistics (ONS) announcing that public sector net debt, excluding public sector banks, was £2,768.0 billion at the end of August 2024, provisionally estimated to be around 100 percent of the UK’s annual gross domestic product.
Additionally, 4,373 construction firms went out of business in the UK in the year to July 2024, a 4 percent increase from the previous year, according to the latest data from the Government’s Insolvency Service. This is bleak news for a Government that aims to deliver on key manifesto pledges, such as housing. However, before it can do so, it must address a skills shortage.
Analysis from Noble Francis, economics director at the Construction Products Association, indicates that European builders have been unable to return to the UK due to stricter visa requirements. This loss has been keenly felt in the 25 to 39-year-old demographic, but the most significant losses have been among UK-born builders aged 45 to 59, who have retired early or retrained for other industries.
Before construction can commence at the rate Labour is proposing, policymakers must address this workforce crisis. Options include creating incentives for older workers to delay retirement or retraining, improving apprenticeship programmes to reduce dropout rates, and simplifying visa processes to attract foreign talent for surviving small businesses.
Furthermore, the algorithm used for new housing construction rates appears to have allocated more potential builds in areas that are not required or lack existing transport infrastructure. This is why the ‘grey belt’ and ‘brownfield passport’ policies are urging Local Authorities to reclassify Green Belt land in some circumstances. This will likely result in tarnished plots of land being remediated for construction use. But why isn’t the Government looking inward?
Why push the responsibility onto Local Authorities when the Government’s own Property Finder on gov.uk lists over 380 properties for sale, some of which are over 300 hectares or more than 700 football pitches in size? Can we not develop these sites instead, streamline the planning process for these wholly owned sites, get building and leave the Green Belt undisturbed for now?
By Christian Lister, Operations Director, X-Press Legal Services
