The FMB’s Brian Berry takes a look at the changes that must be seen in Government policy to allow SME builders to thrive in these uncertain times.
2021 has started on a positive note. Only a matter of hours into the new year, we had already left some of the uncertainty and inertia of 2020 behind us, with the signing of the post-Brexit trade deal. This deal is welcome news for business, but it must deliver for builders by removing the barriers they face to building back better and greener.
I hope that with the security of the UK/EU trade deal, we will start to see improvements in the flow of construction materials into the UK. The FMB is constantly liaising with representatives of the merchants and manufacturers to ensure that the supply chain is in step.
Of course, the ongoing pandemic continues to make this a worrying time for everyone, and it is more important than ever to make sure that UK builders are working in a Covid-secure way.
In the run up to 1 January, builders in all sectors of the construction industry were reporting major concerns over material shortages and delays at the ports. Data from the Federation of Master Builders’ latest State of Trade Survey, the only survey of its kind to track the experience of small to medium-sized (SME) construction firms across the UK, found that 86 per cent of builders were reporting material price increases. The survey also found 83 per cent of builders anticipated further price increases going into the winter months. FMB members have told me that timber has consistently been in short supply, as well as plasterboard, plaster, concrete products, bricks, roofing materials and plastics.
Throughout 2020, the State of Trade Survey painted a concerning picture for SME housebuilders, with workloads remaining firmly in negative territory for the first three quarters of the year. However, when asked to report on the level of enquiries that respondents had received, housebuilders were far from optimistic about the future.
Bucking the trend of recent years, the survey found that construction skills shortages had eased. One in three builders (29 per cent) reported challenges with recruiting bricklayers, and one in four (25 per cent) reported difficulties finding carpenters/joiners. I believe that these statistics on skills should be taken with a pinch of salt, as lower workloads will inevitably mean that more tradespeople and subcontractors are available. While access to skills may have improved in the short-term, the ongoing lack of training will again lead to shortages when output recovers. SMEs must also adapt to a new immigration system, and we must wait to see what impact this has on the skills shortage.
Concerningly, data from the Department for Education shows that total starts on apprenticeships in Construction, Planning and the Built Environment have been declining year on year since 2018. Just 21,900 apprenticeships were reported in 2019/2020. This means that the Government has failed to meet their commitment to grow this to 25,000 by 2020 as part of the Construction Sector Deal. More must be done to support our small building companies to train. After all, SMEs train 71 per cent of the industry’s apprentices.
Ahead of the March Budget, I am calling on the Government to do more to help the SME housebuilding industry continue supporting our economy and creating the sustainable and skilled jobs that are urgently needed.
We are joining calls to extend the Stamp Duty Land Tax holiday to help ensure that all new sites that have been started on, as a result of this welcome boost to the market, can be completed and sold. We cannot afford work onsite, and the housing market, to grind to a halt overnight.
I will also be calling for more investment in local authority planning departments. The challenges with homeworking have inevitably caused delays, meaning there are bottlenecks in the system. My members are consistently raising the planning system as a cause for concern.
The Government has an important opportunity to take advantage of our new post-Brexit circumstances, support struggling businesses, and keep our economy going.
This is also an important year for the FMB, as it has now been 80 years since a group of small London housebuilders came together to set up a Federation that would support the rebuilding of London after the Blitz. We must go into this year with the same spirit of collaboration, and placing SME housebuilders at the heart of plans to build back better.