Brian Berry, CEO of the Federation of Master Builders (FMB), summarises the last few months for SMEs and looks towards future challenges lying before firms this year
A tepid Spring Budget, a bold, if not detailed direction for housing from Labour, and the much-anticipated housebuilding report from the Competition and Markets Authority – it has been a busy few months for the UK’s small housebuilders.
A budget best forgotten
The Spring Budget could have been an opportunity to kickstart the housing market with building rates stagnant, but the Chancellor did nothing to spur on small housebuilders, or large for that matter. This was an opportunity to reform the planning system, boost local authority planning teams’ capacities, and review the financial burdens the planning system places on smaller housebuilders, but again these much-needed reforms have been overlooked.
The Chancellor could have helped to close the construction skills gap ensuring the UK has the workers with the green skills needed to retrofit the UK’s homes, and provided support to help small builders deal with the administrative burden of training apprentices. All these areas could have grown the economy, but instead the nation’s small housebuilders were left behind.
Shadow Chancellor makes big promises
In what was probably her most comprehensive speech yet, the Shadow Chancellor Rachel Reeves set out Labour’s plan for a ‘decade of economic renewal’ at the Bayes Business School Mais Lecture. This was a rare glimpse at Labour’s plans for their potential time in government, the party having been tight-lipped so far. There was a fair time spent on the planning system, which we all know doesn’t deliver the homes we need. She made promises to employ hundreds of new planning officers and reintroduce mandatory housing targets.
These are all laudable ambitions and much needed by the sector, but will the UK’s purse strings allow it? If we see housing as an investment in growth, which we should, this is a great investment for the UK taxpayer, which will deliver dividends for the UK economy over time – we need to get Britain back to building.
CMA market report
The Competition and Markets Authority (CMA) investigation into the state of the housebuilding industry concluded in February after a year of examining the sector. It rightly highlighted the planning system as a problem slowing down delivery of new homes. The CMA findings are a small step forward, especially with an acknowledgement that SMEs are disproportionately affected by the planning system.
However, the report does not provide enough nuance in such a complex market. The report demonstrates a very broad understanding of SME housebuilders – with very little definition given to the range of firms falling within this category, such as micro developers and custom house builders. There are also few international comparisons, which would have helped show that the UK isn’t the norm when it comes to house building, with far too much reliance on new firms to deliver most of our homes. Where they did look at international comparisons, the findings are restrained, with little realisation for the potential of areas such as custom build, which makes up more of the housing market in similar countries around the world.
A General Election looms
We’re now racing towards the General Election, with many political pundits putting their money on the Autumn and Labour pushing for one as soon as possible. But the parties are already in election mode with wedge issues, slogans and key policy areas being set out, with more of this to come over the next few months. Given housing is such a critical issue alongside the urgent need to kickstart the economy, let’s hope all the political parties prioritise the building of much needed homes in their manifestos, and that words turn into reality!