This year, the Labour Party’s annual conference played host to 29 fringe events containing the word “housing” in the title. A further seven mentioned the word “infrastructure”. In crowded rooms across the conference zone on Liverpool’s dockside, delegates crammed in to hear the new army of excited “generation rent” MPs outlining grand ambitions to finally solve the housing crisis.
A sole fringe event contained the word “construction”. The early-morning session, organised by the Civil Engineering Contractors Association (CECA) and chaired by Construction News, delved deep into the nitty-gritty of how the industry can help turn the government’s grand plans into reality. The discussion brought together senior industry figures with former Mace executive Mike Reader MP and, for a short visit, the new construction minister Sarah Jones.
Jones, whose portfolio spans a bewildering array of sectors across the Department for Business and Trade and the Department for Energy and Net Zero, arrived with the sort of open-ended pitch that is only open to a new minister. “I’m really keen to hear from you [as to] what [the] challenges are [to get construction moving],” she said. Despite the lack of detailed plans, the minister did give some hints about the government’s direction of travel.
The skilled worker shortage
Jones revealed that she is already in discussions with immigration minister Seema Malhotra about the link between immigration and the construction industry’s labour needs. “I’m talking a lot with Seema Malhotra, looking at how do that interaction between skills and the Migration Advisory Council,” she said. Given the sensitivity of immigration as a political issue, she chose her words carefully. However, it was clear that the government is mulling how changes to immigration rules might help meet the sector’s demands.
The minister was quick to point out that immigration alone is not a silver bullet to the sector’s skills crisis. She cited green skills – also in her remit – as an area that needs to be linked to filling construction’s labour demands. “I’m responsible for something called the Office of Green Energy jobs, which is looking at the jobs we’ll need in the energy space, and it’s quite often the same people,” Jones said. “So we need to work out who we need to reskill and who we need to skill up from scratch.”
UK industrial strategy
Jones also suggested that the promised UK industrial strategy is set to provide a boon for construction. The aim of the strategy is to give investors certainty and stability. “I’m hoping that the industrial strategy that we’re working really hard on will provide the sort of ‘backbone’ to what the country is doing,” she said. All indications are that the strategy will guide investment decisions, including those on housing and infrastructure. The aspiration is to attract private sector cash and crowd it into key areas like construction.
Late payment
Jones also touched on the thorny issue of late payment reform, a long-standing industry grievance, providing a glimpse into Labour’s potential future policies. “There are obviously issues around things like late payment that we need to fix which is already in our manifesto.”
Aside from the big-picture ambition, much of Jones’ appearance relied on listening rather than leading. She left the industry figures with a clear message: “Tell me what the challenges are and what you think the solutions are.”
Before her departure to another event, Brian Berry, chief executive of the Federation of Master Builders (FMB), took the minister up on her offer by pleading for urgent reform of the housebuilding market. “We want to help deliver [the housebuilding] target but you need to open up the housing market to the SME housebuilders,” Berry said, pointing out that SME builders had been squeezed to under 10 per cent of the housing market. He emphasised the role SME builders play in supporting regional economies, noting that “they train the local people they take on their apprenticeships, and you keep the money in the local area”. After promising to look at the issue, the minister was whisked off to another meeting.
Planning
The ensuing discussion saw the remaining panelists highlight the key barriers that the government needs to overcome to meet its growth ambitions. Reader, before being elected as an MP in July, was an executive at Mace. He pointed to investment in the planning system as one of the most pressing issues. “We need to start looking at planning departments and how we can get them resourced properly,” Reader said, highlighting the disconnect between housing needs and local authorities’ capacity to approve new developments.
Berry agreed, saying: “It comes down to resourcing of planning departments. [The new government has] put 300 new planning officers in, which is great. It sounds good but it’s actually about one per local authority.,”
Materials
The conversation shifted to materials and supply chain concerns, with John Newcombe, chief executive of the Builders Merchants Federation, painting a stark picture. “I’ve been chief executive for 12 years and I would say it’s been the worst 18 months in the industry since 2008,” he said, referring to a decline in brick production and overall demand. Newcombe stressed the need for a boost in consumer confidence and reminded the audience that without construction, broader economic goals would fail. “Because [construction employs] more than 3 million people with 9 per cent of the GDP, it is one of the key drivers of the economy.”
Infrastructure
The future of UK infrastructure then took centre stage. Marie-Claude Hemming, director of operations at CECA, raised the issue of long-term planning. “From our point of view, the visibility of pipeline workload is really, really important,” she said. Hemming stressed that without longer-term certainty, businesses would be hesitant to invest in the skills and resources needed to deliver large-scale infrastructure projects.
Delivering a long-term approach would require cross-party agreement on infrastructure policy to prevent projects from stalling due to political changes, she said.“We need certainty beyond electoral cycles. Quite frankly, the National Infrastructure Commission was supposed to do, but it never had a statutory footing, which is kind of where things fell slightly apart.”
Recruitment and retention
Discussion of the skills shortage returned to dominate the latter half of the session, just as it is likely to dominate the government’s thinking on its delivery plans. From Berry to Newcombe, the message was clear – without a skilled workforce, the UK’s construction ambitions would collapse.
Kate Jennings, chief executive of the Association for Consultancy and Engineering, said that the challenge wasn’t just in attracting young people but in keeping them in the industry after their training. “Naturally quite a lot of those people say, ‘I’d like to work in Australia or America’,” she lamented. The problem is especially acute in consulting, which has a global marketplace, she added.
Newcombe, however, saw an opportunity in the challenge, highlighting the potential for career growth within the sector. “This industry is one of the few I know where you literally need no qualifications to come into it. We have chief execs of major PLCs who started as Saturday boys in the builders merchant yard and are now running £1bn-turnover businesses,” he said. Newcombe emphasised that it was up to both the industry and the government to market construction as a rewarding career path.
Reader came at the skills problem from a different angle. “Do we need more people or do we need industry to find ways to remove people from the process?” he asked, suggesting that modern methods of construction, such as offsite manufacturing, could help alleviate the strain on labour demand. Jennings agreed that innovation is vital, but cautioned that it would need to go hand-in-hand with reskilling the current workforce.
Early days
The stakes are high for the new government, with elevated housing and infrastructure joining an existing need for decarbonisation and maintenance of ageing assets. So early into the new administration’s life, it is not surprising that Jones had little detail on how the government is planning to tackle the challenge.
Instead, she made it clear that the industry itself needs to look at how it can step up – not least to spread the message that development is a force for good. “For me, construction is about the real impact of the things that we want to do,” Jones said. “So, telling a story of the growth that we want to see sits with people who work in construction. Everybody knows people who work in construction, everybody uses people who work in construction.”
How this army of evangelists can be boosted with new recruits to deliver the work required remains, for now at least, an open question.
