12 CIH TOTAL HOUSING CONFERENCE
proposed Tier 2 system for recruiting migrant workers from outside the European Economic Area is “very time-consuming and overly bureaucratic,” especially for SME housebuilders.
Brexit uncertainty continues to constrain UK construction output
The UK’s “extreme reliance” on EU workers and materials is continuing to hinder construction output, according to Barry Mortimer, London director of the Federation of Master Builders (FMB). Mortimer expressed his concerns to delegates at the Chartered Institute of Housing (CIH)’s Total Housing conference, held in Brighton on 6 March. During his talk he discussed the effect Brexit has already had on the industry, highlighting the “sharp decline in EU migration” that the Office for National Statistics (ONS)’ recent migration figures had revealed. He explained how “extremely reliant” the UK is on EU labour, particularly in housebuilding, where he said 49 per cent of labour comes from the EU. Mortimer also pointed out that it is “often overlooked” how many “excellent companies” in the sector are owned and run by eastern Europeans.
Mortimer blamed the exchange rate for contributing to the shortage of EU construction workers, meaning that wages are now not worth as much as they were to workers from overseas. He also said the general feeling of being “unwelcome” is also to blame for the decline in worker numbers from the EU. “We’re pulling up the drawbridge on allowing people into the country,” he told delegates at Total Housing.
He went onto explain that while it is possible to recruit workers from elsewhere, the construction industry has an “image problem” that’s making it largely unappealing to young people, in particular women. He added that the
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Mortimer also made reference to the latest UK construction output figures, which showed a decline in activity for the first time in 11 months. Anecdotal evidence from the survey, he said, points to Brexit, and this is primarily “people delaying decisions to build.” Mortimer pointed out that while housebuilding figures were as a whole “not too bad,” he commented that they are being “propped up” by building in the north east, while London and the south east are lagging behind.
He went on to explain that the one area where construction activity is increasing is warehousing, which he credited to the stockpiling of materials in preparation for Brexit. He said that of the 25 per cent of materials that come from overseas, 62 per cent are imported from the EU. “We’re seeing very sudden and sharp hikes in material prices,” he said. In response, he urged people to “have sympathy” with builders when they’re quoting for projects as, due to skills short- ages, rising wages and increases in material costs, “it’s a really volatile market.” Despite the relatively negative outlook
overall, Mortimer remains positive that things will improve in time. “On skills and immigration, the Government will, if it wants to hit its housing targets, end up having to be pragmatic,” he concluded.
More work needed in social housing sector to drive offsite methods
There are a number of barriers holding housing associations back from utilising modern methods of construction (MMC), a leading construction consultant recently told an audience of social housing professionals. John Milner, partner at Baily Garner told
an audience at the Chartered Institute of Housing (CIH) Total Housing conference in Brighton that prefab still had a “tainted image.” Despite the many established benefits such as time savings, he said a misunderstanding of the sector was stopping housing associations from getting more involved. “Housing associations by their very nature are quite risk averse,”
Milner told the audience. However the biggest barrier, he said, was
system selection. He blamed “poor products” and “too many choices” for putting housing associations off, making it too difficult to know which methods or manufacturers to pick. Milner told Total Housing delegates that
housing associations need to work in collab- oration on designing “off-the-shelf” products that suit everyone’s needs, and which there- fore will be more cost-effective than bespoke designs. He spoke on a platform with Trowers &
Hamlins partner Katherine Saunders, who also highlighted cost as a problem for housing associations. “The private residen- tial sector has more flexibility and less constraints over funding,” she said. Saunders added that the Government needs to do more to help the public residential sector invest in MMC. “We want to see MHCLG and Homes England give more backing,” she told delegates. Both Milner and Saunders believed that
current methods of procurement “are not fit for purpose,” Milner said: “The standard model that most use to deliver new housing is not capable of delivering MMC.” Saunders added that the industry needs to “redefine” the roles of main contractors. “The tradi- tional way of getting quotes in is not really where you need to be going,” she said. Saunders stressed the importance of better collaboration between manufacturers and main contractors, including engaging with manufacturers much earlier on in the process. Milner said the industry needs a “large player” with a branded product that’s “trusted” and can be “digitally configured, designed and dropped in.” He concluded: “If the industry does not pull its socks up on this, there is going to be some serious market disruption.”
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