The new Labour Government passed the milestone of its first 100 days last weekend. So far there have been positive announcements on house building targets, planning reforms and establishing a new skills body in England. However there remain key challenges that will need to be come to make these goals a reality. The FMB has taken a look at the start Sir Keir Starmer’s Government have made, and what micro, small and medium-sized builders will need to see in the coming weeks and months – starting with the Budget on 30th October.
A positive start for housing, but a long road ahead
The Government’s commitment to “get Britain building again” is refreshing. Plans to reform the cumbersome planning system and the goal of delivering 1.5 million new homes are bold moves, with a lot of moving parts. However, it’s not just about numbers; quality matters too. We need a diverse range of homes, constructed by both large developers and local SMEs. The Housing Ministers comments last month, backing the FMB’s long-standing calls to diversify the housing market and reduce reliance on a few big builders is a promising sign – but we need to see action to make this happen. We also need to see a large intake of new builders to build these new homes.
Retrofitting: Where’s the plan?
While there’s a clear commitment to new builds, the strategy for upgrading five million existing homes, as set out in the Labour Party Manifesto, is still vague. Retrofitting is a key driver for growth and we are urging the government to put forward a concrete plan for retrofitting. This initiative could create work for builders who are eager to adopt new green skills to diversify their offerings to tap into new markets.
The skills crisis needs urgent action
The construction industry is facing a significant skills crisis, with a pressing need for 250,000 new workers. The proposals for Skills England are promising, however details announced so far remain light, and it will take time to see results. Investment in vocational training and apprenticeships will be crucial in ensuring builders can find the skilled workers they need. There are also concerns over the Employment Rights Bill which places an unfair burden on small builders, who lack the administrative capacity to support changes to HR procedures
An industrial strategy arrives, but no place for builders
In mid-October the Business Secretary launched the Government’s new Industrial Strategy: 'Invest 2035: the UK’s modern industrial strategy', however it was deeply concerning that the new “long-term” does not include construction as one of its eight 'growth driving sectors’. Construction sits alongside services and manufacturing as a key pillar of economic growth in this country, and it is vital that Ministers recognise the significance of this.
What we want from the Autumn Budget
As we look toward the Autumn Budget on 30th October, SME builders across the country need essential support if the Government is serious about delivering on the ambitious plans. We need to see the Chancellor use the Budget to provide greater financial support for local authorities to boost the capacity of planning teams, alongside a review of the financial burdens placed on smaller house builders by the planning system which hinder housing delivery.
To help alleviate the skills crisis, we need to see additional funding to help small building companies with the administrative burdens of employing and training staff, and more clarity on the financial incentives improve the energy efficiency of five million homes.
While we will need to wait to see what is announced later this month, business will be looking at speculation around potential tax rises, such as Employers National Insurance contributions. As firms struggle to hire new staff, creating additional barriers to taking on employees is of particular concern, such a hike in taxes will likely stop companies hiring new staff and stifle pay increases.
What’s ahead?
The Labour government’s first steps have been positive towards construction, but the detail and delivery plan has been missing. The Autumn Budget is a crucial moment for the government to show its commitment to supporting the construction sector, but the signs show it will likely be a cost cutting budget. Let’s hope for some nuggets in the budget that empower builders to thrive!
