James Wates: don’t delay recovery
CITB-ConstructionSkills chairman and CIOB past president James Wates on why the industry needs to get behind CSkills’ new Construction4Growth Campaign launched this week
The construction industry holds the key to the immediate future of the UK economy and we can be trusted to help pull the economy back into growth. When the latest “growth” figures were published in July, it was a 3.9% contraction in our sector that dragged the economy into a double dip recession. Yet construction has so many practical levers at its disposal that it should be a vital part of this country’s growth strategy.
The industry welcomes the announcements made recently by the prime minister about planning, houses and infrastructure. The scale of thinking is to be applauded: unlocking potential across the housing market; stimulating infrastructure projects and getting to grips with planning issues at local level – these measures are all serious and well-intentioned. They must be actioned.
Last week’s PMI figures illustrated the depth of the crisis of confidence in the industry, as new orders fell at their fastest rate since 2009. What’s more, there are more than 160,000 construction workers currently on Jobseekers’ Allowance. This means more builders, maintenance workers, bricklayers, fitters and steeplejacks are out of work in the country than there are soldiers in the British Army. This is a waste of skills and talent and a wasted resource for economic regeneration.
Welfare payments
It is also extremely expensive. Unemployed construction workers are costing taxpayers more than half a billion pounds a year in basic welfare payments alone, a number compounded by a loss of over £2bn a year in tax receipts. No one can look at these figures and feel comfortable. The National Infrastructure Plan, including plans for new roads and the continued backing for HS2 and Crossrail is welcome, as are the changes to our planning laws. But proposals do not deliver growth. When I took construction CEOs to meet MPs last month, their message was clear: policy decisions taken today are what will lead to growth tomorrow.
A good starting point would be to cut procurement red tape on all national and local government projects. In Britain, it takes around four years to go through the procurement process before constructing a hospital; in Canada it takes just one. Money currently wasted on bureaucracy can be spent on building. Funding should be fast-tracked into housing projects, because we know that house-building creates jobs immediately (unlike larger-scale projects, which take longer to get off the ground). The repair and maintenance of our existing housing stock is also a quick way of generating wealth, as well as raising the standard (and value) of homes. Lowering the rate of VAT on repair and renewals would stimulate demand, pumping millions of pounds into small and medium sized businesses, not to mention into Treasury coffers.
Jobs and growth
The industry wants to work with government to sort out the structures and regulations around construction in this country. We want to evidence to government what more we can be doing to promote new jobs and real growth.
This is one of the most serious and sustained recessions in construction for more than 100 years – and it won’t end until Britain returns to building, and construction returns to growth. If we reverse the decline in construction, growth will quickly follow. The Olympics demonstrated that when the UK construction industry and government get the relationship right, the results are world-class. We have the workforce, the skills and the ideas to build our way out of this recession. If we are to return to growth, we need a new concordat between the government and our industry and some radical thinking from both parties. The construction sector stands ready to play its part, so let’s not delay a return to growth a moment longer.
More than 900 industry supporters of the campaign and six federations including FMB, NFB, CECA, NSCC, HBF and NSCC are now campaign partners. To sign up and pledge your support go to http://www.construction4growth.co.uk/
