Features - Business

Batten Down the Hatches and Get Britain Building

Mike Leonard, Visiting Professor of Construction and Manufacturing, Birmingham City University and Chief Executive, The Building Alliance

Never in history has it been so important to Get Britain Building using locally produced materials and creating skilled regional employment opportunities.

We are on the brink of our worst ever winter as we face lockdowns, our departure from the European Union, the challenges of climate change, the loss of many businesses and mass unemployment.

The only credible economic vaccine is for the Government to invest in and create the economic conditions to stimulate the construction of new homes, buildings and infrastructure, in addition to beginning the 30-year task to refurbish our existing housing stock.

This will allow us to level up the economy and return to full employment, whist making progress towards a ‘net zero’ built environment.

This contribution through economic input and employment will be critical to our regions in a post-Brexit world. The crisis, caused by Covid-19 and the Brexit-led imperative to become more self-sufficient, highlights the need to attract new entrants to carry out work in the vast range of professions and trades that make up this Great British industry.

Construction is frequently used as a ‘regulator’ for the economy. When things are good and the economy is doing well, construction flourishes. We’ve seen this in the past with houses being built and new retail developments emerging.

However, when there’s an economic crisis, those taking decisions turn off the finance. Subsequently, construction suffers and workers are laid off. In the last major economic crisis in 2008, it’s estimated that at least 400,000 construction workers lost their jobs nationally. The consequence of high rates of unemployment, which varied considerably across English regions, brought misery for families and those directly affected and caused a major mental health crisis.

Twelve years on from the 2008 ‘Global Financial Crisis’ we face an economic crisis that has been caused by the need to respond to Covid-19. The nature of the economic challenge is, though not entirely unprecedented, unlike anything experienced for a century. Moreover, at the time of writing, the precise nature of the free trade agreement, assuming one is agreed, is unknown, and could have a significant impact on the economic prospects of English regions. A further deterioration in the economy as we commit to further regional or national lockdowns will make the task of recovery even more difficult.

There is a strong possibility that by the end of the year national unemployment could reach five million (15% of the UK population).

This is most certainly not what was envisaged in December 2019 when electors voted to support Boris Johnson and his proclamation to “Get Brexit Done”. Crucially, many believed that Brexit would improve their prospects, but with the onset of Covid-19 we are now in uncharted waters, with a real danger of a worsening economic divide and even social unrest.

The construction sector has a number of distinct trading areas including, housing, private and public buildings, infrastructure, repair and maintenance. It has become more apparent during the Covid-19 pandemic that there are many interdependencies, and this includes using a common labour pool.

Together the construction industry and the UK building materials manufacturers are the key to economic recovery and long-term resilience. It is an industry worth over £110 billion and contributes 7% to the UK’s Gross Domestic Product (GDP).

It significantly contributes to the country’s wealth through employing three million people. For every £1 invested in construction the country benefits through a £2.84 return. In a post-Covid-19 economy that copes with Brexit, it is essential we invest in UK building materials manufacturing to further reduce any dependency on the importation of raw materials or finished products.

Prior to the Covid-19 virus, the construction sector was on course for significantly increased growth through investment in major infrastructure projects such as HS2, UK Central, 300,000 new homes per year and climate change-driven retrospective adaptions to 26 million homes. This offers an opportunity to attract young people to consider careers in the many diverse aspects that are integral to construction. With an ageing workforce and the increase in demand it is critical that we do all we can to promote the image of the industry and the myriad of apprenticeships, learning and career opportunities that are available.

With the construction industry facing its biggest skills shortage since 2007, it’s more vital than ever that the industry recruits new talent to its ranks. In fact, the Royal Institution of Chartered Surveyors (RICS) believes that more than 200,000 skilled workers are needed by the mid-2020s. The 2011 census showed that one in five employees in the construction industry were aged over 55. This means that in 2020 a fifth of its workforce are due to retire without enough newcomers to replace them.

At the height of the Covid-19 lockdown Office for National Statistics (ONS) figures showed that a massive 32% of the UK’s 2.4 million construction workers were furloughed. Many are now back at work but for those who will sadly lose their job it is critical that we do not lose this talent from the industry. Creating the demand required to give employers the confidence to get them back into work as swiftly as possible is essential.

This skill shortage and the economic damage caused by Covid-19 must be the catalyst for a systemic change in employment culture with apprenticeships becoming recognised as a highly legitimate route into skilled work and business leadership.

The additional Government funding for FE Colleges is, therefore, very welcome but more funding support for employers to take on apprentices, must surely follow. The recent decision of The Migration Advisory Committee to add trades such as Bricklayers to the “shortage occupation list” is also welcome, as it will provide a bridge to allow the time we need to recruit and educate an indigenous skilled workforce.

The Birmingham City University Covid-19 Economic Recovery Plan “Build Back Better published in May 2020, sets out a clear road map based on the Government recognising the high return on investment (ROI) the construction industry offers.

It is not a coincidence that the solution to a range of economic shocks including the Great Depression, World Wars and more recently the Great Financial Crash, has been to build our way back to growth. Already much has been done to get the industry back to work, but the attention must now switch to demand side stimulus. This is of critical importance to the success of the UK economy and social fabric as we embrace the new ‘normal’, in a post Covid-19 economy, independent of the EU and begin trading more extensively on the world stage. The key need is for a properly trained and skilled workforce, not only to deliver a world class built environment, but also to give people the worthwhile jobs that we need, to create inclusive sustainable communities.

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