Features - Business

Brexit: Its effect on the construction industry

With a potential no deal Brexit just under a month away, many in the construction industry are struggling to come to terms with the potential outcomes of the UK crashing out of the European Community. We speak to Kunle Barker, property expert, journalist and TV presenter about the challenges and opportunities presented by a hard or soft Brexit.

A potential no deal Brexit is just under a month away, Kunle Barker, property expert & journalist discusses the challenges and opportunities.

Kunle Barker

The obvious and perhaps most talked about problem is how will the UK construction industry maintain its level of output without access to Europe’s construction workforce? Part of the issue is that the scale of the problem is not truly understood. Estimates put the number of non UK citizen EU Workers in the construction industry at around 750,000 but this number could be as high as two million people – so how will we continue to build and deliver projects without easy and fluid access to workers? The answer is a resounding, “We can’t,” which in my opinion makes the solution rather straightforward.

Much like passporting in the financial industry the UK government will be forced to allow EU construction workers to carry on working within the UK under a special work visa, or perhaps providing the industry with some sort of protected status allowing workers to remain in the UK as long as they are working in the construction industry. In April 2019, the Japanese government introduced a new visa system which allowed up to 500,000 foreign workers to travel to Japan as long as they had the skills necessary to work in an industry listed as ‘in need of additional labour’. A similar system could easily be introduced in the UK solving the short term labour problems.

The news is not all bad for the construction industry as there are definite opportunities which will arise due to our country’s departure from the European Union. The construction industry is one of the most socio-economic mobile industries in the UK, with many of the top executives’ positions in many firms filled by people who worked their way up the company structure. As an industry there are fewer barriers to entry and it has a great reputation for training its staff and presenting them with opportunities to flourish within the business regardless of their initial education level. This culture of promoting from within the existing corporate structure has made construction (in my opinion) one of the most inclusive industries in the world.

With this in mind, the UK Government and construction industry bodies should use Brexit as an opportunity to put in place long term training programs aimed at encouraging more people to enter the industry. Schemes aimed at encouraging young people, women, and people from other sectors to enter the industry and re-training should be a priority upon our exit from the European Union.

With current UK unemployment figures at just under four per cent the UK has an abundant supply of labour to plug this potential post Brexit labour gap. As and added bonus, reducing unemployment has a huge positive benefit for the UK and our economic state. Construction contains almost every profession, from lawyers to marketers and of course trades. There are such a range of career opportunities in the industry, Brexit should be used as a mechanism to force UK construction companies to invest heavily in recruiting UK or local staff. UK construction companies should also improve training standards.

See below examples below of the types of training initiatives I have run which could be a template for long term nation-wide training initiatives run by our top construction companies:

School Leavers Training Course Kunle Barker & llustrious Homes have teamed up with Camden Council to put together training course aim at School Leavers who interested in a career within the construction industry

Women in Construction Training As part of their continued commitment to providing real training opportunities for local residents, Kunle Barker & Illustrious Homes runs several annual training events

National Apprenticeship Week Video documenting a joint project by Kunle Barker & Illustrious Homes, Building Lives, Lakehouse to renovate a local community centre in Camden using local Apprentices

For larger contracts leaving the EU may mean that it is no longer mandatory for procurement regulated by the Public Sector Procurement Directive to be published in the Official Journal of the European Union (OJEU). On the face of it this may not seem like much of a benefit however as a result of this EU regulation many local authorities have resorted to placing tendered packages of work into larger contracts called Frameworks. Due to the size of many of these frameworks most SME companies are excluded from tendering directly for work. Instead the larger tier 1 operators tend to win these works and then subcontract these works to the SME sector of the industry. Now this not a cost effective or efficient way to procure contracts and does not represent the best value for money for the UK taxpayer. Leaving the European Union may give local authorities more scope to work directly with its local supply chain offering better value for money, improved level of service and also having a direct benefit to the local community.

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