Will Post-Brexit UK construction lose its European backbone?
If 2018 saw yo-yoing fortunes for UK construction, 2019 could see it hurtling towards an unsolvable skills shortage, says Blane Perrotton is managing director of the national property consultancy and surveyors Naismiths.
Across the UK, European workers make up a tenth of the construction workforce. A third of London’s builders are EU nationals, and retaining them after Brexit will be a huge challenge.
Whatever the nature of the final Brexit deal, simple economics could play a decisive role. Average wages in Poland are now rising twice as fast as they are in Britain, tempting many of the skilled Poles on which parts of UK construction relies to return home.
For now the feared ‘Brexodus’ of European workers remains steady rather than a stampede. But if it speeds up, the resulting gaps in the labour market won’t be easy to plug.
Britain’s homegrown construction workforce isn’t getting any younger. As the average age of British builders creeps up, many experienced tradespeople will retire and take their specialist knowledge with them.
To make matters worse, too few young Britons aspire to a job in construction. Ours is a sector that can offer careers with big rewards, both professional and financial, yet successive governments have done little to encourage young people to consider the industry seriously.
Yet with university students typically graduating with £50,000 of debt, more school leavers are thinking twice about whether getting a degree is right for them. This presents an opportunity for the construction industry, and we must do more to show bright young people that there is more to the built environment than hard hats and hi-vis jackets.
In a worst-case Brexit scenario, where Britain ends up cut off from the foreign labour market that makes up its building backbone, we will face the mammoth task of re-enfranchising a generation of young people into construction.
Such a task won’t be easy and would require both the state and private sector to work together to restore construction’s image and make it attractive again. At the very least we are likely to see the introduction of new schemes designed to get more British youngsters into the industry.
These could take the form of a greater emphasis on college courses, apprenticeships and additional Government funding for further education in the field. Whatever the strategy, rapidly increasing the number of homegrown construction workers, specialists and project monitors will be imperative to prop up British construction.
Pre-Brexit jitters can be felt in all corners of UK industry, but it is in construction where these could escalate into damaging tremors. Valuers, for example, are nervous about setting prices in stone because of the impact Brexit might have on projects after we leave the EU.
No-one has a crystal ball when dealing with such unprecedented upheaval, making it especially difficult – if not impossible – to predict a building’s value two years from now. That uncertainty has already trickled down to site level as developers see their margins shaved.
For now, we are still being kept busy and the industry as a whole is ticking over, which is good news for addressing Britain’s housing crisis. But the question remains ‘who will deliver’? With the big beast contractors taking stock and waiting until Brexit blows over, we might see a surge in the number of SMEs tasked with building more of Britain’s homes of tomorrow.
The smaller developers don’t have the cash in the bank to weather the Brexit storm, so they simply cannot afford to stop developing. Smaller lenders, too, will need to keep lending if they are to stay afloat. So, with the bigger players willingly loosening their hold on the market, a more level playing field could open up for the SMEs to get stuck into; and it could very well be they who carry us through the housing crisis in years to come.
It is no secret that many councils are increasingly cash-strapped. The effect is far-reaching for communities but, crucially, it can also stop them growing. As shrunken planning departments in town halls up and down the country struggle to plough through their workload, desperately needed housing developments are being delayed needlessly.
The Government might tout the ‘end of austerity’ being in sight, but you can bet your bottom dollar that councils won’t be seeing a sudden boost to their budgets any time soon. Without a sudden influx of local planners, the only conceivable way to ensure new housing is delivered as quickly as possible is by cutting red tape for the planning officers.
If the Government is serious about tackling the housing crisis while at the same time dealing with any fallout from Brexit, it should relax planning rules to let developers do their job and build the Britain of tomorrow.
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