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Construction & Property Brexit

Constructing Brexit

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PBLINK Editor 26, March 2018

The period of uncertainty which has followed since the UK voted to leave the EU has impacted the performance of the UK’s construction sector. Although house building remains strong, the industry continues to experience intermittent periods of contraction and growth.

The weakening of the pound against the euro continues to increase material costs and many constructors are finding it harder to predict business growth. However, Brexit can also bring opportunities if decision-makers are willing to embrace them.

The public procurement process in the UK is one area in need of reform. OJEU tendering has stifled the innovative procurement that public bodies once delivered. Many principles of the OJEU will remain, but the Government needs to usher in a cultural change away from OJEU being the fall back practice, as well as making sure stringent EU directive language does not continue to hamper investment such as the supply of new housing association homes.

The Green Deal is another example of how the specific language of EU law stifled industry investment and these opportunities must be embraced once the UK leaves the EU. With the UK still among the top five most innovative countries in the world, construction has a vital role to play in ensuring high-tech industries such as renewables are given the chance to thrive.

The marketplace is where the UK must concentrate. Many NFB members are already beginning to source their materials from outside the EU, while the Government has begun investing in British kilns and offsite manufacturing. With the top five exported products also being the top five imported products, the Government needs to challenge itself to understand how the import market works. For example, 92% of softwood timber is imported from the EU.

EU directives on energy efficiency or habitats may also require some policy flexibility. The Government should investigate whether EU policy has delivered optimal outcomes for the UK or whether they are able to unlock new opportunities by supporting more appropriate regulation.

Getting procurement right, decreasing the cost of materials, and comprehending EU directives are huge challenges.

Nevertheless, the industry may not rely on the workforce to sustain any solid period of growth. In London, more than half of the construction industry’s workforce comes from abroad. The consequence of non-UK construction staff leaving London will see companies across Britain lose staff to higher paying London employees, with some London projects grinding to a halt.

The Government must make sure that existing EU nationals are able to remain in the UK. It must also provide a high-quality visa application process for industries needing foreign skilled labour. For construction, this will be a vital early step.

It is also crucial to not only make construction a more appealing career choice, but enable the industry to take on more home-grown apprentices.  For SMEs, who train and retain two-thirds of construction apprentices, this would be a very welcome step. Working across the country, SMEs are most able to tackle the skills crisis and strengthen our regional economy where it matters.

To successfully navigate Brexit, collaboration between industry and the Government is paramount. The Government needs to make sure that, once the final deal with the EU has been struck, it will actively engage every opportunity and with every sector to deliver a stable transition period and environment for growth.

Author: Rico Wojtulewicz, National Federation of Builders

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