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EU referendum's Brexit vote offers opportunity to push SME housebuilding up the agenda

Things have certainly moved on a lot since the article I wrote last month.

Post-referendum Britain is proving to be an interesting and dynamic landscape, with a change of prime minister, the restructuring or scrapping of several departments and the replacement of dozens of ministers – all on top of the still-developing fallout from the vote itself.

In short, our industry has to process a lot of information with high degrees of uncertainty.

If the findings of June’s Markit / CIPS UK Construction PMI index are anything to go by, we are already seeing evidence of what this uncertainty is doing to the sector.

Talking a good game

With fresh beginnings come fresh opportunities, however. And much of the early rhetoric from the new government has been encouraging.

Theresa May’s stated aim of creating a “proper industrial strategy” powered by serious investment in the country’s infrastructure will be reassuring news for the industry.

Investment in construction has a significant economic multiplier effect which can smooth the pain of any prospective downturn. With the country in dire need of new housing and infrastructure, there is a strong rationale behind spending on these areas.

The new PM has so far talked a good game on housebuilding, making the right noises about a ‘housing deficit’.

“This country’s housing crisis is no less severe than it was pre-referendum and tackling it must remain a priority”

New housing minister Gavin Barwell, taking over from the excellent Brandon Lewis, will need to demonstrate both continuity and a willingness to be bold, if Mrs May’s government is going to succeed in plugging this deficit. This country’s housing crisis is no less severe than it was pre-referendum and tackling it must remain a priority.

SMEs will need to be at the centre of the new PM’s delivery plan.

Given Mrs May’s emphasis on restoring strength to local communities, smaller local building firms should be important partners in building the homes she has rightly identified as being crucial to the country’s future.

Money spent with construction SMEs overwhelmingly stays within the local community and creates skilled local jobs.

Radical measures

I’ve been encouraged by the previous government’s desire to revive the SME housebuilding sector and hope that support for smaller firms continues. Nevertheless, now offers the chance for even more radical solutions.

“Although Brexit may seem like a choppy sea for our industry to navigate, it may also turn out to offer some fantastic opportunities”

Though it was drowned out among the accompanying noise of Mrs May’s move into Number 10, a recent House of Lords economic affairs committee report made a series of interesting recommendations that the new housing minister would do well to look at.

Advocating a target of 300,000 new homes a year, the committee called for government to lift local authority borrowing caps to fund new developments – a position the FMB has long supported – and for SMEs to be prioritised during the release of public sector land for housing to increase capacity and competition in the sector.

Although Brexit may seem like a choppy sea for our industry to navigate, it may also turn out to offer some fantastic opportunities.

It’s certainly going to be an exciting time for construction – it’s all to play for.

Brian Berry is chief executive of the Federation of Master Builders

Readers' comments (1)

  • Bola Abisogun

    As Chair of the Procurement Group at the FMB, I applaud the sentiment displayed by Brian Berry, Chief Exec, who has led and continues to lead the FMB with commendable vigour and tenacity.

    Whilst the ‘reality’ for many firms [SME’s and micro] remains largely unknown, I concur that the BREXIT decision is indeed an opportunity ‘to change the rules & processes’ as we know them. And yes, the recent House of Lords economic affairs committee report has proffered a series of interesting recommendations that the new housing minister would do well to look at. For example and in pursuit of better value for money, ‘Social Value’ can now be placed ‘squarely’ at the core of all public sector procurement with a view to ensuring that local economic opportunity is much more transparent in pursuit of more sustainable local economies. The ongoing skills challenge(s) requiring development of both current and future generations, will also command greater emphasis towards the development of a truly diverse talent pool, such activity to be delivered at a local level. If the sector continues to fail in this regard, the industry will remain hugely unbalanced and incapable of achieving its true potential.

    Exciting times ahead indeed……….!!

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