Contractors must step up to the challenge of building housing across the country, communities secretary Sajid Javid has told Construction News.
Speaking at the Conservative Party conference, Mr Javid said contractors had an “important [and] responsible role” to play in helping the government meet its target of building one million homes by 2020.
Mr Javid this week announced a £5bn funding package to speed up the delivery of homes in the UK, which has been split up into two pots: a £3bn Home Builders Fund; and £2bn for an Accelerated Construction programme.
Mr Javid said: “We want to get more houses built. There’s been great progress since 2010 but we need to do a lot more. More houses means good news for the construction industry and they’ve got an important [and] responsible role to play.”
He added: “There will also be a white paper later this year. This is good news for construction and we want to see the industry really stepping up to help all communities get more homes.”
Large UK contractors including Kier and Wates are increasing their investment in housing.
Wates launched a residential development arm this week, while both Kier and Wates launched northern joint ventures with housing associations to deliver homes last month.
Mr Javid referred specifically to contractors in his party conference speech, saying: “We will take government-owned land and partner with contractors and investors to speed up housebuilding,” he said.
The government is now expected to publish a white paper next month, which will look at further measures to tackle the country’s housing crisis.
The Home Builders Fund will bring together several Homes and Communities Agency funding streams to help small-scale developers overcome issues around access to finance.
Construction News understands the government had intended to launch the policy in the summer but delayed it after the shock EU referendum result.
The fund is expected to help SME housebuilders create an extra 25,500 homes before 2020 with a long-term goal of building 225,000 homes.
Of the £3bn, two-thirds will be for infrastructure to help unlock housing schemes.
Small builders, custom builders and “innovators” will be able to access the remaining £1bn in short-term loans.
But SME developer Pocket Living’s chief executive Marc Vlessing said that, while positive, the funding announcements “wholly lacked detail”.
He said the government must have a thorough understanding of how the fund would work in practice in order for it to be a success, although he added that housing minister Gavin Barwell was well placed to do this.
Mr Barwell was named housing and planning minister in July, following prime minister Theresa May’s reshuffle of senior government posts, replacing Brandon Lewis.
He told CN: “Larger housebuilders are very honest with me that they want to see some changes to the planning system and that if I make them they will build more homes. But they are very honest they won’t be able to build the overall number I need.
“I don’t want to damage them, I want to encourage them [by encouraging more players into the market including SME housebuilders and contractors].”
His department’s £2bn Accelerated Construction Fund is aimed at speeding the delivery of new homes on publicly owned brownfield land and encouraging the sector to use modern methods of construction.
What government heavyweights said on construction
Philip Hammond, chancellor “Today I recommit to putting the National Infrastructure Commission at the very heart of our plans to renew and expand Britain’s infrastructure… making sure that it is long-term economics, not short-term politics, that drives Britain’s vital infrastructure investment.”
Sajid Javid, communities secretary “We will take government-owned land and partner with contractors and investors to speed up housebuilding. We will create new supply chains using offsite construction. And we will encourage new models of building to make houses that people want, more cheaply and at pace.”
Chris Grayling, transport secretary “How do we create more space on our railways? We build a new railway that links our major cities – so we’ve got more space for freight trains and commuter trains on our other busiest lines. That is why we need to press ahead with HS2. Everyone will benefit from this new project.”
Mr Barwell said the government wants to share risk with contractors and try to bring new players into the market.
However, questions continued to be raised over the industry’s ability to deliver the housing required as capacity shrinks.
Cast CEO Mark Farmer said: “Site availability and funding remain critical issues for the housebuilding industry, especially for SME developers, but a far greater challenge lies in the construction industry’s capacity – the ability to actually build the homes required.”
Meanwhile skills minister Robert Halfon told the Conservative Party conference that the UK was “nowhere near the tipping point of where it needed to be” on apprenticeships.
Mr Halfon is leading on the government’s pledge to deliver three million apprenticeship starts by 2020 and the introduction of the apprenticeship levy, which is aiming to encourage more people to start a career in construction.
When asked by Construction News for further detail on how the government levy would work alongside the existing CITB levy, Mr Halfon said he was “consulting with the industry” and declined to answer any further questions.
Chancellor Philip Hammond reaffirmed the government’s commitment to the Northern Powerhouse and National Infrastructure Commission in his speech to the conference.
Former civil service head and ex-permanent secretary at the Department for Communities and Local Government Sir Bob Kerslake praised former chancellor George Osborne for his work on pushing the Northern Powerhouse agenda.
But he described the recent departure of infrastructure minister Jim O’Neill from government as “a loss” to the Northern Powerhouse.
Lord O’Neill’s resignation in September sparked rumours of a falling out with senior government figures over the commitment to the northern agenda.
Lord Kerslake told Construction News: “Jim was a very inspired appointment into government… and is very passionate about the whole Northern Powerhouse ambition so he is a loss and we shouldn’t deny that.
“It’s important to carry on using skills and strength that Jim has to bring to this agenda so I really hope that his stepping down in government doesn’t mean he’s no longer going to be active.”