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'Cut VAT on home improvements to boost economy', says FMB

THE Federation of Master Builders (FMB) is calling for the Government to cut the VAT on home improvement work following official data from the ONS published today.

While there has been a rise in output over the first quarter of the year, construction output decreased month-on-month by 1.9% and the repair and maintenance series fell to its lowest level since December 2018, experiencing a fall of 3.1% compared to the previous month. 

Brian Berry, Chief Executive of the Federation of Master Builders, said: “It’s not at all surprising that construction output has dropped at the end of the first quarter of this year, given the unprecedented political uncertainty we’ve been facing. To get us through these turbulent times, the Government must be bold in its thinking when it comes to supporting the economy bucking any downward turn. One course of action would be to cut VAT on work in the home improvement and private domestic sectors from 20% to 5%”

“A cut in VAT would help stimulate demand from homeowners resulting in more work for the thousands of small to medium-sized construction companies which would help support local economies and increase training opportunities. This is all the more important given that the FMB’s own State of Trade Survey for Q1 2019 saw the first dip in workloads for small builders in six years."

Berry concluded: “Cutting VAT would also be an important step to help encourage more retrofits of our existing buildings to make them more energy efficient and deliver a cut in carbon emissions.”

www.fmb.org.uk

Planning must be properly funded if permitted development is scrapped, says FMB

IF a future Labour Government was to scrap commercial to residential permitted development it must also come forward with proposals to properly resource our chronically underfunded planning system, according to the Federation of Master Builders (FMB).

Responding to an announcement by the Shadow Secretary of State for Housing, John Healey MP, Brian Berry, Chief Executive of the FMB, said: “If Labour is going to put more strain on the planning system by scrapping commercial to residential permitted development, it must also think carefully about how planning will be resourced. Small and medium-sized house builders cite the planning process as the third greatest barrier to them increasing their delivery of new homes. Planning departments are chronically underfunded and we can’t ask them to do more without providing them with additional funding.”

Berry continued: “We mustn't make permitted development synonymous with poor quality as it can have create really positive outcomes. In recent years, permitted development rules governing domestic properties have been relaxed, which has made it easier for home owners to extend their homes without having to go through the rigmarole of a full planning application. These permissions have proved popular among builders and home owners alike. The reason being is that they give even more people the opportunity to add a bit more space – eight metres for a detached house and six metres for an attached house – to their home. In short, let’s not damn all permitted development. It would also be good to see proposals from Labour regarding how we can more easily convert empty spaces above shops. There are 300,000 to 400,000 new homes which could be created by making use of empty spaces above shops on our high streets. Surely we make use of permitted development regulations in a way that utilises these spaces without bringing to market tiny uninhabitable homes. This would have the added benefit of revitalising our struggling high streets across the country.”

Berry concluded: “We do completely accept the point that we must prevent ‘rabbit hutch’ homes without windows being developed under permitted development. Tiny uninhabitable homes are not something the FMB would ever support. Small and medium-sized construction firms compete on quality and that’s at the heart of everything they do. We support Labour’s drive to reform permitted development to prevent low quality conversions and will work with them to achieve this.”

Immigration White Paper shows government is not listening, says FMB

THE Immigration White Paper shows the Government is not listening to the business community as it sets out a post-Brexit immigration system that would devastate the construction industry, according to the Federation of Master Builders (FMB).

Commenting on the Immigration White Paper, Brian Berry, Chief Executive of the FMB, said: “The Government seems hell-bent on ignoring the business community when it comes to its immigration policy, as demonstrated by this disastrous White Paper.

"Despite more than two years of constructive engagement, what has been proposed by Ministers takes on none of our feedback.

"If the Government wants to jeopardise the UK economy for the sake of meeting an arbitrary immigration target, it’s going the right way about it.

“What’s particularly worrying is the government’s obsession with salary thresholds for migrant workers entering the UK.

"The figure of £30,000 was floated in the Migration Advisory Committee report and was met by fierce opposition from almost all sectors.

"It makes no sense to draw meaningless lines in the sand when we should base our immigration policy on what will make our economy strong and productive.

Brian Berry, Chief Executive of the FMB

(ABOVE) Brian Berry, Chief Executive of the FMB

"The White Paper also states categorically that it will make no allowances for so-called low skilled workers.

"This is wrong on two levels – firstly, the definition of 'low skilled' will cover most construction tradespeople and secondly, genuinely low skilled workers, such as labourers, are essential to the safe and smooth running of any construction site.

"12-month work visas for occupations in short supply during the transition period simply won’t cut it.

"Small and medium-sized construction firms, which make up 99 percent of the industry, do not advertise for roles internationally. Also, from a migrant worker’s perspective, why go to the UK for just 12 months when they can settle in other countries for much longer and put down roots if they wish. If the 12-month work visa idea was supposed to be an olive branch to the business community, it leaves much to be desired.

"The government describes the construction and house building sectors as strategic and central to delivering its own aims.

"However, the plans set out today would make it impossible to meet the Government’s house building targets and the world-class infrastructure projects we have in the pipeline will be nothing but a pipedream."


www.fmb.org.uk

Lack of land and lending is blocking new homes, FMB research reveals

A lack of available small sites and a lack of finance top the list of barriers to SME house builders increasing their delivery of new homes, according to new research by the Federation of Master Builders’ (FMB).

Key results from the FMB’s House Builders’ Survey 2017, the only annual snapshot of SME house builders, include:

• Over half of small house builders (54%) say accessing finance is a major barrier to their ability to build more homes (up from 50% in 2016);

• A lack of available and viable land is the most commonly cited barrier (62%) to increasing output and 54% believe that the number of small opportunities for small site development are decreasing;

• 42% of SME house builders said that a shortage of skilled workers is a major barrier to their ability to build more new homes, and this rises to half (49%) when asked to look ahead over the next three years;

• One in three small house builders that employ EU workers believe the end of free movement will be a major constraint on their ability to build more homes;

• Half (49%) of SME builders view the planning system as a major constraint on their ability to grow and ‘inadequate resourcing of planning departments’ was again rated as the most significant cause of delay in the planning application process.

Brian Berry, Chief Executive of the FMB, said: "Almost a decade after the financial crisis, access to finance for small house builders is getting worse instead of better. The results of the FMB House Builders’ Survey suggest a slight worsening in the problems these firms face in accessing the finance they need to build. Assessments of lending conditions to SME developers were down slightly from 2016, the first fall in this measure since 2013. Small house builders express generally positive views of some recent Government initiatives in this area, such as the Home Building Fund, but we clearly need to double down on these efforts to make sure that SMEs have access to the finance they need to build Britain out of its housing crisis.”

Berry continued: “Our research also affirms just how vital it is that the Government acts on  key proposals in the  Housing White Paper, published earlier this year and designed to increase the opportunities for smaller scale development. Nearly two thirds of SMEs say that the lack of available and viable land is a major barrier to increasing output, the most commonly-cited barrier for the third year in a row. More worryingly still, over half say that the number of available small sites is, if anything, decreasing. The White Paper quite rightly emphasises the need to diversify the house building sector so it is less reliant on a small number of large house builders. In order to do this, we need the Government to make good on its proposals to improve the availability of small sites and speed-up the planning process for small sites.”

Berry concluded: “Over the next three years, half of SME house builders believe skills shortages will act as a major constraint on their ability to grow and this concern is now beginning to overtake more typical frustrations such as the planning system. If we get it wrong, Brexit and the end of free movement could further exacerbate the skills shortages we already have. The survey finds one third of SME house builders currently employ EU workers and this rises to 70% in London and the South East. The potential impact of post-Brexit immigration changes is therefore a cause for concern among small house builders. That’s why it’s so important that the Government introduces a transitionary period that allows the UK house building sector to gradually wean itself off high levels of EU labour.”

 

Growth slows for construction SMEs, says FMB

The SME construction sector grew in the second quarter of 2017, albeit at a slower rate than the first three months of the year, according to the Federation of Master Builders (FMB).

 

Key results from the FMB’s State of Trade Survey for Q2 2017, which is the only quarterly assessment of the UK-wide SME construction sector, include:

  • Q2 2017 was the 17th consecutive quarter of positive growth which means that the construction SME sector has been growing for more than four years (ie since Q2 2013);
  • Almost one in two construction SMEs predict rising workloads in the coming three months, with just 9% predicting a decrease in activity;
  • 83% of builders believe that material prices will rise in the next six months;
  • 60% of construction SMEs are struggling to hire bricklayers; 57% are struggling to hire carpenters and joiners; and 47% are struggling to hire plumbers;
  • Almost two-thirds (62%) of construction SMEs expect salaries and wages to increase in the next six months.

 

Brian Berry, Chief Executive of the FMB, said: “Rising material prices and salaries could be starting to dampen growth among construction SMEs. However, it is encouraging to see that the sector has continued to grow despite the recent snap General Election and the resulting hung Parliament. The construction SME sector is particularly vulnerable to any dips in consumer confidence that might come from periods of political uncertainty. It may be that a number of home owners decided to delay any big spending decisions on new extensions or loft conversions while the election campaign was underway – this would account for the slow-down in growth seen in the second quarter of 2017.”

Berry concluded: “Looking ahead, almost two-thirds of construction firms expect wages and salaries to increase over the next six months and this is in contrast to stagnant wages elsewhere in the economy. Rising salaries are undoubtedly the result of the escalating construction skills shortage – construction workers know their worth and are demanding higher wages from their employers. The majority of construction SMEs are struggling to recruit key tradespeople such as bricklayers and carpenters and we’re seeing shortages in other trades, such as plumbers and plasterers, starting to creep up. With Brexit on the horizon and worrying talk of the so-called ‘Tier 2’ immigration system replacing the free movement of people, the construction industry urges Ministers to bear in mind their strategic house building and infrastructure targets before pulling up the drawbridge on EU migrant workers.”

Mum the builder: Women twice as likely to take charge of building projects, says FMB

When it comes to making vital decisions regarding building work, women are twice as likely to have the final say on the style and scope of the project, according to new research by the Federation of Master Builders (FMB).

In advance of Mother’s Day this Sunday, the FMB also asked female home owners if they have ever carried out a range of basic DIY tasks around the home and the results were as follows:

•    Almost 80 percent have painted a room;
•    65 percent have put together flat-pack furniture;
•    58 percent have unblocked a sink;
•    Over 50 percent have changed a fuse;
•    44 percent have unblocked a toilet;
•    Over a quarter have cleared the guttering.

Jenny Carter, mum of one from North West London, said: “I’m happy to hire a builder for the big jobs but it would cost me a fortune if I had to pay a tradesperson every time I needed to change a fuse. If I’m a bit unsure, I tend to search online for “how-to” videos to help guide me through the process – these videos give people like me a bit more confidence to tackle the smaller jobs. Every family is different but in our house, when it comes to these sorts of tasks, I’m easily as handy as my other half.”

Brian Berry, Chief Executive of the Federation of Master Builders, said: “This research shows that any lingering gender stereotypes regarding domestic life are totally outdated. Not only do women lead on decisions regarding the style and scope of building projects, they also get stuck in themselves when hiring a builder isn’t necessary. In 21st century Britain, you’re just as likely to find a woman up a ladder clearing out the guttering or battling with flat-pack furniture, as you might be likely to find her performing some of the more traditional domestic chores.”

Berry concluded: “On a more serious note, the construction industry is facing a massive skills shortage and we’re crying out for more female builders. At present, only 2% of construction workers onsite are female and until we start to appeal to 50% of the population, we won’t be able to plug the skills gap. It is my hope that these hands-on women, many of whom will be mums, are inspiring their daughters to think differently about what is an acceptable career path for girls. There is no reason why young women can’t become the next generation of brickies and sparks and it’s our job to remind them of that.”

New apprenticeship funding ‘fair settlement’, says FMB

New apprenticeship funding proposals announced today by the Government look like a ‘fair settlement for small employers’, according to the Federation of Master Builders (FMB).

Brian Berry, FMB Chief Executive, said: “Getting skills and apprenticeships policy right is essential to the UK, and particularly so to the construction industry right now. We face serious skills shortages in our industry at the moment. The only long term cure for this is to recruit and train more people, in particular to attract a new generation of talent to take on the skilled jobs the industry creates. Small and medium-sized firms do the majority of training in our industry - micro businesses (those employing fewer than ten people) alone train around half of all construction apprentices. It is therefore crucial that new apprenticeship funding arrangements work for these firms and do not impose higher costs on them.”

Berry continued: “The funding arrangements announced today appear to strike a reasonable balance, which takes into account the support that small employers need. Those employers with wage bills of less than £3 million, who will fall beneath the threshold for paying the new Apprenticeship Levy, will be required to pay 10% contributions towards the cost of training and assessment. This means most small employers should not end up paying more towards training costs than they currently do. Furthermore, FMB members report significantly higher costs and difficulties associated with training apprentices straight out of school. Therefore, it is right that for small employers training 16-18 year olds this co-investment requirement will be waived and a further £1,000 payment will be paid to employers to help with these costs.”

Berry concluded: “One issue on which we have ongoing concerns is the difficulties and complexities which might come with the new digital apprenticeship service. Small firms express nervousness at the more hands-on role they are being asked to play in negotiating with and paying training providers, and there is real danger in the new system being time-consuming and complicated to a degree which puts off small firms from training. As such, we strongly welcome the decision not to require small employers to start using the new system until at least 2018. Government and representatives of small employers need to use this time to thoroughly road test the new system and make sure that it fits the needs of the very smallest firms, those we continue to rely on to train the majority of our industry’s workforce.”   

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