As I have discussed in previous posts, the construction industry skills gap is something that at some point will affect us all. Previous figures suggested there are 182,000 construction jobs to be filled and importantly, this is not taking account of new projects either announced or on the horizon. With projects such as Hickley Point C already affecting labour available for current projects and the announcement in the Autumn budget of major infrastructure projects going ahead to support the planned increase in housing, such as Crossrail 2 and HS3 in addition to the planned Heathrow expansion, something needs to be done urgently.
I wrote before that an immediate solution for this would attracting millennials as there is a general lack of interest from this age group in the industry. They could be key to filling the void in the short term if we could engage with them. However, for a long term solution, we need to look to a younger generation, to primary and secondary schools for a source of future labour. Research shows that those who have a family member or people close to them working in the construction industry are significantly more likely to take a job in the Built Environment. Those with no connections are very unlikely. So how can we change this?
We need to look to students still at school. Reaching children who have not made their minds up about a career and therefore their academic route - GCSE choices, A-Level choices, BTECs etc or even apprenticeships - could be the difference as to whether they are able to enter the industry easily or not and it is far more likely that they would if they didn't need to go back to school to get required qualifications. The main issues seem to be a lack of knowledge of what career options are available in construction, a lack of interest in the industry, and a pre-conceived idea of what working in construction is like. The problem with these 3 issues is that there is little engagement between the industry and schools to change this. Whilst the industry talks about it, they don't do that much, and schools are no better, saying they want to be involved but in reality do not promote the construction industry as a good employer and on the whole do not engage with construction employers.
Organisations such as BESS Programme and Class of Your Own have been set up and fully engage with schools, pupils and the construction industry. BESS - Built Environment Skills in School is a project which aims to inform pupils in school and further education about the opportunities available to them in the Construction industry. The programme recognises the issue of the skills gap in the industry and is seeking to address this but it can not be left to one or two organisations to deal with whilst the industry sits back and just talks about what can be done.
We, in construction, have a responsibility to ensure that we inspire the next generation so that we can ensure the skills gap closes. If we continue to only discuss and not act, the number of construction jobs that needs to be filled will continue to rise well above the current level of 182,000. However, what is clear is that it is not just a lack of action by the construction industry, but also a lack of engagement by schools and a lack of knowledge and understanding of students and their families who are likely to be the ones giving careers advice. It is vital that schools are more pro-active and give pupils options, but it is equally important that they have access to material and resources in order to do this.
There are easy ways to engage with this generation through organisations such as BESS who. If you would like to get involved with the Built Environment Skills In Schools Programme, you can follow them on Twitter @BESSprogramme and visit their website to create a 90 second career video that will be used to inspire the next generation of construction professionals. Find more info at http://www.beskillsinschools.co.uk/home-page/get-involved-2/
Showing posts with label Autumn Budget 2016. Show all posts
Showing posts with label Autumn Budget 2016. Show all posts
Monday, 5 December 2016
Friday, 25 November 2016
The Autumn Budget 2016 and the UK Housing crisis
Wednesday's budget has a number of implications for the construction industry in areas including much needed housing and improvements to the transport network throughout the UK. However, will these announcements have the positive impact on the UK housing crisis we have been hoping for?
The Government has announced it will build 40,000 new affordable homes. But what does this actually mean? Whilst 40,000 homes may seem like a lot it will actually be an overall reduction of approximately 13,000. According to the Office for Budget Responsibility (OBR) as a result of Wednesday's budget, house building is now likely to slow. There are a number of announcements that will result in house building increasing, but with others causing a slowdown, the overall result will be a fall of 0.2% in residential investment growth.
The OBR continued to say the announced £1.4bn increase in grant funding for affordable house building would partly offset the fall, in addition to the disposal of public land commencing sooner which in turn would bring the construction of 10,000 homes into the forecast period. However, this will not necessarily increasing funding overall. The real issue here is that the wording suggests a substantially large number of houses will be built but the reality is that the governments target of 1 million homes by 2020 is getting further and further away.
The first policy announcement relating to Housing was that Housing Associations will be able to spend grants on building homes for rent. The £1.4bn that is being made available for affordable housing will be given to Housing Associations, however, the plan is that Local Authorities bid for a proportion of this fund to put towards affordable rent, shared ownership schemes or rent to buy schemes
The second was that mandatory “Pay to Stay” measures will stop and therefore will no longer mean increased rents for higher income council tenants. This is an interesting one as previously those who earned £60,000 or more could be charged market rate rent if they lived in social housing, if the landlord decided to. It was then suggested that it would become mandatory for those who earned £30,000 (or £40k in London) to pay market rates for rent. It has now been confirmed that it will not be happening, and left to the discretion of the Local Authority. However the government is looking at ways to ensure that those on higher income contribute more to social housing. So what does the removal of the Pay to Stay policy mean for UK Housing stock? In reality, not a lot. It will simply mean a reduction in revenue to fund discounts for the right to buy scheme.
In addition to these policies, there will be a £3.15bn fund to build 90,000 new homes in London. Again, this sounds great, but these will be built over a long period of time, with no exact timeframe determined. The good news is that a priority for this money is to make housing available to low income families at a below market rent, as well as properties with rent restricted to one third of the average income of a typical middle income family.
Additional funding and house building policies aside, the government has not changed the tax rules around buy to let properties and mortgage relief, however it has decided to remove estate agent fees completely. This will mean two things. Firstly, with no change to the tax relief on second homes, less people are buying properties for the purpose of buy to let. The benefit of this is that there is a larger supply of property for those trying to get on the ladder, however this is obviously if a) they can afford the deposit and b) if they can get a mortgage - two key points that are often skimmed over by the Government. The drawback here is that for those that can not afford to buy, there will now be a smaller pool of rental properties on the market. Secondly, the scrapping of estate agent fees is likely to be a good thing for renters not having to pay for contracts to be printed however we should note that these costs are likely to be passed on to landlords and in turn, to renters in the form of increased rent.
All in all, it is good to see more funding to being allocated to housing but the reality is that there are less houses being built than previously forecast and if it continues in this way the government will not hit their target of 1 million homes by 2020.
The Government has announced it will build 40,000 new affordable homes. But what does this actually mean? Whilst 40,000 homes may seem like a lot it will actually be an overall reduction of approximately 13,000. According to the Office for Budget Responsibility (OBR) as a result of Wednesday's budget, house building is now likely to slow. There are a number of announcements that will result in house building increasing, but with others causing a slowdown, the overall result will be a fall of 0.2% in residential investment growth.
The OBR continued to say the announced £1.4bn increase in grant funding for affordable house building would partly offset the fall, in addition to the disposal of public land commencing sooner which in turn would bring the construction of 10,000 homes into the forecast period. However, this will not necessarily increasing funding overall. The real issue here is that the wording suggests a substantially large number of houses will be built but the reality is that the governments target of 1 million homes by 2020 is getting further and further away.
The first policy announcement relating to Housing was that Housing Associations will be able to spend grants on building homes for rent. The £1.4bn that is being made available for affordable housing will be given to Housing Associations, however, the plan is that Local Authorities bid for a proportion of this fund to put towards affordable rent, shared ownership schemes or rent to buy schemes
The second was that mandatory “Pay to Stay” measures will stop and therefore will no longer mean increased rents for higher income council tenants. This is an interesting one as previously those who earned £60,000 or more could be charged market rate rent if they lived in social housing, if the landlord decided to. It was then suggested that it would become mandatory for those who earned £30,000 (or £40k in London) to pay market rates for rent. It has now been confirmed that it will not be happening, and left to the discretion of the Local Authority. However the government is looking at ways to ensure that those on higher income contribute more to social housing. So what does the removal of the Pay to Stay policy mean for UK Housing stock? In reality, not a lot. It will simply mean a reduction in revenue to fund discounts for the right to buy scheme.
In addition to these policies, there will be a £3.15bn fund to build 90,000 new homes in London. Again, this sounds great, but these will be built over a long period of time, with no exact timeframe determined. The good news is that a priority for this money is to make housing available to low income families at a below market rent, as well as properties with rent restricted to one third of the average income of a typical middle income family.
Additional funding and house building policies aside, the government has not changed the tax rules around buy to let properties and mortgage relief, however it has decided to remove estate agent fees completely. This will mean two things. Firstly, with no change to the tax relief on second homes, less people are buying properties for the purpose of buy to let. The benefit of this is that there is a larger supply of property for those trying to get on the ladder, however this is obviously if a) they can afford the deposit and b) if they can get a mortgage - two key points that are often skimmed over by the Government. The drawback here is that for those that can not afford to buy, there will now be a smaller pool of rental properties on the market. Secondly, the scrapping of estate agent fees is likely to be a good thing for renters not having to pay for contracts to be printed however we should note that these costs are likely to be passed on to landlords and in turn, to renters in the form of increased rent.
All in all, it is good to see more funding to being allocated to housing but the reality is that there are less houses being built than previously forecast and if it continues in this way the government will not hit their target of 1 million homes by 2020.
Subscribe to:
Posts (Atom)