Government must listen to construction industry on levelling up

The Chartered Institute of Building (CIOB) has responded to today’s announcement from the Secretary of State for Levelling Up, Housing and Communities.

The Chartered Institute of Building (CIOB) has responded to the publishing of the levelling up white paper from the Secretary for Levelling Up, Housing and Communities, Michael Gove MP, launching the Government’s long awaited “levelling up” strategy. 

The strategy aims to close the gap between rich and poor parts of the country, dealing with regional disparities across housing costs, living standards and education. In order to deliver this vision, both central and local governments must hold discussions with communities, businesses and wider industries to understand local needs and practical actions. As a professional body, CIOB knows that the construction sector will play a large part in achieving levelling up across England and is well-placed to advise on strategies to improve the quality of housing and ensure that the sector is equipped with the necessary skills to match the levelling up ambition. In 2020, the Institute published a report entitled ‘The Real Face of Construction’ demonstrating the socio-economic importance of the sector as a driver for economic prosperity in each area of the UK. 

The white paper presents an opportunity to accelerate change and reshape industries. The Government has made it clear that it wants to create community pride and address the housing crisis, both in terms of affordability and quality. In order to do so, this will require greater cooperation and collaboration between local supply chains, and CIOB is pleased to see this Government acknowledge the positives of geographical clustering and role it can play in levelling up.  

Clustering could prove a critical tool in fostering closer cooperation across the construction supply chain and opportunities for knowledge sharing are essential to meet the challenges ahead. Clustering of businesses is seen as positive for innovation, productivity and raising the potential for international trade. 

The Institute recommends that the Government uses incentives such as low rents or low rates and provision of other services such as business mentoring that support the development of the sector. These should be provided for a diverse range of businesses such as engineers, architects, surveyors, contractors, specialists and product manufacturers. These clusters should be near to and linked to centres of education and training. Incentives should, however, where appropriate, be tied to engagement and training centres with detailed assessments of their effectiveness. 

Tackling poor quality and improving energy efficiency in homes was outlined in the white paper, however detail on how this would be achieved was nominal. CIOB and other built environment bodies have continued to call for the implementation of a national retrofit strategy which will address many of the missions outlined in the white paper. The Construction Leadership Council (CLC) has published a costed model for a National Retrofit Strategy, with over 50 supporter organisations (including CIOB) signed up. 

Disappointingly there was little mention of retrofitting within the white paper. The document highlighted that it can be used across the UK to achieve net zero as well as the announcement of a £2.2 billion funding scheme aimed at addressing the worst performing homes and those least able to pay.  

Historically, a lack of confidence in long-term policy direction has impeded the built environment sector’s ability to invest in low carbon technologies and skills, weakened the resilience of the construction supply chain and reinforced a lowest-cost procurement model which leaves no room for social value. This is being exacerbated by stop-start policy and eroded consumer and industry trust due to the failure of past initiatives such as the Green Deal and most recently, the Green Homes Grant (GHG). As the construction industry is actively involved in developing guidance for repurposing buildings, CIOB is keen to work with Government to learn lessons from previous initiatives to strengthen the repair, maintenance and improvement market.  

The white paper made a case for increasing home ownership and housing quality through a reformed planning system. CIOB has previously commented on the Department for Levelling Up, Housing and Communities (DLUHC) planning reforms, noting the diagnosis of barriers to housing delivery is overly simplistic.  

A reformed planning system must also address the structural issues in the housing delivery system, the dominance of volume housebuilders, and the accompanying negative impact on build out rates. Volume housebuilders are crucial to a successful housing delivery system and will continue to provide a significant proportion of the new homes in England. However, in recent decades they have come to dominate housing supply output as SMEs have struggled to recover from the financial crisis. SMEs built 40 per cent of new homes in 1980s, 23 per cent in 2008, but now build only 12 per cent. If the levelling up white paper is committed to providing opportunities for SMEs to aid in the wider agenda, it must seek to provide fairer chances and remove barriers that are preventing smaller businesses from engaging.  

Towards the end of the white paper, it states one of the next steps will be to implement reforms to the planning system. This is something CIOB will continue to monitor closely.