Labour manifesto offers welcome proposals on skills, but still not enough for SME builders, says industry

At least one part of Labour’s election manifesto has found favour with SME builders – and that’s the proposal to link its housing and skills policy as part of its industrial strategy.

Launched yesterday in Bradford, West Yorkshire, by party leader Jeremy Corbyn, the manifesto pledges that a Labour government would build over a million new homes, with 100,000 “affordable” council and housing association homes for rent and sale delivered a year by the end of the Parliament, if it wins the election in June.

But it is the way that the party says it will use its housebuilding programmes to tackle the skills shortage construction firms face that has caught builders’ eyes.

“We will make the building of new homes, including council homes, a priority through our National Transformation Fund, as part of a joined-up industrial and skills strategy that ensures a vibrant construction sector with a skilled workforce and rights at work,” the document says.

The Federation of Master Builders (FMB) has been quick to seize the occasion, saying Labour’s proposal to link housing and skills as the right approach for a post-Brexit UK.

“Labour’s pledge to integrate housing and skills policy is the right approach to tackling two of the key challenges we face in the building industry,” said Brian Berry, the FMB’s chief executive. “We are building too few homes in every part of the UK and this problem is exacerbated by the construction skills shortage. Jeremy Corbyn has said that freedom of movement would end under a Labour Government and it is therefore right that the party has a clear plan to build the homes we need and train the people we need to build them.”

One of the strengths of Labour’s manifesto is a “clear focus on apprenticeships and high quality training”, according to Berry.

“The commitment to doubling the number of NVQ Level 3 apprenticeships by 2020 will be well-received by small construction firms,” he added. “The sense of a decline in the standard of construction apprenticeships has reduced the attractiveness of taking on apprentices for many SMEs. SME construction firms still carry out two thirds of all apprenticeship training and nearly three quarters of construction SME bosses say they would be more likely to take on an apprentice if the standards to which apprentices are trained improved. A higher level skills base is key to increasing the UK’s productivity which trails behind other leading economies.”

However, Labour’s proposals leave things to be desired; there is little to address the “fundamental issue of industry capacity” Berry warned.

“Whichever party is in government after the General Election, a council house building programme would be a catalyst for boosting the capacity of the SME house building sector,” he added. “This would follow the recommendations of the House of Lords Economic Affairs Committee last year, which identified the sector’s vulnerability to the economic cycle as being a constant danger to the overall capacity of the house building industry. Ensuring that public sector house building contracts are opened up to SMEs is one key way the Government can buck the usual boom and bust economic cycle and maintain house building capacity.”

The National Federation of Builders (NFB), meanwhile, said Labour had failed to identify the main obstacles to growth faced by SMEs. The organisation said the manifesto offered an “optimistic view of the future” but lacked the detail needed to flesh out its good intentions.

“The NFB is delighted at Labour’s ambition to make public procurement fairer and tackle the scourge of late payment across supply chains. The focus on regional communities, including efforts to deliver rail electrification and expansion across the whole country through a national transformation fund, is also quite welcome,” the organisation said.

It is also supportive of Labour’s pledge to create a Department of Housing and a National Education Service to develop a skilled workforce.

“It is quite pleasing to see adult education stand out,” the organisation said. “However, the manifesto should have recognised existing good practice that would also need stimulus. SMEs build bigger and higher-quality homes more quickly than volume house builders, as well as training two-thirds of apprentices in the industry.”

However, it added: “The NFB and the HBA are disappointed that the Labour manifesto fails to mention reform of the planning process. The planning system is a major barrier to growth for many construction businesses. Whilst agreeing that planning authorities have experienced debilitating budget cuts, under-resourcing is not the main factor stifling the UK’s housing supply.

“Without mentioning excessive planning conditions, small sites and planning delays, the HBA struggles to understand how a Labour government would actually build more homes and better communities. SMEs are the beating heart of local economies and governments have failed to understand the value their expertise.

“There is much to favour about the Labour manifesto, but SMEs still require the detailed certainty that local businesses will be able to operate on a fairer playing field. We hope the Labour Party will explain their ambitions in greater detail over the coming weeks.”

Richard Beresford, the NFB’s chief executive, said: “Small and medium-sized builders are the key to addressing the construction industry’s long-term problems. The next government should help create a market where the best businesses succeed, no matter what their size. In short we need a government that believes in Britain’s SMEs.”

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