Industry reaction to government change

With Labour to form the next government with a landslide victory, we take a look at industry reaction from around the construction sector.

Justin Young, CEO of the Royal Institution of Chartered Surveyors, said: “On behalf of the Royal Institution of Chartered Surveyors, I am delighted to congratulate Labour on their election win. As Labour prepare to appoint ministers and look to department structures, it’s vital that they bestow an urgency to translate the plethora of promises made over the last five weeks into sound and workable policy.

Housing Delivery

“Labour’s ambitions are bold, but by pulling the right policy levers, they can be achievable. Delivering 1.5 million homes over a five-year period will be no easy feat. To achieve this, the public and private sectors would be required to deliver 300,000 new homes a year – a figure not hit since the 1960s, which was a time when local councils played a far greater role in housing delivery.

“Therefore, policymakers must introduce in a timely manner a programme of policies that speed up development and add significant resource to planning departments up and down the country. This will be particularly pertinent in Labour’s quest to achieve economic growth; many studies have agreed on the positive correlation between GDP growth and the availability of homes. If housing delivery is backloaded towards the end of parliament, then the electorate may not see benefits quickly enough.

Leadership

“Real, meaningful change requires long-term stability. Regardless of who is assigned to key positions across our sector, they must be given the time to executive their mandate; one of the reasons why we’ve seen such a lack of progress in housebuilding and construction is because we’ve had 16 housing ministers since 2010.

“To speed-up decision making, policymakers must ensure planning departments are properly resourced. Labour has promised 300 extra planning officers. While collectively a big number, this amounts to less than planning officer per local authority. Resource will be key to achieve significant planning reforms. As well as speeding up decision-making, planning reform is needed to ensure we empower SMEs housebuilders to add additional capacity and expertise. Smaller builders require much more certainty – something the current system does not deliver.

Skills

“Policymakers must also address the skills shortage – otherwise the UK will be unable to deliver on its 300,000-homes-a-year target and £805 billion infrastructure pipeline. At RICS, we are calling for Government Departments to work together to create a Built Environment Taskforce. The body should be responsible for mapping future labour needs to meet house building, retrofit and net zero needs. This will include a review of early-years education engagement including the introduction of a Built Environment GCSE in England, and an analysis of public sector skills retention and recruitment – including shared service planning models.

Commercial property

“There must also be a focus on reforming the business rates regime. Commercial real estate plays a fundamental role in fuelling economic growth, creating jobs and supporting communities. These properties are not just buildings; they are essential, diverse spaces where businesses, from shops and offices to factories, operate and thrive. The RICS 2022 Commercial Real Estate Impact Report illustrates that commercial real estate directly generates £66bn in GVA, over £15bn in tax revenues and employees more than 1 million people. However, with valuations dropping by as much as half due to a high interest rate environment, both small and large investors are having to grapple with tightening yields and margins. Therefore, policymakers must reduce business rates, which have become too high, complex and burdensome, and threaten to suppress growth and discourage much needed inward investment.”

Nick Gray, Currie & Brown’s UK and Europe Chief Operating Officer, has identified, five game-changing initiatives the new Labour government should pursue to improve the future of the construction industry including:

• Establish a clear long-term strategy for growth

“A clear long-term strategy for growth will give the construction industry the confidence to invest in itself – for example in key areas, such as modern methods of construction. The government must also commit to a properly costed infrastructure development plan and deliver against these commitments to avoid the volatility that has left earlier important initiatives, such as HS2, with unclear or ambiguous goals.” 

• Help unblock labour and skills shortages

“The new government has committed to creating over a million new homes. But there’s a chronic shortage of skilled labour, which the industry can’t solve on its own. It’s within the government’s gift to consider how it can support the industry to invest in training and apprenticeships for tradespeople through fiscal concessions – notably tax breaks.” 

• Reform planning

“Currently, the complex framework of statutory law and common law is messy and complicated. It’s also a huge deterrent to investment and the efficient delivery of projects. So, the new government urgently needs to reform planning law, to improve the efficient delivery of projects – especially schemes that are related to economic development.”

• Align planning across Whitehall departments

“Construction is fragmented within Whitehall and spread across several different spending departments. The new government would do well to address this misalignment to improve efficiency. One option might be to re-introduce the role of the chief construction adviser.”

• Re-visit the potential of PPP

“High levels of debt and a commitment to keeping the tax burden as low as possible creates a tricky conundrum. This could be resolved through public private partnerships. This could deliver obvious advantages for both the public purse and for institutional investors seeking long-term liability matching investment opportunities.”

Wayne Douglas, Managing Director at City & Country: “The Labour Government now must start delivering on its promises and take responsibility for building homes. This country in the past has suffered from nimbyism when it’s proven that new development creates sustainable places and supports communities, whether that’s through job creation, improved connectivity, community investment to support economic growth whilst reenergising existing and new towns and cities.

What is immediately obvious is the urgent need for an evolution in the way planning is dealt with and it needs to happen quickly. The proposed housing plans to require councils to build on the ‘grey belt’ and utilise brownfield sites is a step in the right direction to unlocking housing delivery and hitting those housing targets this country so desperately needs. Now, Keir Starmer needs to turn Labour’s promises into policies and give the UK timescales on when this will be implemented not ‘if’.

Lynda Clark, Editor of First Time Buyer Magazine, comments: “Housing has become a major focus in this election’s debate, more so than in recent years. Indicative polls over the last few weeks showed that first time buyers are optimistic about the changes that a Labour Government will bring to a tough housing market. They are right to hope for better – house prices are high, yanking up deposits behind them, while mortgage rates linger at around 5%, making it hard to borrow. Labour’s plans to address the housing crisis through an accelerated housebuilding programme will lead to better housing options for buyers, and first time buyers will be supported by the extended mortgage guarantee scheme. Existing initiatives including shared ownership, Rent to Buy and London Living Rent remain available, and with greater backing from a new Government these will continue to help thousands of first time buyers each year escape the rental trap and get on the property ladder.”

Kate Faulkner OBE, property expert, comments: “A better housing market for us all requires the Party in power to take time to understand how to deliver housing for all – just tackling one problem in one sector at a time will fail. For me, there are four things a new Government needs to commit to if it really wants to make a difference:-

“We need a commitment that those who work in housing, from ministers to civil servants, will remain in their posts for a minimum of five years. Chopping and changing those ‘in charge’ is a key reason why the housing crisis has not been addressed as much as it could have been.

“New housing teams would really benefit from reading the Nationwide Foundation ‘Homes for All’ paper. The recommendations outlined in this document offer a long-term solution to tackle housing problems, which can only be achieved by enlisting cross-party and industry support.

“For an easy win within the first 100 days, the Government could support the implementation of the key recommendations of the Home Buying and Selling Council, of which I am the chair. We offer a cross section of easy fix solutions which would immediately improve buying and selling a home, while others will revolutionise the process for everyone over the next five years.

“Finally, I would like to see MPs, of all parties, tasked with submitting a plan on how they will work with their local public and private housing and land providers. Critical is how to house those in temporary accommodation within their constituencies and how we can deliver more social homes to reduce local housing waiting lists by releasing land and funding. This alone will unlock over one million homes back into the private sector, helping first time buyers onto the property ladder and alleviating supply issues for those renting privately.”

Craig Carson, Managing Director of Barratt West London, comments: “For the first time in nearly a decade, there will be a Labour government working together with the Mayor of London and with a commitment to build 1.5m homes across the next parliament, overhaul the planning system and, perhaps crucially for Londoners, to take a brownfield-first approach when it comes to development. The prioritisation of brownfield and the new greybelt land will help unlock large swathes of land for development, including former car parks and commercial units. This will be particularly beneficial in the outer boroughs of London such as Barnet, Harrow, Ealing, Newham and Brent, alongside more central locations such as Southwark, ensuring developers can accelerate build programmes and deliver much-needed high quality, sustainable homes for Londoners. It is vital that the new government works with the Mayor to create a pro-development environment and offer support to first time buyers and young families to be able to get a foot on the ladder in the capital.”

Andrew Griffiths, Director of Policy & Corporate Development at Planet Mark comments: “We need to see the Labour Government take clear, tangible steps to demonstrate its recognition of net zero as the greatest commercial opportunity of our time.”

“There is a lot to do in little time, so prioritisation is key. Importantly, the new Government must resist the urge to end and alter existing processes and departments established by the previous Conservative Government that work or showed promise. Established last year, the Department for Energy Security and Net Zero is a prime example of a great initiative that doesn’t need unnecessary interference to rebrand/restructure in sweeping ways.”

“The work conducted by the Green Skills Task Force under the previous Conservative Government must be followed through. The task force’s report is complete, highly detailed, and full of insights and ideas from private enterprise. In principle this is a quick win that could be implemented quickly for the UK green skills revolution to accelerate.”

“However, there are areas which the Labour Government does need to change. For a start, they must deliver on their manifesto pledge to reverse the damaging policies the previous Government placed, for example restricting the Bank of England from considering climate change in its mandates.”

“Green energy also needs improvements if we are to achieve our ambitions and commitment as a country to be net zero by 2050. Establishing Great British Energy grabs headlines, but equally important are improvements that reduce the red tape and planning restrictions surrounding building green energy infrastructure such as offshore wind farms and electric car charging terminals, reducing grid connection waiting times.”

“And then there is data. Making the sharing of critical data for net zero planning far more fluid would instantly accelerate the UK’s progress to net zero. If businesses are to create accurate and realistic net zero plans, they need access to vital data like energy, water and waste usage. Currently, this type of data is often held by commercial landlords, who are under no obligation to share it with their tenants.”

“In the longer term, the Labour Government needs to create a regulatory body for carbon accounting. Just as the Financial Conduct Authority (FCA) regulates the financial sector, we need an overarching governing body for carbon accounting to ensure consistency, provide guidance and to hold organisations accountable if we are to reach net zero by 2050.”

Hannah Scott, CEO of Oxfordshire Greentech, said:  “I am deeply concerned by Labour’s election pledge to prioritize the release of lower grade green belt land for development. While addressing housing needs is crucial, we must not compromise our environmental integrity,”

“The so-called ‘grey belt’ often provides essential ecological services and green space for communities. Labour’s true priority should be retrofitting heat pumps in social housing, eradicating fuel poverty, and creating a national energy infrastructure that is affordable and provides comfort for everyone. True sustainability requires innovative urban planning that respects and integrates our natural landscapes, rather than sacrificing them for short-term gains.”

“As a matter of urgency, the Labour Party must tackle the housing crisis by redeveloping derelict and underused commercial buildings into social or affordable housing while also taking stricter enforcement action against empty housing and foreign investment in residential property, where the “buy-to-leave” phenomenon is jeopardising affordability in high demand areas like London.”

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