黑洞社区

In less than seven months the UK will sever its formal ties with the EU after more than four decades of close co鈥憃peration 鈥� some would say too close 鈥� in order to 鈥済o it alone鈥�. 

Ever since Article 50 was triggered 18 months ago, UK government negotiators have been in locked in talks with their opposite numbers in Brussels over what will be the terms of the country鈥檚 relationship with Europe come Brexit Day on 29 March next year. But these discussions have been tortuously slow and seem to have yielded little. With the clock ticking, there urgently needs to be more meaningful progress towards a deal on which all sides agree.

While there have been calls in certain political circles for a 鈥渘o-deal鈥� exit, the construction industry is clear that leaving the EU without a deal would be disastrous for the sector 鈥� with a worsening of skills shortages just one of the likely negative effects.

鈥淲hile we鈥檝e had some good conversations, there isn鈥檛 much coming out the other side鈥�

Alan Vallance, Riba 

So with only months to go before the UK economy steps into the unknown, the charge is that ministers have not acted adequately to enable construction firms to plan for the outcome of Brexit and reassure them that leaving the EU 鈥� deal or no deal 鈥� won鈥檛 leave them out of pocket, bereft of the investment, staff and the materials they need in order to build the homes the country needs and the infrastructure to go with it. But while the government clearly has its critics, some are asking what the industry has done to make its voice heard. How has it tackled the issue of Brexit? And how has it engaged with ministers to get the reassurances it says it wants? 

A sense of abandonment 

As part of 黑洞社区鈥檚 new campaign 鈥� 黑洞社区 Without Borders: Construction Needs a Deal 鈥� we recently polled the sector for its views on Brexit and on the government鈥檚 negotiations with Brussels. The findings reveal an industry concerned that ministers have cast it adrift, seemingly to focus instead on sectors that are of more obvious appeal to the electorate though of less economic importance, such as fishing.

The results of 黑洞社区鈥檚 survey of more than 600 individuals suggest many feel abandoned by ministers, with 65% believing the government is not interested in getting the construction sector a good deal. Just one in 10 thought it was.

Survey respondents seemed to be struggling to believe the industry is even a consideration for ministers, as we approach Brexit. One said: 鈥淚 have seen no evidence to suggest the impact of Brexit on construction has been considered by our negotiators.鈥� 

Depleted workforce

Lack of communication from Westminster had put the sector on the back foot, argued another: 鈥淭he system seems murky and non鈥憈ransparent. We feel the government should have held consultations with businesses and understood more about what the people want and don鈥檛 want.鈥�

Don O鈥橲ullivan, Galliard Homes鈥� chief executive, agrees, not least because of fears of a depleted industry workforce from next March. 鈥淏rexit will trigger an employee shortage in the construction sector as European workers won鈥檛 be replaced and others may leave as we exit the EU. No one in government is advising us,鈥� he says.

When asked by 黑洞社区 for a response, the Department for Business, Energy and Industrial Strategy said negotiations regarding a future economic partnership with the EU, including on trade and customs arrangements, were 鈥渙ngoing鈥� and pointed to the recently published series of technical notices it said gave advice to firms on a range of issues, including customs procedures. Yet none of these were specific to construction, unlike for farming and other industries.

Government engagement

The Department for Exiting the European Union, when asked what it is doing to prepare the construction sector for Brexit 鈥� and for its response to claims that it had effectively sidelined the industry 鈥� responded in a statement: 鈥淥n 12 July 2018, the government published its white paper setting out a clear proposal for the future relationship we want to build with the EU.

鈥淪ince it was published, ministers and officials from across government have been travelling up and down the country talking to people, businesses and organisations about its contents. We will continue our extensive engagement throughout the Brexit process. 

鈥淚n the white paper, we set out proposals to ensure continued frictionless access at the border to each other鈥檚 markets for goods.鈥�

The government says that while freedom of movement will end, the UK will still welcome the brightest and best to its shores. This may cater for university-educated high-flyers or those with a few million pounds to invest in the UK, but it鈥檚 less clear where this leaves site workers from eastern Europe coming here to help us build the new homes, schools, hospitals and infrastructure the country needs.

Lack of understanding

While the government stands accused of having little constructive to say to the industry about Brexit, what about the industry鈥檚 own efforts to persuade ministers of the need to recognise construction in the debate? Gleeds chairman Richard Steer believes these have been lacklustre.

He argues that while construction has been ignored compared with sectors such as farming and the automotive industry, the lack of a strong voice from our industry is disappointing.

鈥淪ome trade bodies have spoken out, but the industry needs to be much more focused. Leading industry groups need to be beating a path to the door of Number 10,鈥� he says.

But talks are taking place. The RIBA鈥檚 chief executive, Alan Vallance, says there has been a positive engagement between the architects鈥� body and various ministeries through forums such as the Creative Industries Council. Vallance himself has attended about 100 meetings with Whitehall officials over the past two years, 鈥渨earing out shoe leather鈥�, as he puts it. 

Since EU citizens make up one-fifth of registered architects working in the UK, Vallance says it is urgent to get certainty for them. He would also like to see arrangements put in place sooner rather than later for UK practices to be able to work in the EU after Brexit.

But the omens for obtaining such assurances aren鈥檛 great, it seems. Vallance says: 鈥淲hile we鈥檝e had some good conversations, there isn鈥檛 much coming out the other side. There are seven months to go before we officially leave the EU, and there has been little in the way of specifics around areas like mutual recognition of professional qualifications. 

鈥淚鈥檝e no doubt that practices will make the best of whatever Brexit turns out like. But no one likes uncertainty, and it would be much more helpful if we could get more [from ministers] in the way of detail,鈥� says Vallance.

Unclear position

For its part, RICS has collaborated with the RIBA, the Chartered Institute of 黑洞社区 and the Royal Town Planning Institute in a series of talks with ministers. But such discussions have not brought the government any closer to making clear its position on the construction sector post-Brexit, says RICS policy manager Hew Edgar: 鈥淲e want to work with the government to make Brexit work, but the information we鈥檙e getting is neither clear nor timely.鈥�

As Edgar points out, the revolving door policy for ministerial posts is not helping the situation. 鈥淲e had a series of roundtable events with Greg Hands, the then-minister of state at the Department for International Trade, where we discussed the importance of the built environment. We felt we were getting somewhere, so it was a shame when he resigned [in June 2018],鈥� he says.  

鈥淲e hope to be meeting up with his successor, George Hollingbury, soon,鈥� he adds. 

Simon Rawlinson, head of Strategic Research and Insight team at Arcadis and a member of the CLC, says that discussions about Brexit have been taking place to the same degree as other industries. He says: 鈥淭he CLC is working with government to mitigate some of these issues. We鈥檝e made our points clearly about a number of areas [labour, investment, supply chains] and the industry has worked in a collaborative way. But there are huge number of things that are currently unresolved 鈥� and currently unresolvable.鈥�

Trade body Build UK, meanwhile, has joined forces with the CBI, throwing its weight behind the employer鈥檚 organisation鈥檚 stand on issues such as freedom of movement and the employment of migrant workers.

Suzannah Nichol, Build UK鈥檚 chief executive, says: 鈥淓very meeting and discussion we have with government is framed by Brexit. My team at Build UK works closely with the CBI and the heads of the other major sectors, as while there are some sector specific issues the majority of concerns are shared across the business community. We are pushing ministers and officials hard for certainty and clear policy that will help our members keep Britain building.鈥�

Ann Bentley, global board director of Rider Levett Bucknall and a CLC member, agrees that the CBI 鈥� which has its own construction council 鈥� is one of the industry鈥檚 best bets for putting its message across. 鈥淚t鈥檚 getting the most access at a sensible level and has regular meetings with government,鈥� she says. 

Bentley also believes there is a 鈥渉uge amount鈥� of informal discussion going on with ministers and Whitehall mandarins. 

But she questions whether the sector itself is paying the attention it should to Brexit: 鈥淭he industry is doing quite well at the moment with a number of companies making a decent profit. We鈥檙e going through a reasonably good period and one might say that perhaps some have taken their eye off the Brexit ball.鈥�

Fragmented message

But some still share Steer鈥檚 concerns regarding the fragmented nature of the construction industry鈥檚 dealings with government, and whether those in the sector are doing enough to push their case. 

Liberal Democrat peer Lord Andrew Stunell, a former building regulations minister and an ardent opponent of a hard Brexit, says exiting the EU is 鈥渁 clear existential threat to the construction industry鈥�, and while the government might point to its links with the sector through the CLC, 鈥渁 lot of people in the industry feel distanced from the work [the CLC] is doing鈥�.

Stunell points to industries such as the automotive sector, which has effectively gained the ear of ministers through its own body, the very vocal Society of Motor Manufacturers and Traders. 鈥淚鈥檇 like to see more positive signs from the CLC that it is grasping the issues and that it鈥檚 holding its end up,鈥� he says. 

He suggests the industry might consider a more grassroots approach to influence the government on Brexit: 鈥淚f [the CLC] says it鈥檚 doing its best but it鈥檚 not being listened to, then the industry needs to take advantage of its national reach.鈥� 

As there is construction work in every constituency in the country, perhaps the industry鈥檚 90,000 or so companies should reach out directly to their local MPs to press their argument. 鈥淎 very powerful case is there, waiting to be made,鈥� Stunell says. 

鈥淭he government has not yet gripped what needs to be done, particularly around rules and regulations, and time is slipping away.鈥�

Common sense

Others take a less proactive, but perhaps more pragmatic view. Redrow chief executive John Tutte says he and others 鈥渨ould like to see some clarity as to where we are at, and while you have uncertainty, you always have caution.

鈥淲e don鈥檛 want a really bad deal, but you have to have a point where you need to be in a position to get up and walk away. You would hope common sense will prevail. The EU needs a deal as well.鈥�

And Colin Lewis, chief executive of Chesterfield-based housebuilder Avant Homes, acknowledges the level of detail from government has been inadequate, but wonders what ministers are supposed to do. 鈥淵es, I want to see more clarity but I also appreciate that the government doesn鈥檛 want to give too much away when negotiating.鈥�  

Lewis thinks the House Builders Federation has done a 鈥渃racking job鈥� of representing the sector鈥檚 interests when dealing with Whitehall, but he also believes ministers might have more on their plate than worrying about what housebuilders think.

鈥淭hat said, I share the concern around the level of uncertainty and I鈥檓 very supportive of a drive for greater clarity about what鈥檚 going on. But honestly, I don鈥檛 think the government knows either.鈥�