黑洞社区

Brian Berry is not impressed. We are less than a year away from the next general election 鈥� hell, it could be just a few months 鈥� and what the major parties have to offer to his constituency is less than satisfactory.  

On the one hand there is the Conservative government, long in the tooth and offering much-wanted engagement far too late in the day. On the other, there is the opposition: a Labour Party that appears to be more interested in courting big business than giving SMEs a hearing.  

So, what is it that the chief executive of the Federation of Master Builders (FMB) wants, and why won鈥檛 the politicians give it to him? 

Berry can tell you in a line: 鈥淲e need to build more homes and we need to improve the ones we have.鈥� Not much to disagree with there as far as either of the parties is concerned, but it is the manner and speed with which these goals are delivered that concerns him.  

On retrofit, Berry says the government鈥檚 record has been 鈥渧ery disappointing鈥� and implores the next administration to treat the issue as a national infrastructure project. 鈥淚 would be saying, 鈥�We鈥檝e got 28 million homes, how are we going to address that鈥�?鈥� he says.

鈥淲hat incentives are we going to put in place to encourage that? How are we going to upskill the workforce to make sure we鈥檝e got competent people to do that work? What regulations or penalties will we put in place to shape the market in the medium to long term to make sure we bring properties up to required EPC?鈥� 

The FMB鈥檚 own surveys suggest that consumer demand is low because people lack information, and Berry says this requires government intervention. He argues that the current administration鈥檚 approach of focusing initial retrofit investment on social housing 鈥� an area where it can achieve change at scale 鈥� in order to build up a market makes little sense.  

The problem, he explains, is that 鈥渢hose companies doing that retrofit work aren鈥檛 the sort of companies that are often doing repairs, maintenance, home improvements in the owner-occupied sector鈥�.

Local authorities typically contract much larger companies to carry out retrofit schemes, whereas in the owner-occupied sector, where properties are typically more unique, smaller companies, which might employ no more than five or 10 people, are usually carrying out the work. 

鈥淥f course, you are going to get some transfer of skills but maybe not on the scale needed within the time that is needed,鈥� he says.

I suggest to him that a national push towards retrofit could benefit big contractors more than SMEs. He agrees that a future government would 鈥渘eed to guard against that鈥� but that smaller firms will be essential to achieve the capacity necessary.

鈥淲e need to bring in all the contractors because we鈥檙e going to need lots and lots of them to do 28 million homes,鈥� he says. 

On the other side of the political aisle, Berry expresses frustration at the Labour Party鈥檚 decision to row back on its 鈥渆ncouraging鈥� commitments to create a low carbon economy. While Ed Miliband had once positioned himself as an energetic would-be energy secretary ready to carry out a green revolution in the UK, his party leadership鈥檚 allergy to expensive, attention-grabbing policymaking, has led to a decline in ambition.

A plan to retrofit 19 million homes over the course of 10 years has been reduce to five million, while the party鈥檚 pledge to invest 拢28bn in the green economy has been halved.

On housebuilding, too, Berry is concerned about the opposition鈥檚 direction of travel. He notes that, despite their reputation as rabble-rousing anti-capitalists, Jeremy Corbyn鈥檚 leadership team engaged positively with small businesses in the construction sector.

Any market that becomes more and more contracted, it鈥檚 not good for consumers

鈥淛ohn McDonnell was a good friend of the FMB and stood up and spoke about the value of the building industry and small builders,鈥� he says. 鈥淵ou hear less of that from the current Labour front bench. My impression is that they are engaging with larger businesses, trying to work with big institutions and the City.鈥�

By contrast, Berry says there has been 鈥減oor engagement, particularly on housing with SME builders鈥�, and he is concerned that this could feed into Labour鈥檚 approach to increase housebuilding. He says a strong role for SMEs in housebuilding will ensure diversity of design, protect against 鈥減oor consumer choice鈥� and help to level up deprived parts of the country.

鈥淪MEs are really important because they are generating economic growth in every town and every village, so any government that鈥檚 looking to spread regional economic growth, should be focusing on SME housebuilders and also retrofit because that would actually get the money away from London and the South-east to every part of the country.鈥�

He notes that the recent deal between Barratt and Redrow, the biggest and sixth-biggest housebuilders in the country respectively, is proof of how concentrated the sector has become. 鈥淎ny market that becomes more and more contracted, it鈥檚 not good for consumers.

鈥淲e know from the Competition and Markets Authority report that there have been some unhealthy suggestions about pricing,鈥� he says, noting that he was not surprised by the findings of the regulator鈥檚 recent market study.  

鈥淚 think it鈥檚 good they recognise that the market isn鈥檛 working as it should do,鈥� he says, while suggesting that the report should have recognised the difference between SMEs and micro-SMEs.

鈥淎 lot of small and very small companies and micros will do home improvements and have extensions. Then they might build one house and then, if the market conditions are right, they will build six,鈥� he says.

While policies such as Help to Buy have benefited larger SME housebuilders, he claims the complexity of the system means micros do not reap the rewards.  

Planning, he says, is the policy area where the difference could be made, suggesting that more small sites be allocated in local plans and funding for planning departments be increased. 鈥淔or larger companies, [planning delays] are still a problem, but for a small one, it will put you off because it creates cash flow problems if you鈥檝e got to wait months to get the application through,鈥� he says.

鈥淭here hasn鈥檛 been one SME that has grown to become a major housebuilder in the last 25 years,鈥� Berry adds. 鈥淭he market is effectively broken鈥�  

In order to build more homes and improve the ones we have, there is another policy area that will require attention: skills and training. 鈥淲e have got a big challenge in our own industry about standards, which is something the FMB has been a strong champion of over many years.

Berry wants the next government to introduce mandatory licensing for general contractors as a way of pushing up standards in the sector. 鈥淭he fact that anyone can be a builder is not helpful to the reputation of the industry,鈥� he says.

鈥淐onsumers often think of the building industry as associated with cowboy builders and poor standards 鈥� it becomes entertainment on TV when things go wrong. We need to redress that.鈥� 

[Licensing] is not going to wipe out the industry, it will knock out those that shouldn鈥檛 be in the industry

While more than three-quarters of FMB members support licensing, I put it to Berry that licensing could cause an exodus of other workers from the sector, as it reportedly has within the building control profession. He does not dispute this but argues instead that improving standards will attract a larger and more diverse workforce in the long run and create demand for improved vocational training across the country.  

鈥淚 think it will be positive overall,鈥� he says. 鈥淭hose companies that are not meeting standards will drop out, so you could argue when you鈥檙e declining an already shrinking base, but actually I think it will do a lot to attract other people to come into our industry and start their own business鈥�.

He points out that the number of women on the tools has not really increased since he has been involved with the FMB and that the industry continues to have trouble attracting people of colour. 鈥淸Licensing] is not going to wipe out the industry, it will knock out those that shouldn鈥檛 be in the industry,鈥� he adds. 

For Berry, licensing must go hand in hand with an improvement in support for vocational education. He says the UK is 鈥減laying a long game鈥� in catching up on training skilled constructin workers, particularly in the south of the country.

鈥淚 think what鈥檚 happened in London and the South-east is, going back over the last 20 years or more, there has been a reliance on migrant workers and EU workers to fill the gaps without feeling the need to train people,鈥� he says. 鈥淭he government has supposedly tightened up on immigration and so we鈥檙e struggling to find enough people. Now we鈥檝e got to train people in this country. That鈥檚 a good thing.鈥� 

But, so far, he has once again been unimpressed by the record of policymakers. Despite Gilian Keegan鈥檚 supportive rhetoric, Berry says having a former apprentice as education secretary has 鈥渘ot particularly鈥� improved things.

鈥淲hat we have seen in recent years is talk about boot camps and shared apprenticeships 鈥� these are sticking plasters. We need fundamental reform to ensure we鈥檝e got high standard apprenticeships that are robust and that are available to more people across the country.鈥�

He says he wants to see a wholesale review of the UK鈥檚 training landscape, as well as significantly more funding for colleges of further education.  

While the predicted date of the election seems to change daily, it is clear that both parties are getting prepared. Berry says he was recently emailed by the Conservative Party asking him to submit the FMB鈥檚 suggested licensing policy to their manifesto team. 鈥淵ou think, gosh, it鈥檚 a bit late in the day, you could have actually done a lot of what we鈥檝e been asking for 鈥� so that鈥檚 a bit rich, but anyway, at least they鈥檙e opening up and reaching out,鈥� he says. 

By contrast, engaging with the opposition has been a little more challenging. 鈥淢y impression of the Labour Party is it has become more closed [鈥�] I鈥檓 hoping that Labour will engage, but we need to be doing it now.

鈥淎 good example is retrofit. What are the standards they鈥檙e going to use? Are they going to use the PAS2030 standard? How are they going to get the workforce up to speed in that time? I worry that, if they form the next government, there won鈥檛 be the workforce there to deliver because we haven鈥檛 spent the time engaging about the next steps.鈥�  

It could be June or October 鈥� or concievably next January 鈥� but, whenever the next general election is, time is running out fast for the big parties to get small builders on their side.