Ask the Experts: Brian Berry on construction

Thursday, 5 February 2009 5:10 PM

By Sarah Garrod

The construction industry has been hit hard by a struggling housing market in recent months, with new orders down and redundancy facing many.

But the government has continually promised to do all it can to turn this around, which more recently saw the prime minister pledge to build thousands of new council houses.

The Federation of Master Builders (FMB) is a trade association which protects the interests of small to medium sized building firms, making it the largest trade association in the UK building industry.

Brian Berry has been director of external affairs at the FMB since May 2007. He is responsible for UK and EU policy, public affairs and media relations.

Brian was previously head of UK public policy at the Royal Institution of Chartered Surveyors (Rics), where he was seconded to Brussels to set up the Rics European Policy Unit.

Born and educated in Devon, he has two degrees in History and European policy, and though starting his career as a teacher, he is now regarded as an expert on construction matters, which more recently saw him interviewed by BBC News 24. He was made a Freeman of the City of London in 1989.

Aboutproperty interviewed Brian for his views at this difficult time for the construction industry.

aboutproperty: What would the FMB like to see the government doing for the construction industry in the current economic climate?

Brian: With an expected 300,000 construction jobs expected to go in the construction sector over the course of the recession the government needs to be doing more to help the construction sector. The FMB, as part of a broader coalition called 'Get Britain Building' including the Builders Merchants Federation, the Modern Masonry Alliance and British Precast, is calling on the government to adopt its ten point manifesto which includes:

1. Ensure responsible lending to prudent borrowers coupled with the reintroduction of mortgage interest tax relief

2. Cut VAT from 17.5 per cent (15 per cent for the next 13 months) to five per cent for all building repair and maintenance work

3. Develop and implement a coherent strategy to deal with the UK's existing housing stock both in terms of helping to create more homes and making the UK's existing stock more energy efficient

4. Set targets for all local authorities to fast track the planning process to release and designate land for social housing

5. Simplify the planning system

6. Produce an implementation plan to show the precise timings and location of public spending on schools, hospitals and prisons to ensure that projects are completed in 2009 and 2010 respectively

7. Introduce a section 106 agreement holiday and then subsequently cap the value of section 106 agreements. Abandon the proposed Community Infrastructure Levy

8. Reduce the regulatory and fiscal burden

9. Reform stamp duty so that only have higher rates of stamp duty apply to the proportion of the house price which is in the relevant band i.e. a graduated tax like income tax

10. Reintroduce empty property rate relief.

aboutproperty: How would you recommend small businesses stay afloat when the market is so poor?

Brian: Small businesses need to rethink their business plans and make sure they keep in contact with their bank about their future plans. Good business planning can go a long way to help a small business survive in a recession as it demonstrates they are thinking ahead and anticipating the market rather than merely reacting to it. Joining a trade association can also be very helpful for a small business wanting help in these difficult times.

aboutproperty: What are your views on government plans to increase council housing?

Brian: With house building at its lowest level since 1924 and nearly five million people waiting to get a council house now could not be a better time to build more council homes. However, it will be important that we don't repeat the mistakes of the past and create sink estates. We need to create communities, which means that new council homes must be of high quality and have access to good public transport and job opportunities. At the end of the day it's about people and understanding how we all live and work. That way we have a better chance of creating sustainable communities.

aboutproperty: The FMB recently announced that over half its members were making redundancies. What would you like to see the government doing about so many job losses in the industry?

Brian: It's very concerning that over half our members are expecting to make redundancies over the first three months of 2009. What we need the government to do is to take up the Get Britain Building 10 Point Manifesto and cut VAT on repair and maintenance work to five per cent, set out a clear strategy to refurbish the UK's existing housing stock which is worth at least £3.5 billion every year, and get the banks to start lending again to small businesses.

aboutproperty: You were recently interviewed on the BBC about the workers' strikes, what needs to be done to improve conditions for construction workers?

Brian: The key thing in the current market is how best to protect construction jobs and this was one, if not the main, concern of those striking recently across the UK. Construction workers are understandably worried about losing their jobs in what is the worst recession since 1980. The government has been handing out billions of pounds to the banks and car manufacturers but has done little to reassure the two million who are employed in the construction sector. A financial bailout is not required but a commitment to address the Get Britain Building manifesto would do much to help the construction industry pull through the recession.

aboutproperty: What opportunities can apprenticeships bring to employers and employees?

Brian: The construction industry needs to grow its supply of skilled workers in order to ensure that we arrest the predicted skill shortages which will impact on our ability to operate after the recession. The best way for firms to avoid skills shortages is to ensure they continue to train apprentices and qualify the existing work force. There are many reasons why employers should support an apprenticeship not least because today's apprentice is tomorrow's skilled worker. In addition apprentices provide higher overall productivity and can be trained in the way that employers want them to work. Grant schemes are available to employers to make apprentices affordable.

aboutproperty: What concerns are being raised to the FMB from their members at the moment?

Brian: FMB members are angry and concerned about how the banks have stopped lending to small businesses. Cash flows for small companies are usually very tight at the best of times so when a bank calls in an overdraft facility the consequences can be disastrous. Late payment is another issue as well as the on-going problems of having to keep up with increasing legislative changes which have a disproportionate impact on small businesses; something the government has yet to fully appreciate.

aboutproperty: What is the outlook for 2009 with regards to British construction?

Brian: This year is going to be very tough for the construction industry. We know already that eight construction firms are going bust every day! However, construction is at the heart of everything we do so it is very important the government starts to listen to us and understand that its economic, environmental and social policies depends on having a healthy construction industry. One benefit of the recession may be that we start to realize that our country's economic well-being cannot simply rely on the financial sector but on the things we create. If this lesson has be learnt by the politicians the construction sector can hope for a better future.

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