Government issues response to Farmer Review

The government has issued its response to Mark Farmer’s Modernise or Die: The Farmer review of the UK construction labour model but has stopped short of introducing its controversial recommendation to implement a client charge for those firms who fail to invest in skills and innovation.

In February 2016, Cast CEO, Mark Farmer, was commissioned by the Construction Leadership Council, at the request of the ministers for Housing & Planning & Skills, to undertake an independent review of the UK’s construction labour model. It looked in particular at the skills pressures and other constraints that limit housebuilding and infrastructure development in the UK.

The resulting report called for radical steps to be taken to address the sector’s longstanding problems.

In its response, the Department for Business, Energy, & Industrial Strategy (BEIS) has backed most of Mr Farmer’s  ten recommendations but was reluctant to support the call to charge those companies  who fail to voluntarily adopt the changes required.

Construction firms would be able to avoid paying the 0.5% charge of construction costs by ‘demonstrating how they are contributing to industry capacity building and modernisation by directly or indirectly supporting skills development, pre-manufacturing facilities, or other forms of innovation and R&D.’

BEIS said it supported the Report’s call to reform the CITB after admitting there were concerns from within the construction industry about its “effectiveness, efficiency and responsiveness”.

Last week  Apprenticeship and Skills Minister Anne Milton wrote to CITB Chairman, James Wates, to inform him of the government’s decision to allow the organisation to continue hold levy-raising powers.

In its response to this proposal, the government stated: “the introduction of a client charge to encourage and fund modernisation could risk damaging developer confidence and increasing costs, at least in the short term.”

It said its focus would instead be on implementing other measures and supporting steps the industry could introduce following the Farmer Review.

Mr Farmer indicarted he was happy the government was supportive of his findings. He commented: “I recognise that driving industry change is a long haul, but with a supportive government, both acting as an intelligent public client and in terms of setting wider policy, this can only help realise my vision of a modern and fit-for-purpose construction industry.

“ I also feel that industry itself is becoming increasingly aware of the unprecedented challenges it now faces and I believe this ‘burning platform’ is starting to accelerate its own thinking in how it embraces modernisation, albeit this also needs to be supported by the clients that the industry serves.”

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