Challenges and Opportunities of Brexit for Construction Industry

Paul McFadyen is the Managing Director of metals4U, in this latest feature for UK Construction Online, he writes about the challenges and opportunities Brexit will bring to the construction industry.

In a matter of months, Britain will face major changes to many aspects of society as the Brexit deadline passes and the UK officially leaves the European Union. Without a doubt the country faces challenges due to these changes, but opportunities will also present themselves.

The construction industry is no different from the rest of the nation in this regard. Whilst it faces obstacles in the form of disruption to supply chains and possible manpower shortages due to the ending of freedom of movement, changes to regulations and legislation could provide huge opportunities.

One such example is housing. It was with much anticipation that the construction industry waited to find out exactly what was included in the new planning laws of July 2020. The changes announced by Robert Jenrick, the Housing Secretary, are focussed on speeding up the processes that supply new homes to the market, and helping breathe new life into town centres across England to meet rising private, domestic, and commercial property needs.

The changes are intended to fast track and streamline the planning application process to allow businesses and domestic housing to expand without the need to relocate. The intention is to reduce the need for building on greenbelt land surrounding towns and villages while keeping economic communities strong and viable, helping retain jobs, and provide continuity for the local workforce, businesses, and communities.

Full planning applications will no longer be required to demolish unused buildings before rebuilding; these buildings can now be repurposed into housing, retail, or commercial concerns, with less bureaucracy, to bring new revenue quickly into the heart of towns and cities.

Homeowners can also add up to two storeys to their existing homes to help transition the changing face of family life- this will be especially helpful to growing families and to help provide support and familiar surroundings for our aging population.

Updating the planning permission system is well overdue; for years the construction industry has bemoaned the red tape that created a sticking point in terms of time, and finance, to get construction projects off the ground.

The new system has attracted large investment from Westminster; £12 billion has been injected into the government’s affordable home programme, this is projected to underpin the building of 180,000 new homes. The government have also pledged to boost the Home Building Fund with £450 million to help give access to financial support to small developers- in real terms this is expected to assist the building of 7,200 new homes, and a further £400 million has been assigned to support the building of around 24,000 new homes through the Brownfield Land Fund to target housing provision in city areas such as Liverpool, Manchester, Tyne and Tees Valley, Sheffield, and the larger areas of West Yorkshire and the West Midlands.

This amount of financial commitment to the construction industry will definitely help safeguard the security of the industry, construction worker, and associated services and suppliers throughout the Brexit period and beyond.

Access to products and services post-Brexit are a major factor in the future planning and security of construction. Details of how the UK will do business with the EU and Global markets are beginning to emerge, however, Covid-19 is also heavily affecting the sourcing of raw materials, construction materials, and labour; it is the major contributing factor to the recession the UK is now facing.

The best way to grow the construction industry through these trying times is to invest within our shores as highly as possible. By utilising the skills and products already held, or manufactured, within the UK we can support the UK economy while making a real difference at a grass roots level to the livelihoods of all the sectors and services that make up, and contribute to, the construction industry supply chain.

We need to prioritise UK based materials manufacturers and suppliers, utilise the skills and talents of UK based architects, surveyors, tradespeople, project managers, and the entire collective of workers that are instrumental in the success of all construction projects.

The UK construction industry currently relies heavily on migrant workers from other EU countries and the end of the free movement of labour post-Brexit will lead to a skills shortage in some areas. The Construction Industry Training Board, (a public body sponsored by the Department for Education) has recently published its Strategic Plan for 2021-2025; this focusses heavily on how the department is investing in training support for the construction industry to increase the opportunities and outcomes for trainees and existing workers. Although this will not necessarily solve the problems in the short term, it offers hope for the longer-term success of building a skilled and innovative workforce post-Brexit.

Much of the investment for larger infrastructure construction projects currently comes from the European Investment Fund and the European Investment Bank- this funding will end when we exit the EU, at this present time it is unknown if the revenue the UK will save in EU membership fees will adequately plug this €7.8bn deficit, an educated guess would suggest not.

There is no doubt that the construction industry will suffer in the wake of our exit from the EU, however, with a forward-facing positive attitude, a commitment to investing in UK based suppliers and services from within the industry, the pledge of government investment, and an update to planning law to remove some red tape, the future success of construction in the UK has much promise of a brighter tomorrow.

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