Strong and stable construction?

"Has the Conservative government been good for the construction industry?" We asked this question a few days after the election was called and ahead of any of the major parties publishing their manifestos.

Gavin Tadman Joint MD

Gavin Tadman10.05.2017

Interestingly, the last significant poll in this area was in August 2013, with the Construction News Barometer showing that 57% of those surveyed believing a Labour government would spend more on infrastructure than the then coalition government, and all but 4% of those surveyed believing the government of the time needed to do more to boost construction growth (perhaps somethings never change).

This 2013 survey questioned chief executives, chairmen and senior directors of the top 100 contractors in the UK. Their view on which party was best for the construction industry was, at the time, very close: with 47% saying the Conservatives, ahead of 43% for Labour.

However, this time around, we asked our clients and industry partners specifically "Has the Conservative government been good for the construction industry?"

Our results were as follows:

  1. Yes 50%
  2. No 41.7%
  3. Don't know 8.3%

With half those responding saying that that the government has done a good job, we need to measure it by looking back to the time of the last election. The 2015 Conservative Party Manifesto stated aims, for housing were to:

  • Build 200,000 new Starter Homes – 20% below the market price, for first-time buyers under 40.
  • Deliver 275,000 additional affordable homes by 2020.
  • Aim at least to double the number of custom-built and self-built homes by 2020, and take forward a new Right to Build requiring councils to allocate land to local people to build or commission their own home.

Looking back with a month to go before the next election and assessing this pledge, it does seem that, although we have had only 2 years to judge on and with all the attention being taken by Brexit, the government did deliver on a number of pledges early in the start of their term.

The communities minister Greg Clark managed to push through a Housing Bill in 2016 after securing a deal with the National Housing Federation on the manifesto pledge to extend the option of Right to Buy to housing association homes.

Then, the Housing White Paper in February did for the Starter Homes drive. This was dropped with a whisper in favour of other schemes.

To defend this government, I think there is always a white paper, for whichever government, which seems to eschew the manifesto pledge and never quite deliver. Or am I just showing my age?

In terms of delivery, the latest figures on the target of one million homes by 2020 figure show that planning permissions rose to their highest level in a decade in 2016 – 293,127 last year.
However, this target was set for 2020. Will this be re-instated in the new manifesto, or again quietly dropped?

It does seem that the 2015 manifesto may have been published too quickly by David Cameron, without any cross checks or any real scrutiny and was designed to secure votes. Surely our industry is too important to be sketched out on the back of a fag packet in a rush to hit the print deadline of the new manifesto?

Or looking at it another way, it might be easier to answer the question of how effective the government has been in delivering a housing programme by asking ‘Can you name the Housing Minister?' Go on. I'll give you a clue: - I share the same first name. Still haven't got it? Keep reading until the end.*

However, I recognise that the Construction Industry is more than the requirement to build housing.
We need to focus on the areas, outside the private sector that the government can directly fund, or influence, so we should also consider, roads, rail, energy and infrastructure.

Looking at the most up to date data, you would be cruel hearted not to acknowledge that the government has done a good job. Up until the beginning of May, it shows that growth in the construction industry accelerated to a four-month high in April.

The Markit/CIPS UK Construction Purchasing Managers' Index (PMI) rose to 53.1 from 52.2 in March, with civil engineering growing at its fastest pace in just over a year and growth in house-building hitting a four-month high.

Although the overall figures show that the economy is showing signs of slowing since January, with inflation beginning to bite consumers, this week's release showed construction companies took on workers at the fastest rate since May last year. This is to help cope with an influx of new orders, while cost pressures on firms eased further, after hitting six-year highs earlier in 2017.

So what message do we need to send Theresa May, before she sits down to lay out her manifesto for the construction industry? Well done, carry on as usual? Or, must try harder? Or should we trust that another more inspiring, radical, visionary manifesto will flow forth from the opposition parties?

At this point, a cynic might add that the Labour party could promise us anything, and they won't have to deliver as Jeremy Corbyn's main job is to fight off the onslaught of personality politics from Theresa May. The Liberal Democrats are all about convincing Remainers to vote for them, so will construction be completely absent from their pledge?

How prominently will construction feature in the upcoming manifestos? and will anyone be scrutinising them? Seems more than a shame or an opportunity missed, as a post-Brexit economy will rely on construction. So, do we really need to trust the Conservatives to deliver what they say?

In the end, do we care? Can we influence them? Or do we get the government we, and the country, deserve?

* For those that didn't know, the Housing Minister (at the time of writing) is Gavin Barwell.

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