Construction to benefit from government Industrial Strategy

Published:  28 November, 2017

The government and the construction sector, through the Construction Leadership Council (CLC), have agreed a sector deal to transform the productivity of the sector benefiting the wider economy.

Information about the deal follows on from the announcement made in last week’s Autumn Budget about how the construction sector will receive £170 million of government investment (through the Industrial Strategy Challenge Fund) to support innovation and productivity improvement in the sector.

Responding to the UK government’s Industrial Strategy, which was unveiled on 27 November by Secretary of State for Business, Greg Clark, BMN hears from the Builders Merchants Federation (BMF) and the Construction Products Association (CPA).

John Newcomb, Chief Executive of the BMF, said: “The BMF is pleased to see the Industrial Strategy recognise and showcase the construction industry through the announcement of a Construction Sector Deal.

“We believe that people and skills are the single most important aspect for the success of the deal and indeed, the Industrial Strategy. The BMF has long argued for parity of esteem between academic education and vocational training and skills, and as a direct consequence of the start of the Apprenticeships’ Levy eight months ago, the BMF established its own Apprenticeship Training Agency to make it easier for builders’, plumbers’ and timber merchants to take on and support new apprentices.”

John added: “However, our members need to be free to use Levy payments to train apprentices in firms up or down the supply chain if we are to properly train the next generation of builders’ merchants, housebuilders and construction workers.

“The BMF believes the 10% that employers will be allowed to spend elsewhere from next April is too low, and we question whether payments will be confined to just one other employer - instead of multiple employers - who can benefit, especially SME builders and allied trades who are the customers of merchants.

“It should be remembered that industries like construction and housebuilding cannot function properly without a vibrant, resilient, and enduring supply chain that the BMF represents. We therefore urge the government to work with Britain’s builders’ merchants to ensure that we continue to deliver the building blocks needed for growth in order to meet the Industrial Strategy’s aims of boosting the economy, addressing low productivity, harnessing new technology, and improving incomes and living standards around the United Kingdom.”

Meanwhile, Dr Diana Montgomery, Chief Executive of the Construction Products Association, said: “The construction sector has great potential as a key enabler of UK economic growth, and given last week’s downgrade from the OBR for UK productivity, this takes on a greater urgency. The newly announced sector deal for construction will be crucial for the whole supply chain over the coming years, especially if we are to help government achieve its aims of building more homes and improving the UK’s infrastructure.

“In addition, given the risks around skills shortages and productivity weakness, we welcome the government’s much-needed boost to improve digitalisation and construction skills. Critical to the success of any sector deal is leadership within industry through the CLC to offer an effective contribution.”

Diana continued: “The manufacturing and distribution of construction products has an annual turnover of more than £55 billion, providing employment for 330,000 people across 22,000 companies. The CPA strongly encourages government to ensure manufacturers and distributors are invited to make a more significant contribution to the CLC, and that ultimately what has been announced is not harmed by the Brexit transition period and the UK’s post-Referendum deal once it has been finalised. As nearly 80% of construction products used in the UK are made in the UK, this long-term view will give our industry the reassurance to invest in our sector.”

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