Housebuilders voice fears over standard of new homes after Brexit uncertainty sees construction firms lay off staff

New reliance on sub-contractors could lead to 'reputation-damaging mistakes', industry leaders warn

Benjamin Kentish
Political Correspondent
Wednesday 31 July 2019 09:20 BST
The government must 'step in' if homes are going to get built, Theresa May says, committing £44bn to supporting the housing market

The standard of new homes being built in the UK risks deteriorating because of fears over Brexit, housebuilders have warned.

Builders said they were laying off staff and instead increasingly relying on sub-contractors because of "years of Brexit uncertainty" and fears of a no-deal departure from the EU.

Contractors are less likely to "build to the right standard" and relying on them could lead to "reputation-damaging mistakes", an industry body warned.

A survey by the Federation of Master Builders, which represents small- and medium-sized construction companies, found that firms were increasingly reluctant to directly employee workers because of the risks of "economic shock-waves" if the UK leaves the EU this year.

It revealed a drop in employment among FMB members for the first time in over five years, with 21 per cent of companies saying they had laid off staff since the previous quarter.

This came despite the sector reporting an increased workload, with 27 per cent of companies saying they had more business in the second quarter of 2019 than in the previous quarter.

The survey also found that housebuilders were encountering problems in recruiting skilled workers, with 60 per cent saying they were struggling to hire bricklayers and 54 per cent finding it difficult to employ carpenters and joiners.

Employers have repeatedly raised fears about how they will fill skills gaps when freedom of movement ends after Brexit, given that many skilled workers, particularly in the construction industry, currently come from EU countries.

Brian Berry, chief executive of the FMB, said: “Years of Brexit uncertainty have resulted in construction bosses starting to change how they employ their workforce. To ensure their firms are ready for any economic shock-waves later this year, employers are reducing their number of direct employees and relying more on sub-contractors who are easier to shed if work dries up.

"The construction industry has always used a significant proportion of 'subbies' but the fact that direct employment is decreasing, points to Brexit nerves among construction bosses. This is the reality on the ground of what happens when years of uncertainty are inflicted on the construction industry. Furthermore, apprenticeship training has taken a hit as construction bosses are reluctant to take on young people when they can’t be sure of future projects going ahead.”

He added: “Worse still, the fear is that using more 'subbies' can lead to a drop in the quality of our builds. Direct employees, who are well-known to their firm, are much more likely to follow the ethos of their company and build to the right standard.

"If construction bosses are trying to protect their businesses by employing more 'subbies', they might not always know how good these 'subbies' are. Rebalancing the workforce may seem like a good idea at the time, but it could lead to reputation-damaging mistakes. If a downturn is on the horizon, reputation is everything and construction employers can scrutinise the quality of their workforce far more easily when they’re on the books.”

Labour said the finding was evidence of businesses' fears over Boris Johnson's Brexit policy.

John Healey, the shadow housing secretary, said: “This report shows the Tories’ Brexit failure is taking its toll on construction, with builders fearing Boris Johnson’s ‘economic shock-waves’. This is more evidence of the housing crisis that Tory Ministers are failing to fix.

“After nine years of failure on housing, housebuilding is still lower than under Labour, fewer young people own their own home than in 2010 and the number of new social rented homes built has fallen by 80 per cent.

“The deep cutbacks in government investment for new affordable homes have failed and the Conservatives should now back Labour’s plans to build a million new genuinely affordable homes, including the biggest council housebuilding programme in more than thirty years."

A government spokesperson said: “As we prepare to leave the EU we are committed to enabling our construction sector to attract further investment and continue to grow.

“We will continue to extensively engage with businesses, including the construction sector, in the run-up to exit day to ensure they are prepared to maximise the opportunities of Brexit.”

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