Just prior to Chancellor of the Exchequer Philip Hammond stepping forward with his budget today many in the media have picked up on building companies owned by the Chancellor expressing concern going forward. While there is nothing wrong with MPs having an interest in businesses these two are connected with the property industry and their comments are a little embarrassing. So, what do the Chancellor owned building companies have to say about the future?
The care home industry has become something of a controversial issue of late amid concerns about budget cuts and affordable services. Even Philip Hammond privately owned care home builder Castlemead has concerns which were revealed in a recent financial filing. The company is not necessarily concerned, as yet, about budget cuts but more about “supply bottlenecks, particularly of skilled tradespeople, driving up costs”. This will not be a surprise to those operating in the industry because a lack of skilled/suitable tradespeople has been a problem for some time.
This must be a similar pattern right across the industry as another construction company owned by Philip Hammond, Chiswell (Moorgate), has also highlighted the issue of “good quality and committed subcontractors”. This comes at a time when the UK government is under pressure to invest in the economy and try to soften the blow as much as possible when Brexit finally kicks in. It is all good and well putting in place additional funding for the building industry but there does need to be greater emphasis on skilled labour.
The elephant in the room
It was interesting to see that while these two companies controlled by Philip Hammond have expressed concern about a lack of skilled labour, neither of them mentioned Brexit. There is no doubt that Brexit is a major issue for all businesses up and down the UK and in particular the property market – in this instance the care home industry and construction. There are serious concerns that cutting off an affordable workforce from Europe will put pressure on many UK businesses and at best push-up the cost of employment.
Some may suggest that taking the focus away from Brexit is sensible in the short to medium term while others would rather face these issues head-on. One interesting fact which reflects the whole problem is the statistic that 12% of the UK construction industry is deemed “foreign”, a figure which rises to one in four in London.
While Brexit is taking all headlines at the moment we can only hope that the UK government does not forget the property industry and the requirement for skilled labour. We have seen talk in recent years of more apprenticeships than ever before but so far this is not showing through in the construction sector. There is no point ploughing millions and millions of pounds into the new build industry if there are insufficient skilled tradespeople to complete the job as quickly and efficiently as possible.
Today’s budget is likely to be a rather dour affair with maybe the odd surprise giveaway to keep the voters happy. The main focus now has to be on Brexit, with the triggering of Article 50 towards the end of this month, and protecting the UK economy going forward.