Mark Farmer, CEO of Cast and the author of the ‘Farmer Review’, warned that unless serious inroads were made into improving skills and training, attracting new entrants in the workforce, and pioneering innovative technology in the construction sector, it would not be possible to achieve the government’s current housing targets.
“The government needs to undertake a radical overhaul of how we build homes, not just how many homes it targets to be built during its current parliamentary term,” said Farmer. “The success of such target-setting is completely dependent on creating more construction capacity by incentivising modernisation of the construction industry via intelligent land, planning and fiscal policy setting. The release of the Housing White Paper and the Industry Strategy Green Paper could be seminal moments.”
Giving evidence at the Communities & Local Government (CLG) Select Committee on the capacity of the housebuilding industry, Farmer told members that the capacity of the construction sector and the current skills gap were the biggest challenges facing the homebuilding industry.
Farmer said, “In terms of skills and capacity, we are not attracting the amount of young people into construction industry needed to maintain the workforce. This, in combination with an already shrinking workforce, and the potential of Brexit-related reductions in labour will further reduce the capacity of the construction industry.”
Faced with having to build more homes with less workers, Farmer called on the government to incentivise change and drive innovation saying that “we need to think long-term and apolitically about housing if we are going to get anywhere”.
“Modular or Pre-manufactured housing is a critical enabler to how we can modernise the construction industry, both improving productivity and also making the industry more attractive to new entrants,” Farmer said. “We need to be able to produce more with less human resources in the future, and moving construction processes closer to manufacturing is the game changer for the construction industry.”
When asked what government could do to improve the capacity of the homebuilding sector, Farmer emphasised the importance of government supporting a cyclical housing stock.
“Market enablement is a very important component of improving the capacity of the homebuilding industry,” Farmer said. “Volume house builders dominate the current market, which is not a healthy situation to be in when it comes to market stability. Tenure diversity is therefore key for providing stability to the market and pushing innovative technology.”
Farmer also referred to the importance of tenure diversity. “I see the privately-backed Build to Rent sector as a crucial part of increasing supply as speed with fresh capital, as well as pioneering disruptive technology,” he said. “For example, Essential Living’s Creekside Wharf development is using modular technology and is the first of its kind in the UK.”
Reiterating the recommendations of the recently published review into the construction sector, titled ‘Modernise or die: time to decide the industry’s future’, Farmer called for greater collaboration between industry and local authorities to provide stability to the market.
Farmer said, “The construction sector is very project-led but we need integrated communication amongst all actors in order to provide the scale needed. If local authorities talked to each other then there is a huge opportunity there. You don’t get innovation from a fragmented market.”