Britain's construction industry faces "inexorable decline"
unless radical steps are taken to address its longstanding
problems, according to an independent review commissioned by two
The Farmer Review of the UK Construction Labour
Model highlights construction's dysfunctional training
model, its lack of innovation and collaboration as well as its
non-existent research and development (R&D) culture.
The report says low productivity continues to hamper the sector,
while recent high levels of cost inflation, driven by a shortage of
workers, has stalled numerous housing schemes as they have become
too expensive to build.
Led by Mark Farmer, chief executive of Cast, a real estate and
construction consultancy, the hard-hitting report says we need to
better align the needs of construction firms and the businesses who
"If you buy a new car, you expect it to have been built in a
factory to exacting standards, to be delivered on time, to an
agreed price and to a predetermined quality. This needs to happen
more in construction, so that the investors, developers or building
owners hiring construction firms increasingly dictate the use of
modern methods of delivery and invest appropriately in the skills
agenda to grow this part of the industry. There are more
similarities between manufacturing and construction than many
people are led to believe and this perception needs to change,
starting in the housing market."
One recommendation set out for the medium term is a "carrier bag
charge" style behavioural deterrent scheme. This would levy a tax
on businesses who buy construction work in a way that doesn't
support industry innovation or skills development. Clients could
face paying a suggested levy equal to 0.5 percent of a scheme's
construction cost but would have the ability to avoid paying this
tax completely by commissioning construction in a more responsible
Farmer, a 25-year veteran of the industry, and former partner at
EC Harris, said the industry needs to be far more joined-up with
its clients in how it approaches R&D and skills. He also wants
ministers to directly intervene in certain areas to ensure many of
the issues identified are rectified.
Commissioned by the Department for Communities and Local
Government and Department for Business, Energy and Industrial
Strategy, the Report makes ten recommendations which include:
- using the residential development sector as a pilot programme
to drive forward the large scale use of pre-manufactured
construction, for example, through off-site built or modular
- a wholesale reform of the current Construction Industry
Training Board (CITB) and its related levy system, including a new
mandate to properly fund and drive forward both appropriate skills
development and innovation to suit a modern progressive
- government to use its education, fiscal, housing and planning
policy measures to initiate change and create the right conditions
that will support the construction sector's modernisation.
With more people leaving the industry each year than joining,
the report identifies that the construction workforce is shrinking,
placing increasingly severe constraints on its capacity to build
housing and infrastructure. Reliance on a fractured supply chain
and self-employment also means there is little incentive for
contractors to invest in long term training for the labour
The situation is exacerbated by the fact that many school
leavers and graduates don't view construction as an attractive
career choice. A YouGov poll earlier this year found that
two-thirds of Britons wouldn't consider a career in
The report claims that if Brexit results in reduced migrant
labour, the situation could be made even worse.
Crucially, the construction industry hasn't raised its
productivity in decades so it urgently needs to explore ways to
make the work less labour intensive, such as through offsite
construction. This, in turn, could make a career in the sector more
attractive for young people by moving the work from building sites
to digitally enabled working in factories.
John Bibby ARCH CEO comments: "The findings of this report
underpin the fact that the government's ambition of increasing
housing supply and delivering a million new homes by the end of
this Parliament is unlikely to be delivered without intervention
from the government.
"Councils are willing to assist in driving change in the
construction industry and commitment to delivery of a significant
social rented housing programme, commissioned using modern methods
of construction would help modernise the industry".
ARCH would be interested to hear from members who have or are
using non-traditional methods of construction to deliver their
social housing programmes. Please email: firstname.lastname@example.org.