Hammond must focus on modular housing – not brickies – or we risk making skills crisis worse, warns Government advisor Mark Farmer

The chancellor must put more energy into encouraging offsite manufacturing, building homes in factories to alleviate the skills crisis, a leading Government construction advisor has warned.

In last year’s government-commissioned Farmer Review, its author Mark Farmer warned the construction sector needed to “modernise or die”. Ahead of the Budget, he has warned that there is no magic tree of skills – and that current measures risk cannibalising the workforce without solving any of the structural problems.

Mark Farmer, chief executive of Cast, a property consultancy and author of the Farmer Review, said:

“Incentivising SMEs will have the benefit of opening up more smaller lot size housing development sites that volume housebuilders (VHBs) aren’t attracted by. But this fundamentally misses the point that the SMEs and VHBs tap the same finite labour force – the same brickies and sparkies have just moved from small sites to big sites over last 10 years.

“Small builders are in fact small developers – there is no magic untapped pool of construction resource sitting there idle because it can’t get a site, a planning consent or a loan to build a few houses on a small plot. You will therefore cannibalise the workforce that currently delivers most new homes in the UK, which will also stoke further build cost inflation on labour rates and the current deterioration in build quality will continue.

“Officials at the Treasury need to get their heads around this and put concrete measures in place to create truly additional capacity – not simply ‘move deck chairs around on the Titanic’. The only way of doing this, which allows more output delivered at a better quality at a cheaper price, is to change the way we build homes.

“The more demand you create, the cheaper it will get, and digitally assured processes will create a host of exciting new career opportunities for youngsters and retraining options for existing workers. When you combine this with using the SME sector, you get really interesting opportunities around high quality custom build like in Germany.”

Farmer added:

“If the government is serious about direct commissioning the supply chain – and about getting more affordable homes built – this is the construction delivery market it needs to stimulate through fiscal, land and planning policies and its direct customer leverage. Leave the traditional brickies and chippies to build for the VHBs.”

The Farmer Review was well received by both the government and the private sector, as well as cited in February’s Housing White Paper and the Industrial Strategy Green Paper. Mark Farmer is continuing to work closely with the government on their housing, construction and skills agenda.

You can download a copy of the Mark’s review, ‘Modernise or Die: Time to decide the industry’s future’, here.

Coverage of the Farmer Review: