RICS calls for funding for vital infrastructure and housing in the Autumn Budget

The Royal Institution of Chartered Surveyors (RICS) today calls on government to take urgent action to ensure the delivery of affordable homes, to fill funding gaps for vital infrastructure, and to boost skills to ensure the delivery of both, in the autumn statement.

When the Chancellor stands up to announce his Budget it will be in the midst of a world dominated by Brexit. Concern caused by leaving the EU is already affecting RICS professionals and the built environment, as evidenced in the data collected by RICS Market Surveys. The Chancellor needs to support core areas of the UK that are fundamental to our future success within the built environment. RICS believes there are three key areas the Chancellor can focus on to boost confidence in the country.

Commit to infrastructure investment

The UK’s fiscal policy of reduced public spending has meant areas of the UK have been dependent on European investment for the delivery of critical infrastructure. Business investment decisions, economic growth, jobs, productivity and life chance, are all dependent on inter-connected infrastructure sectors – especially road, rail and digital connectivity. The loss of those EU funding streams could act as a significant barrier to the Government’s plans for a deliverable industrial strategy and to rebalance the UK economy.

As such RICS calls on government to commit to introducing a dedicated Infrastructure Investment Bank, based on the model of the Green Investment Bank, to plug the gap created from a potential loss of the European Investment Bank (EIB). Potential loss of EIB funds for UK infrastructure could result in shovel ready energy and transport projects being stalled. Access to a dedicated bank will also crowd-in investment during a period of increased uncertainty and sentiment.

Boost the UK’s ‘broken’ housing market

The Government has accepted the need to get councils building again as part of the supply mix, but as the continuing housing crisis signals they need to go much further in aiding the delivery of this. Good housing is not just a right for individuals but an essential element to improve the UK’s economic performance and productivity.

By reclassifying Housing Associations as private bodies the Government has given them the freedom to borrow for building; this freedom of action should be extended to Local Authorities too. The £2bn worth of low-cost capital was a welcome lift for the sector, but the Government should now lift the Housing Borrowing Cap to support all councils not a select few. The last time the UK managed to build 250,000 homes a year was in 1978 – when councils built 44 per cent of all new homes1. The increased freedom given to councils to build through easier borrowing would enable them to contribute to the target set out in the Housing White Paper – which the Government itself said was to address the ‘broken’ sector.

Battle the Skills Gap

Professionals responding to the RICS Construction and Infrastructure Market Survey, Q3 2017, have reported that the intensification of labour shortages is biting once more with 62 per cent of contributors citing this as an impediment to growth. This contrasts with an average of 40 per cent when data collection first began in 2012. Within this, respondents to our survey are still seeing a lack of quantity surveyors (64 per cent) as well as other professionals (52 per cent), with 44 per cent seeing a shortage of workers within specific trades.

RICS figures also revealed earlier this year that the UK construction industry could lose more than 175,000 EU workers should we lose access to the single market. In addition, losing access to the pool of EU labor that exists in the continent puts greater pressure on the UK to develop home grown talent at scales it isn’t geared to do at present.

Therefore, RICS calls on the government to develop and communicate a credible plan to retain vital non-UK workers, and avoid the outflow of experience, with an immigration policy that addresses this issue. Government must recognise their importance to the UK’s ambitions or risk exacerbating the challenges we already face. RICS, working with its members and government are developing measures to address the shortfall, including attracting the next generation of construction workers, encouraging the right types of skills development pathways and improving productivity. However these are long-term solutions and, in the short term, we must have access to existing EU workers in the economy and, if possible, the extended pool of employment in Europe.

RICS also calls for the introduction of tax breaks and financial incentives to help firms increase skills in areas and industries of low productivity, to broaden workforce development programmes, and to help upskill the current workforce.

Education, training, ethical standards and continuous professional development are not only central to the excellence of the British workforce but essential to ensure we have infrastructure, housing, and growth we need in the future and to be able to export our skills to the rest of the world.