It’s all very well trying to kickstart our moribund economy by chucking money at the public sector, but what about the poor blighters who don’t work in it?
A wise investor once said: “Always invest in a company that an idiot can run, because as sure as eggs are eggs one day an idiot will.” Now I wonder if this applies to governments as well. Essentially the UK is one large going concern, a UK plc if you like. Do we have the right people running UK plc? Do we need a change of management to get us back on the road to recovery?
At the moment the commercial sector or private sector of the construction industry is rapidly running out of work – not all of us have the privilege of working in the public sector. It seems not a day goes by without another prospective job being put on hold due to the current economic climate. This hasn’t happened gradually; it’s like the work has fallen off a cliff.
As specialists we have to focus on certain sectors and ours happens to be, along with our clients, the commercial or private sector. The government is pouring money into public sector schemes such as schools, hospitals and the like. This is wonderful for parts of our industry, but what about us? This does not help our company, our staff or our clients.
To make matters worse, as a subcontractor, we have encountered situations where some of the contracts we are working on are on the go slow. Project managers are looking out of their windows over the skyline, once filled with cranes, and wondering where their next job is going to come from.
It is an unfortunate reality that although it is in the main contractor’s interest to finish the project as quickly as possible, this conflicts with the personal interest of site personnel.
This naturally impacts on our effectiveness and costs. We have stone that is being manufactured continually with the objective that it gets delivered on time and on programme. In many cases projects are being delayed and the stone is being kept in off-site storage until required on site. This has resulted in knock-on costs because of the double handling, storage and additional transportation required. We are, in some cases, compensated for this additional cost but double handling costs everybody money no matter what you do.
Project managers are looking out of their windows over the skyline, once filled with cranes, and wondering where their next job is going to come from
Our market has been a large employer and tax generator for the government. They say we have to get the economy kickstarted again, but pouring money into the public sector is only part of the solution. We need more imagination. Tax breaks and incentives need to be created in order for all areas of our industry to get back into shape.
We need to encourage tenants in older buildings to move to new unoccupied space. Incentives such as business rates holidays and a reduction in capital gains tax on buildings older than 20 years would be a good start.
Granted, this is a very simplified way of looking at it but the basic idea is to create activity and encourage occupants to upgrade their accommodation, allowing the construction industry to regenerate and refurbish the older stock.
Additionally, the entire planning process needs to be revised and streamlined. Planners have created bottlenecks through indecision and outrageous section 106 demands that dramatically undermine the viability of major schemes that would otherwise be providing employment for thousands and help with economic recovery. We have recently lost a large contract due to planning issues that in my opinion were short-sighted, especially in the current climate. A common-sense approach to planning is required.
With all the governments of the world talking about a co-ordinated approach to the worldwide recovery of all economies, let’s look a bit closer to home. Now is the time to incentivise growth by making the necessary changes. As Warren Buffett said: “The rear-view mirror is always cleaner than the windshield.” These are unprecedented times, but we need someone in the driving seat to steer us out of this recession and set us on the road to recovery.
Greg Verhoef is director of Szerelmey