The government has a mandate to change an industry bogged down in the same issues as last year – but don’t expect many to be solved straight away
With the government only weeks into its tenure and the administration’s influence so potentially pivotal for all our fortunes, it is perhaps a fool’s errand to try to predict the future for our industry in 2020. But here goes anyway…
This time last year I predicted the 2019 headline-grabbers would be Brexit, infrastructure, HS2, contractor bankruptcy and housing. I am already getting a Groundhog-Day kind of feeling for this year.
One benefit of a prime minister who some say has no belief system or moral compass, and a working majority, is he may not feel so indebted to hardline Brexit zealots in his own ranks
On Brexit in 2019, I said: “Nobody except a select number of zealots or attention seekers really thinks a no-deal Brexit outcome works […] I do not think we will head down that route, but anything is possible.” Now we have the election result, during 2020 I see talks about talks taking place over Brexit, with the chance of actually “getting it done” within 12 months being as likely as Southampton winning the Premier League. For the sake of my sanity alone, I would like to believe it could happen, but know that it’s not likely.
The only caveat I would venture is that, ironically, one benefit of having a prime minister who some say has no belief system or moral compass, and a working majority, is that he may not feel so indebted to the hardline Brexit zealots in his own ranks – hence we may eventually get a Brexit deal of sorts. We can only hope.
For infrastructure last year, I predicted “a great deal more scrutiny by the National Audit Office on these projects, with HS2 and Crossrail particularly being put under the spotlight. The government will be looking for firmer cost controls.” Debates over the whole future of HS2 resurfaced when Boris Johnson assumed the premiership last summer, although it is rumoured to have been put through, and Crossrail was still in the headlines for overruns at the end of the year.
However, for 2020 and beyond, a great deal of infrastructure spending has been promised – and it is unlikely the new government will renege on all its election pledges to invest in roads, rail, hospitals and schools. That said, with a workable majority, who will challenge this government if it does not deliver on its manifesto pledges?
For contractors 12 months ago, I stated: “There is no way that firms whose accounts fail to be signed off by over-cautious auditors will be supported by the banks, who will become more risk-averse.” Insolvency service figures released last month showed that 343 housebuilders sadly went bust in the year to September, up by 26% on the figure for 2018 and a rise of more than two-thirds on just four years ago – and housebuilding was supposed to be one of the more resilient sectors. This does not bode well for the fortunes of the wider industry, and I see banks being even less sympathetic as many face their own challenges when some say we have been on the brink of recession for some time.
On the wider topic of housing provision, I thought the government would surely abandon its fantasy building target of 300,000 homes per year. It has, but to 1 million dwellings over the next five years – still a hefty 200,000 a year. All parties appeared to weaponise housing numbers during the election campaign – foolish when such predictions are based on political expediency rather than a supply-and-demand rationale. We don’t need any old new homes. We need the right homes, in the right place at the right price with appropriate infrastructure support. But I suppose that is not a terribly pithy soundbite.
In 2020, if the government really wants us to build for Britain, then I hope it will wake up to the challenges faced by councils in processing, managing and supervising projects through planning approval systems. Planning departments, building control resources and in-house legal teams have been decimated by 10 years of cuts, and arguably the Grenfell disaster shows what happens when you have “light-touch” supervision. It may be that we also see a root-and-branch review of the controversial permitted development rights model.
We have a new government to greet this new year. Let us hope some of the mistakes made in the past 10 years are not repeated and that future commentators will look back on this time as the roaring 20s – not the dismal decade.
Richard Steer is chairman of Gleeds Worldwide