Housing is now recognised as one of the small handful of public policy issues that is absolutely essential for the government - and broader
society - to solve. But this is just the start…
One senses that the energy and commitment to tackle housing issues is increasing, not just in the media but across political and industry forums. The general election in May had something to do with this, as housing came front and centre on a number of occasions. Subsequently, the government committed in the Queen’s Speech to bring forward a Housing Bill later this year, and the government’s Productivity Plan published in July explicitly argued that housing is a critical issue for the economy. This prominence is to be welcomed.
But it is also appropriate to emphasise that we have a long way to go. We’ve had a range of good news/bad news announcements over recent weeks, with government statistics showing that completions are up but starts are down. Housing minister Brandon Lewis announced in August that there were more than 131,000 completions in the previous 12 months, representing a 15% growth, the highest level since June 2009. The general consensus is that the UK needs to be building as many as 250,000 new homes every year to catch up with demand. Let’s be clear: this is a massive challenge.
Nowhere is the current housing squeeze more acute than in London. Given that housing has already become an important topic in the mayor’s race, the prominence of housing issues is sure to rise further over the coming months. Earlier this year, speaking on the announcement of a London Housing Commission set up by the think tank IPPR, Lord (Bob) Kerslake suggested that London is building “less than half of the homes it needs to sustain its growing population”.
Significantly, there are substantial economic impacts: “London is being held back and London’s competitiveness as the most successful global city is under threat,” Lord Kerslake said. “There are also major knock-on impacts on the rest of Britain’s economy and a distorting effect on other housing markets outside the capital.”
Not only do we need a breadth of co-operation, we need commitment over a long period of time - a skilled workforce can’t be developed overnight. That means investment, not just incentives
Given the scale of the challenge and the high economic stakes, we are wise to keep the bigger picture in mind. I was glad to see housing issues featuring prominently in the cross-departmental Productivity Plan (even borrowing a construction metaphor for its title, Fixing the Foundations), and I hope that chancellor George Osborne maintains a strong, visible role in ensuring a joined-up approach to housing.
Matthew Taylor, chief executive of the Royal Society for Arts, recently claimed in the Observer that housing is “the nation’s most urgent and complex challenge” and urged readers to acknowledge it as a “crisis”.
He suggested furthermore that housing is “a wicked problem” that requires a joined-up effort, led from the highest levels in government, that raises the strategy above existing fiefdoms and narrow solutions designed to solve just individual parts of the problem. In fact, it’s bigger even than that. It’s not just about
involving all government departments and organisations with a direct interest in housing and construction; it’s about engaging the broader public. That’s one of the reasons why mainstream media attention is so important.
I agree that we can’t crack this nut with a piecemeal approach. But no matter how many incentives to build are created or planning hurdles removed, we can’t make wholesale progress towards the goal of 250,000 new homes every year if we don’thave the skilled people to build them.
It’s well known that we have to do a better job of attracting young people into the construction industry. Worryingly, the Local Government Association recently reported that the number of completed apprenticeships in construction is down by nearly 60% since 2009. And of course we are facing some uncertainty following the government’s announcement of a new apprenticeships levy, as at the moment it is not clear how this will affect the construction industry’s own system, run by the Construction Industry Training Board.
We also need to do a better job of gathering data on where the skills shortages lie (taking into consideration the substantive regional differences) and working with local governments and further education providers to steer young people towards those fields in greatest demand.
So addressing the construction skills gap requires a number of key stakeholders coming together in partnership - local and central government, training providers, the private sector and its trade associations, and others. And not only do we need that sort of breadth of co-operation, but we need commitment over a long period of time - a skilled workforce can’t be developed overnight. That means investment in building capacity by all stakeholders, not just incentives, and I hope that the government continues to exercise leadership at the highest levels.
Without wanting to be unnecessarily dramatic about it, I agree with Matthew Taylor that to admit that housing is at “crisis” stage - requiring the attention of more than just a small cadre of specialist stakeholders - is a valuable start.
James Wates is chairman of Wates, the CITB and Build UK