Interview with FMB

As the largest trade association in the UK construction industry, the Federation of Master Builders (FMB) are champions for continuous improvement in building standards.

The FMB acts as the voice of small construction; influencing policy makers to improve the regulatory environment for construction SMEs.

Designing Buildings Wiki sat down with FMB Chief Executive Brian Berry to discuss some of the wide-ranging issues facing the building industry today.

Brian Berry (BB):

There’s always a lot to do and it’s particularly challenging because anyone can be a builder in this country, it’s unregulated, there are no standard qualifications. Governments of both parties have said they don’t want to intervene, so it’s up to us to set our own standards and I think that’s a key role for the FMB. We are professionalising the building industry.

Since I’ve been here, I think we’ve done a lot of the groundwork internally but our challenge is to be recognised within the industry and government as being the bearer of the highest standards for those consumers looking for small builders. We need to communicate the value to them of using a Master Builder as opposed to any other builder.

BB:

Everyone was concerned at the time of the referendum about it being very negative for the economy, but we did a survey of our housebuilders and two-third’s of them said it was business as usual, very little impact.

I think that’s because the impact of Brexit hasn’t really been felt by the economy yet, there’s still a lot of consumer confidence. But we’re not naïve in thinking it will continue. The UK has yet to negotiate the exit details and depending on how these are framed they could have an impact on the economy. Hopefully, any negative impact would be short term.

Where there is growing concern is regarding labour, because of the growing skills crisis in this country. Over half of our members are saying it’s difficult to recruit trades like bricklayers and carpenters. They are worried that any restrictions on labour movement will impact on skills in the industry, which raises the question about needing to develop apprenticeships.

BB:

In terms of the White Paper, the planning department have been under-resourced for many years and our members are saying it’s got to the point where they would be willing to pay extra to speed up the planning process because they’re not getting their applications through in a sufficient amount of time.

So anything in the White Paper that tackles the resourcing of the planning department and helps speed up the planning process would be a great help.

BB:

Any cuts to government bodies are always concerning, particularly at a time when we have this ambitious target. We would be worried about what impact that would have in terms of delivery. I think housing should be seen as a major infrastructure priority, and the government should be talking it up a lot more.

As well, the Section 106 agreements, along with the Community and Infrastructure Levy, are a double-whammy of two taxes on development for the SME. So anything that simplifies developer contributions would be much appreciated.

BB:

There are the 3 main barriers to SME housebuilders. First, and key at the moment, is access to land. The local plans are okay for big strategic sites, but they don’t actually make sufficient provision for small sites. Therefore, local authorities have a key role to play in making sure that they are looking after windfall sites, looking at local plans and deciding to bring in smaller housebuilders. The government should be encouraging local authorities to go down that line.

The government has its brownfield register, which is very good, but there are a lot of tiny parcels of public sector land dotted around the country haven’t been registered. We almost need a register of those as well for small buildings to be developed on.

The finance issue is a major concern, particularly for small builders. In terms of banks, the pendulum has probably swung too far the other way; they were too liberal in their lending, now they are too cautious, we would argue. That’s led to the development of challenger banks like Aldermore for instance, who are filling that gap.

In terms of the skills issue, we need to refocus attention from getting people to university and to defining what an apprentice is and giving it real status. A lot of my members left school with no qualifications, but learnt a trade, set up their own business and have now earned a lot of money. I don’t think we’re getting the message across that if you’re entrepreneurial and work hard, the building industry can be really good for you.

BB:

I think there is still a time bomb ticking away. We know from a survey of our members that this year, trying to attract all the skilled trades has not worked. The Brexit result will add further pressure, so the need to address this is as great, if not greater, than when we published that report.

To be fair to the government they are looking at Trailblazers, where the employers set the standards for apprenticeships; we’re working on that, but we’re having problems defining what an apprenticeship is.

We believe it should be a ‘Level 3’ qualification, whereas others think it should be ‘Level 2’. We’re keen to have people trained up for a lifetime not just for a particular job, who don't leave the industry when we go into recession because there're no other jobs for them. We need to equip people so they are multi-skilled and can adapt to changing circumstances.

BB:

We think that’s a good idea. Local authorities have millions trapped that they can’t use, so if they want to lift the borrowing cap to build homes and tackle the acute housing crisis, let them do it.

The danger is that they use larger housebuilders as opposed to local small ones. Over the last 20 years the number of SME housebuilders has declined rapidly. We’re not an endangered species yet but we need to make sure that measures can be put in place to stop them being pushed out of the market.

BB:

Well, we argue that it should be brownfield first as much as possible but that does impose extra cost. There are the small parcels of land I mentioned earlier, all across the country, that if you were to develop then it would take the pressure off the Green Belt.

We say, don’t not build on the Green Belt, but it should be the last resort, look at all the other options first because it was set up to protect our countryside and provide green space. I don’t want to see the countryside built over, but the ‘green lobby’ make it sound sometimes like we’re building over every green field. We’re not, there’s only about 11% of the country that’s built on, so the debate is now quite polarised whereas it needs to become more sensible.

BB:

We were excited by the Green Deal. But how it was set up, it was almost doomed to fail, because of the high interest rates, the model where you had to go to a Green Deal provider. That was the problem because the consumer couldn’t go to their local builder, they had to go to a provider who would have their own supply chain. So it cut out the local builder which was absolutely crazy.

The government seems to have kicked it into the long grass now, all we’re hearing about is new housing, but we need a new strategy to transform our existing stock, both commercial and domestic.

We need government to reengage on this because if the economy is going to get more wobbly, one of the best ways to keep the building industry going is to provide work on our existing stock and repairs. It’s a massive market for small businesses, all these people living in leaky homes at a time of fuel price increases, and we’ve got to cut our emissions if we’re ever going to meet our legal requirements.

BB:

One thing about Britain is we tend to see housing as an investment rather than as a home, whereas other in countries like France and Germany people are far more happy to rent. We need to change the psyche of owning your own home, and I think that’s happening with the younger generation who can’t afford to get on the housing ladder now.

Perhaps we should be seeing more institutional investment to create private rented homes, which would be more attractive. We do need to boost standards and, I would argue, build more homes to increase the supply so more people can get on the ladder as prices drop.

I think the ageing population is another ticking time bomb – we’re going have to think about adapting existing homes or building new types such as bungalows to cater for my generation who will probably demand higher standards and quality homes.

BB:

Yes, it’s not something we’d be directly involved in, but I think its very London-centric. If you go beyond London the market is completely different.

It would be a concern in London that if private investment dries up, house prices will fall. They are already starting to fall in Zone 1, and that ripple effect will work its way out, but is that such a bad thing? House prices in London are so high that I think the danger would be if it was rapid, if it dropped 10, 20, 30% and people went back into negative equity. If there was more of a levelling off I think that would be a good thing.

BB:

Our Master Builder awards are in September 2017 and are a great showcase of what the industry can do best. You sometimes hear a lot of negatives about ‘cowboy builders’ and horror stories of things going wrong. This is an example of showing the best of the building industry; we want to get the message out to the media that the industry is about delivering fantastic projects, new homes, refurbishments.

In January we start our new 3-year strategy to improve our services for our members, working on a new database to drill down more carefully and get a better idea as to their needs. It’s all part of our commitment to modernise, ready to keep moving forward and set the benchmark.

You can find out more about the Federation of Master Builders here.

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--Michael Brooks