Building for Success

Introduction

The aim of this policy programme is to enable politicians to focus on what really matters to employers, to help ensure that Scotland’s recovery is built on solid foundations. The challenges facing SME building companies in Scotland are formidable. At the end of 2010, the SME construction sector was facing a fourth year of decline. Indeed, FMB Scotland’s membership reported the largest fall in workloads and enquiries since the beginning of 2009. In the face of public spending pressures, cost increases and the tightening of purse strings in households across Scotland, there is a real danger that more and more job losses will occur across the sector. Construction is at the heart of so much of what Scotland hopes to achieve in the years ahead including more homes, improved transport, better schools and hospitals. It is also the key to Scotland’s chances of meeting its targets under its world-leading Climate Change Act as 27% of Scotland’s emissions come from its housing stock alone. Scotland’s SME builders want to be at the forefront of efforts to redress that figure but they need help to do so.

That is why FMB Scotland has identified three key challenges for the next Scottish Parliament:

First, building a greener Scotland: SME builders will lead the transition to a low carbon economy but only if steps are taken to incentivise the transformation of Scotland’s existing building stock with energy efficiency improvements and the installation of micro-generation systems.

Secondly, developing skills and training: increasing the number of construction apprentices and encouraging business support and management training for SMEs will equip employers with the skills needed to deliver low carbon policy objectives and stay competitive.

Thirdly, creating a new business environment: steps must be taken to level the playing field so that construction SMEs are not unfairly penalised and are able to thrive under Scotland’s public procurement, regulation and taxation systems.

FMB Scotland Policy Recommendations

Building a Greener Scotland

1. Introduce low interest rate loans and other financial incentives such as council tax or business rates rebates

to stimulate significant additional spending on energy efficiency in Scotland’s housing stock.

2. Demand that HM Treasury hands over Scotland’s £200m share of the Fossil Fuel Levy and ring fence this

dividend for investment in the low carbon transformation of Scotland’s existing housing stock.

3. Review the need for mandatory energy performance standards in order to reduce the emissions from the

existing building stock in line with the recommendation in the 2007 Sullivan Report.

4. Maintain funding for area-based domestic energy efficiency schemes to offer free loft and cavity wall insulation

for social housing.

5. Increase the number of waste disposal sites available for hazardous building waste and make local authority

recycling sites available for minor quantities of building waste.

6. Support and promote initiatives that encourage SME building firms to save money and reduce their carbon

footprints by re-using construction materials where possible.

Developing Skills and Training

7. Prioritise vital spending on capital investment to sustain jobs and skills in the construction sector through the

downturn.

8. Continue the ScotAction ‘Adopt an Apprentice’ scheme to support training until the construction industry

fully recovers.

9. Maintain resource levels for apprenticeships in Scotland so that SMEs are incentivised to employ the trainees

that the construction sector requires to cope with future demand and the training is responsive to the needs

of employers.

10. Ensure that colleges are adequately funded so that college construction departments across Scotland can stay

open to meet the training demands of local economies.

11. Link training to public procurement by ensuring that companies employing apprentices and adopting training

plans are scored highly in the standardised Pre-Qualification Questionnaire (sPQQ).

12. Provide funding through skills agencies to allow firms to innovate through the current difficult economic

climate by enrolling staff in short, add-on courses in key areas such as low carbon

traditional building as well as leadership and management training.

Creating a New Business Environment

13. Accelerate funding to a range of small and medium-sized projects such as social housing upgrades in order to

sustain SME building contractors and meet the housing needs of the Scottish population.

14. Promote the use of a standardised Pre-Qualification Questionnaire (sPQQ) by all public bodies in Scotland

and help ensure SMEs have an equal chance to secure contracts.

15. Ensure the Scottish Futures Trust (SFT) works with SMEs to develop procurement solutions that are

innovative and fair.

16. Raise the threshold for awarding public contracts via the SFT’s preferred hub programme from £750,000 to

at least £5million so that Scotland’s local SME contractors have a fair chance of benefiting directly from public

spending.

17. Direct public sector clients to seek alternatives to using retentions in public contract work which affect the

cash flow of SMEs disproportionately. A pilot excluding any retention from the contract conditions should be

carried out by the Scottish Government as a first step.

18. Urge local authorities across Scotland to adopt a unified and uniform “Trusted Trader” scheme, backed by

rigorous checks and safeguards, which allows consumers to have confidence in the firms they employ for

repair and maintenance work.

19. Maintain and expand initiatives like the Small Business Bonus Scheme which provides vital support for SMEs.

20. Continue to apply pressure to Scotland’s major lenders to increase the flow of vital credit to SMEs.

21. Increase pressure on the UK Government to cut the rate of VAT on building repairs and maintenance