Khan’s affordable housing targets would hurt SMEs

Published date: 03 May 2016

Sadiq Khan’s welcome focus on construction skills risks being overshadowed by an unrealistic affordable housing policy, the Federation of Master Builders (FMB) has warned ahead of the London mayoral elections.

Brian Berry, Chief Executive of the FMB, said: “Khan is right to link the housing crisis with the construction skills crisis. The growing shortage of talented tradespeople is widely recognised as one of the greatest barriers to house building and no amount of funding or target setting will work if the talent isn’t there to actually get the homes built. Our latest State of Trade Survey underlined the persistent recruitment challenge firms face, with more than half of SMEs struggling to recruit bricklayers over the past year, and shortages remaining acute in many other vital trades.

Berry continued: “Bold, innovative ideas to plug the skills gap are therefore desperately needed, which Khan seems to recognise. The creation of a ‘construction academy scheme’, developed in tandem with the house building industry, is a creative solution that could put employers at the heart of skills policy in the capital. Moreover, a specially created skills taskforce, that works with business on addressing key skills shortages, has the potential to be a productive platform for responsive and collaborative decision-making. Given that construction SMEs train two-thirds of all apprentices in our sector, we hope that such a platform would give proper consideration to the contributions of smaller firms.”

Berry continued: “However, Khan’s 50% affordable housing target is entirely unworkable – as has been observed by others that, 50% of nothing is nothing, and this is a particularly pertinent issue for small developers. We urge the Labour candidate to introduce a small site exemption, similar to that which Central Government is bringing forward in its Housing and Planning Bill. This recognises that placing unrealistic affordable housing demands on small sites will leave thousands of projects across the city unviable and hugely increase the barriers to growth of smaller developers. Khan’s “Homes for Londoners” policy, which envisages the house building sector working with City Hall to address the housing crisis, shows he is open to working directly with our industry. We hope that Khan stays true to this and takes SMEs concerns on-board.”

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