1st Quarter 2001 - Current Issues The number of respondents to the first quarter 2001 FMB state-of-trade survey is higher than before, but the proportion making use of the 'scribble pad' on the back page of the questionnaire, to write in comments either on the state of trade, or on issues which members wish to see addressed by the FMB on their behalf, has remained above one quarter of the total response. Also unchanged are the main issues that survey respondents would like the Federation to address. Almost exactly a third of all those using the 'scribble pad' express concerns over the effects of the Construction Industry Scheme (CIS) for the taxation of sub-contractors in the construction industry. These range from the reduced availability of trades to work as sub-contractors, to increases in the rates of pay claimed by those who are willing to offer their services in that capacity, and the 'red tape' associated with administration of the Scheme. Only marginally fewer firms refer to the rate of Value Added Tax on construction work, particularly housing RM&I, complaining of the impact on a rate of 17½% on their competitiveness vis-à-vis both 'cowboys' and those - including trades that have set up in business on their own in preference to registering as sub-contractors under the CIS - who, whether legitimately or not, do not charge VAT on their services, or work for 'cash in hand'. The number raising this issue is almost matched by that citing 'red tape', in one area or another, as a problem for the small or medium-sized building firm. Apart from the demands of the CIS, already mentioned, respondents again cite the 'tax collector' role that they play on behalf of the Government, and its imminent expansion in respect of stakeholder pensions. Concern continues over the compliance costs, both explicit and implicit, of health and safety legislation and regulations, and of the Construction Design and Management regulations. There is this time a slight increase of the proportion of respondents indicating problems with failure to honour terms of payment, both from client to contractor, and from main contractor to sub-contractor. However, as was the case last year, comments on this issue are out-numbered by the sum of those touching on various aspects of training, and its impact on the supply of suitably qualified personnel both at present and in the future. Against the background of rising workload, rising employment, and increasing difficulty in recruiting personnel with the training and experience to fill to vacancies on offer, an increasing number of FMB members are prepared to put pen to paper to express disquiet that present arrangements for training of skilled operatives are falling short of traditional apprenticeship arrangements, and also that the balance of Construction Industry Training Board payments to and receipts from building SMEs is working to the disadvantage of those firms. The evidence given is not specific. The feeling, however, is clear. Almost hand-in-hand with concern over training and the quality of the workforce is concern over accreditation of building firms for the quality of their work. There is clear support for the objectives of the 'Quality Mark' scheme, but equally clear concern over the costs to the small builder of participation in it. It is more clear from comments written in this time, than it has been from those recorded by previous surveys, that FMB members, if given the option, would prefer an 'accreditation' or 'registration' scheme administered by their trade association to one effectively imposed by the Government. An issue that appears for the first time in this survey, which may be cross-referenced with both the labour supply question and that of quality, is that of alleged employment of inadequately qualified immigrant labour. Respondents raising this topic all do so only on the basis of hearsay. However, there is no doubting their concern over another possible threat to the image of the building industry, if quality is not maintained. Further Information For further information, please contact: Federation of Master Builders Gordon Fisher House 14-15 Great James Street Holborn London WC1N 3DP Tel: 020 7242 7583 Fax: 020 7404 0296 First posted: 23 April 2001. Last modified: 24 April 2001.