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Brexit will decrease capacity of construction workforce to deliver new homes say respondents to Scottish Federation of Housing Associations’ survey

A Scottish Federation of Housing Associations’ (SFHA) survey on the potential impact of leaving the European Union has revealed that 70% of respondents think Brexit will decrease the capacity of the construction workforce to deliver new homes.

The key areas of concern highlighted in ‘The Potential Impact of Brexit on Housing Associations in Scotland’ are the ongoing uncertainty; the impact of the uncertainty on financial markets and the impact on private finance; and the possible impact on the construction and workforce supply chain and costs.

 

Nearly 70% of respondents think Brexit will decrease the capacity of the construction workforce to deliver on new social housing developments and over 80% believe it will impact on the supply chain of trade and building materials through increasing costs in general – inflation and exchange rates – and in building materials and components in particular.

 

SFHA members prioritised their key areas of concern as follows:

·         Capacity of the construction industry to deliver new social housing developments

·         Financial investments via European funds for social housing

·         Equally weighted were: workforce capacity for service delivery and private sector investment in social housing

·         Potential changes in regulation and procurement

·         Demand for social housing and future developments

 

While 80% of respondents foresee a possible negative impact some organisations see some balance between the risks and opportunities of Brexit.

 

Some members said they thought opportunities could arise from leaving the EU regarding developing a greater supply of Scottish and British construction trades and workforce.

 

While the majority of respondents said they have not experienced any change in attitude from potential private finance providers or investors since the referendum, there are examples of uncertainty and concerns in future growth and development plans due to current discussions with lenders.

 

Two thirds of respondents do not foresee any change on the Scottish Government’s Housing Association Grant (HAG) rate but some consider overall pressure on Scottish public finances may result in reductions of HAG overall. A respondent stated:

 

Not surprisingly, 90% of respondents said Brexit will ‘significantly restrict’ access or ‘restrict’ access to three investment options in particular – the European Investment Bank, European funds such as the European Social Fund, and the European Regional Development Fund. Many communities have benefited from the wider community development work which housing associations do, much of which is currently paid for using EU funds.

 

Mary Taylor, chief executive of the SFHA, said: “The capacity of the construction industry to deliver new social housing is paramount at a time when 50,000 affordable homes are to be delivered within five years. It is therefore a huge concern that almost 70% of respondents to our survey think Brexit will decrease capacity of the construction workforce.

 

“While there is little optimism about the challenges ahead, there is a recognition that it may prompt better training and employability opportunities. However, to exploit those effectively, and minimise disruption, we need to start acting now. I have already written to Scottish Ministers to encourage them to create a significant number of apprenticeships in order to safeguard the future of the housebuilding sector in Scotland.

 

“Access to funding and investment is also an area of huge concern for the social housing sector, and we will be seeking clarity on the situation as negotiations progress.”

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