As the UK General Election comes to a climax on July 4th, The SectorScope reports on a discussion from this year’s Installer Show at the NEC.
Compared to some of the testy exchanges seen during the hustings for the 2024 General Election, the discussion panel at the Installer Show demonstrated remarkable harmony.
The panel was asked: “What does the construction industry want from the next government?” The group from across the industry was generally on the same page, reflecting shared goals - and frustrations.
The discussion panel was chaired by Andrew Gaved, Editor at Large for the Elemental platform and the Installer Show. The participants were:
Iain Mcllwee, Chief Executive at Finishes and Interiors Sector (FIS)
Ilias Vazaios, Director of Low Carbon at Gemserv
Jon Vanstone, Chair at National Home Improvement Council (NHIC)
Kelly Butler, Strategy Director at British Electrotechnical and Allied Manufacturers’ Association (BEAMA)
There were five main points for the next government raised by the panel:
1. Finish what you start
A couple of the panel highlighted the unfinished Future Homes Standard as something they’d like to see finally delivered. Kelly Butler requested that the next government doesn’t “throw it away.”
It’s an understandable concern, given that past governments have let policies they don’t want to deliver simply slide out of view. For instance, while the pursuit of low-carbon heating continues, the commitment to energy efficiency improvements has not been so well supported.
A practical example of how this impacts policy is the recent change to the Boiler Upgrade Scheme. The BUS no longer requires efficiency improvement measures highlighted on the building’s Energy Performance Certificate to be completed before a grant is allocated.
Another issue raised is the delivery of the smart meter roll out. Kelly Butler pointed out that in the UK this process must accelerate and that across Europe other countries are way ahead of us in delivering this technology into homes.
2. Be consistent
This is a big one. There was broad agreement that government flip-flopping on sustainability policy must stop if the industry is to make any progress towards some of the significant carbon cutting policies.
Ilias Vazaios commented: “We need policy continuity. We have the ambition of installing 600,000 heat pumps per year, but we need to carry consumers, installers and the whole industry along the way.”
Jon Vanstone agreed: “We need to be clear on the long-term plan for decarbonising homes. The industry needs certainty in order to develop products and training, for example.”
One of the challenges is that large construction projects can become political issues, making them more prone to shifting with changing government policy.
Kelly Butler pointed out: “Critical infrastructure, like energy infrastructure and electrification, is too much of a political issue. We have top-level policies, but the way we tackle implementation is wrong.
He suggested that rather than approaching this challenge nationally, it might be more sensible to take a regional approach. This could provide much-needed focus and consistency. However, there was some question over whether underfunded regional authorities would have the wherewithal to carry it through.
3. Deal with energy pricing
This was one of the more specific requests from the panel to the next government. All agreed that a re-set of energy pricing is integral to delivering the UK’s switch from fossil fuel heating systems to ‘green’ electric systems such as heat pumps.
Currently, the energy pricing system favours gas, making it cheaper for consumers and businesses to operate gas boilers than heat pumps – even though heat pumps are more energy efficient. Kelly Butler noted: “We need flexibility on energy pricing to even out gas and electricity prices.”
This pricing imbalance is caused partly by levies placed on electricity production to support investment in the development of renewable generation. The lack of action on this means that consumers (and businesses) may hesitate to adopt electric heating because of higher kWh prices.
Ilias Vazaios said: “There has been no response (from the current government) on shifting the climate change levies from electricity to gas and that dilutes confidence.”
4. Stop trying to pick winners
No betting pun intended here (we think). The panel felt that government had a habit of focusing on a single technology to solve problems – see heat pumps and decarbonisation. While this technology certainly has its place, the panel felt that a more open-minded approach might help to deliver results faster.
5. Help us tackle our people shortage
The panel noted that the construction sector needs more tradespeople to deliver many of the governments key policies. Iain Mcllwee said that the industry needs a 66% increase in the workforce.
There’s more than one problem creating this issue. However, one of the significant problems lies in the way the current apprenticeship levy operates. It seems that a significant proportion of the levy funding is being directed towards what would usually be employer-funded training. Older workers accounted for almost half of apprenticeship starts in 2022//23, pointing to an imbalance in the number of younger people joining the trades.
Mr Mcllwee commented: “The average apprentice age is over 25 and studying higher qualifications. There’s nothing wrong in that, but we need trades.”
So, ring-fencing funding for younger apprentices training for trades would help to focus more of the cash where it’s most needed. The panel is not the first to suggest this, and some groups have also asked the government for an ‘apprentice guarantee’ to protect funding for younger, trade-focused apprenticeships.
Final thoughts
As this article posts to The SectorScope website, we’re on the eve of a General Election that’s lining up to introduce significant change to UK politics. What that means for our construction sector is hard to say. In spite of its value to the economy, politicians don’t often include it in manifestos (beyond vague promises of increased housebuilding).
Disappointingly, the requests raised by the Installer Show panel have been delivered to previous governments, yet politicians seem to find it hard to change old habits particularly around u-turns on policies that impact our sector.
But to put a bit more optimism into the mix, there are external forces driving change in key areas. For example, training trades in construction is vital if the industry is to meet requirements for ‘competence’ set out in the Building Safety Act.
The industry itself is leading the way on establishing what ‘competence’ looks like for each trade – but the Act will enforce the need to ensure that people on-site meet these criteria.
That’s a compelling argument for ring fencing apprenticeship funding for trades.
Another important driver for change in energy pricing and electrification in general is that the Energy Act is also now in force. It arrived quietly but is immensely important for the next government as it gives them the powers to start making changes that will impact energy pricing.
It’s not going to be an easy task since energy pricing is a complex system with many aspects to balance to reach fair pricing. But now that one of the major hurdles to change is out of the way, it’s simply a case of finding the right approach.
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