Building recovery under threat, warns FMB Cymru

The economic recovery in the Welsh SME construction sector is under threat from rising building costs and material shortages warns the Federation of Master Builders (FMB) Cymru.

Commenting on the results of the FMB’s State of Trade Survey for the first three months of 2014, Richard Jenkins, Director of FMB Cymru, said:

“Rising building costs and material shortages are causing serious concern in the building industry with 80% of SME firms expecting the situation to worsen over the next six months. Although our latest snapshot is the fourth successive quarter showing positive results for workloads, employment and enquiries, this could be undermined by a spike in prices and costs.

“Materials prices are generally around 10% higher across the board with small construction firms highlighting timber products such as sheet materials and timber fencing as being particularly expensive. The increase in the price of timber fencing is largely due to the severe storms that battered the UK during the winter.

“Added to this are concerns over the ready supply of particular materials such as bricks, which could scupper the ability of SME house builders to plug the shortfall in housing supply – this at a time when we need to rapidly increase the number of new homes. Small house builders report that brick manufacturers are asking them to wait until the beginning of 2015 for new orders of bricks and our members perceive this prolonged delay to be a decision to prioritise brick orders from large house builders. If this problem continues, SME house builders may be forced to build with alternative materials such as render or risk stalling sites for the rest of this year.”

Jenkins concluded: 

“Wales was the only part of the UK to build less new homes in 2013 than in 2012; this at a time when housing supply has been failing to meet demand. The Help to Buy-Wales scheme, launched in November 2013, has increased housing demand further still. We fear that small, local house builders are being frozen out of the market because land is too often released in big chunks, meaning that only large volume house builders can develop this land. We are calling on the Welsh Government to make it a condition that when land is released for development, a portion of that land is released in smaller tranches, making it feasible for local smaller builders to develop. We believe that in empowering our small builders, the demand for housing can be met, not to mention the wider community benefits using local SMEs will bring.”

FMB State of Trade Survey

FMB CYMRU TO SUPPORT SMALL FIRMS TO WIN TENDERS

The Federation of Master Builders Cymru (FMB Cymru) have won a tender to deliver a pilot project which aims to support small construction firms to bid for public sector contracts jointly. 

The initial phase of The Construction Enterprise Pilot Project (CEPP) will be a pilot in the South Wales Valleys area, with the aim of expanding the project to the rest of Wales in the longer term.  The support is free to FMB Cymru members and the initial phase of the project is to run until December 2014. Any companies interested, whether they are currently FMB Cymru members or not, are encouraged to contact the FMB Wales office on 01656 750955 or email wales@fmb.org.uk. 

Richard Jenkins, Director of FMB Cymru and Chair of the Wales Procurement Supplier Board, said:

"The project aims to practically support smaller builders to be able to bid for public sector contracts more successfully, by increasing the capability of local construction firms to help them win the contracts that they will be best-placed to deliver. It will enable like-minded concerns to work together to achieve growth and success in the tender market in South Wales Valleys initially, and then use the knowledge, contacts and skills to keep winning contracts in the local area and wider markets in the longer term"

“We want to help Welsh local builders to compete at a price point comparable with their larger competitors, and develop their business by taking part in joint activities that will drive success through a focus on cost reduction, good management and control.  We feel it’s important for us to be supporting small construction businesses in Wales, to achieve the critical mass required to bid into contracts, that previously they would not have had the confidence or experience to engage in"

The Construction Enterprise Pilot Project (CEPP) will help support the ‘Joint Bidding Guide’ launched by the Minister for Finance last autumn.

Finance Minister Jane Hutt said: 

“I’m delighted that the FMB want to support the Joint Bidding Guide and improve access to contracts for smaller businesses in Wales.  We all want to see access to public contracts widen through consortium bidding and this is an excellent example of how this can happen.  I would encourage small businesses in the South Wales Valleys to take advantage of the FMB’s pilot to improve their chances of winning public sector contracts.”

FMB Cymru's Richard Jenkins Discussing House Building Levels in Wales

Richard Jenkins discussing the reasons behind lower levels of house building in Wales.  BBC Radio Wales, Good Morning Wales.  19.02.14

FMB Cymru's Richard Jenkins Discusses the Impact of 2014 Storms on Builders. BBC Wales at Work

FMB CYMRU CALLS FOR ACTION TO GET SMALL FIRMS BUILDING

 

The Federation of Master Builders Cymru (FMB Cymru) is calling for 2014 to be the year where procurement and planning decisions enable small builders in Wales to win more contracts.

Richard Jenkins, Director of FMB Cymru, is the new Chair of the Procurement Supplier Board, which will be the leading Welsh forum allowing suppliers in Wales to discuss government decisions in Wales.

Following the recent announcement by Labour at Westminster, which set out plans to fix the broken housing market by building an army of small and custom builders to help the next generation on to the property ladder, Richard Jenkins, Director of FMB Cymru said:

“It is vital that procurement and planning decissions in Wales support small construction firms. A lot of policy has been discussed during 2012 and 2013, and we support a lot of what the John McClelland Review of Public Procurement in Wales reported. However, 2014 needs to be the time to take action.

“We would welcome changes in the procurement system, which would allow smaller companies to compete for contracts in Wales. This would also include strengthening the voice of the supplier in the decisions taken by the Welsh Government regarding public procurement. For example, there is currently no supplier representation on the Welsh Government’s National Procurement Board. This is why we are hoping to increase the supplier input through a Procurement Supplier Board, and will be looking to work closely with the National Procurement Board.

“In addition we would like to see planning decisions which would release land in smaller tranches, again allowing a number of smaller companies to win contracts in Wales, not just the larger UK companies which have dominated the market in recent years.

“At Westminster, Shadow Housing Minister, Emma Reynolds, has announced that a future Labour Government would require local authorities to allocate more small sites for house building, and a commitment to ensure public land will widen opportunities for small builders. This is a policy we wholly support, and in Wales Labour is in Government and is in a position to implement this policy now, so we would welcome the same commitment for Welsh construction firms.”

 

HOUSING BILL NEEDS TO INCENTIVISE NOT JUST PENALISE

 

The Federation of Master Builders (FMB) Cymru has broadly welcomed the Welsh Government’s intent to introduce the Housing (Wales) Bill - but warns that any legislation to tackle rogue landlords and penalise owners of empty homes needs to be looked at in conjunction with supporting local SME builders.

The Housing Minister is due to make a statement in Plenary, scheduled for Tuesday 19 November, before scrutiny of the Bill by the National Assembly begins.

Richard Jenkins, Director of FMB Cymru, said:

“We are pleased to see the Welsh Government looking to proactively improve standards in the private rented sector and increase the supply of housing.  We have already had positive dialogue with the Cabinet Ministers about these issues previously, and hope that we can continue to work with him to improve the standard of living throughout Wales.

“We are pleased that the Welsh Government are giving attention to the existing housing stock, as Wales has the oldest housing stock in Europe, and two thirds of the houses we will be living in in fifty years’ time have already been built. We genuinely hope that the Welsh Government will look at incentives for property owners to bring empty or disused homes back onto the market, and not just tools such as granting councils power to increase tax on homes that are empty for a year or more. We would hope to see support and incentives for landlords to be able to use local building companies to carry out improvements, to raise the standards of properties and get them back on the market. Schemes such as the Houses into Homes are a good start, but much more practical support is needed to make a real difference.

“We also welcome the intention to tackle the issue of rogue landlords by introducing a compulsory licensing and registration scheme for all private rented sector landlords. They will have to work to a code of practice which will help improve standards across this growing sector of the housing market. We have called for action to prevent rogue builders at the other end, being able to freely work in the domestic sector with no licensing or assessment framework. We feel that developing a protocol for higher standards in the building industry will support the Housing Bill to achieve its goal of improved quality and standards in the private housing market.”

Further information:

The Welsh Government intends to introduce the Housing (Wales) Bill into the National Assembly for Wales in November, subject to the Presiding Officer’s agreement. The Housing Bill is expected to cover:

                              I.        tackling homelessness and empty homes;

                            II.        improving standards in the private rented sector;

                           III.        increasing the supply of housing; and

                          IV.        improving its quality.

http://wales.gov.uk/newsroom/housingandcommunity/2013/131022novhousingbill/?lang=en

The Houses into Homes scheme is a £20 million fund to provide loans to bring empty houses or commercial buildings back into use as homes - including splitting them into flats - for sale or rent.

http://wales.gov.uk/topics/housingandcommunity/housing/private/emptyhomes/housestohomes/?lang=en

New Chair of the Welsh Construction Federation Alliance

Richard Jenkins, Chair of the WCFA

New Chair of the Welsh Construction Federation Alliance warns of prosperity gap between Wales and rest of the UK if smaller construction companies are ignored.

Richard Jenkins, Director of the Federation of Master Builders (FMB) Cymru, has been elected as Chair of the Welsh Construction Federation Alliance. 

The Welsh Construction Federation Alliance is a partnership between The Federation of Master Builders (FMB), The Civil Engineering Contractors Association (CECA Wales), the National Federation of Builders (NFB) and the Home Builders Federation (HBF). Together they form a united voice for the construction industry in Wales.

Richard begins his two-year term with a warning that the Welsh economy will struggle over the coming years if construction companies in Wales, and smaller companies in particular, are ignored:

“We are grateful to Rhodri-Gwynn Jones of the CECA Wales for his hard work as Chair of the WCFA over the past two years.  As the newly elected Chair of the WCFA, I look forward to working with all partners to support the construction companies and the economy as a whole.

“The construction industry is in a very changeable environment right now.  On the one hand we see record house prices in London and the South East of England, distorting the economy and on the other we see large construction firms pulling out of large areas of Wales, due to a lack of demand and rising costs.

“I take over as Chair at a vital time for the construction industry.  Within the next two years there will be European Elections, a UK General Election and a Welsh Assembly Election. We need to influence each of these to ensure the best conditions for the Welsh Construction Industry, an industry which is of vital importance to any economic recovery in Wales.

“The WCFA wants to ensure that that the construction industry is able to thrive throughout Wales.  Ninety-eight per cent of construction companies in Wales employ less than ten people and are located throughout the country.  We want the right conditions for them to grow, and we’re happy to work with government and partners to ensure this.  If this doesn’t happen, the Welsh economy will continue to limp along again while other parts of the UK will experience considerable growth.”