Andy Burnham must address severe shortages in the construction workforce to end the housing crisis by rolling out the largest council housebuilding programme since the post-war era, the chief executive of an East Anglian housing association has said.
The prime minister-in-waiting wants to redirect the existing £39 billion, 10-year affordable housing budget for England towards social rent – the cheapest and most heavily subsidised form of publicly funded homes.
Michael Newey, chief executive of Broadland Housing Association - which provides around 5,900 homes across Norfolk and north Suffolk - said that if the prospective prime minister is serious about delivering a “council housebuilding boom”, he will first need to bolster the construction workforce.
It is estimated that the UK construction industry needs in the region of 250,000 additional workers over the next few years, with a skills shortage leaving tens of thousands of vacancies unfilled while many existing workers are nearing retirement age.
There are currently more than 140,000 job vacancies in the construction sector, stalling housing projects, according to training provider PfP Thrive. By 2035, over a third of current construction workers will retire, worsening the skills crisis.
“It’s not just about providing the funding to build homes,” Mr Newey said. “We’ve got to grow the workforce.
“It’s about investing in training and apprentices because otherwise we will have a really big problem coming up, and I don't see how we would resolve that without attracting construction professionals from outside the UK.”
The Labour government has pledged to build 1.5 million new homes in England over the course of this parliament - but it is already falling behind.
The latest Energy Performance Certificates (EPC) data suggests that just 204,000 new homes were delivered in the 12 months to March this year – far short of the numbers needed to meet the government’s target by 2029.
Mr Newey said this target was “never realistic”.
“If you look back historically, we have only built those sorts of house numbers in the 1950s and early 1960s, and that was primarily through local authorities building, which is much more constrained nowadays,” he said.
“I think sometimes it's good to have an ambition, but the reality is that unless we find access to much larger amounts of public funding, we won't be able to build 300,000 homes a year.
“And if we haven't got the construction workforce, you can't just build those houses. Too often, politicians underestimate the challenge of providing the workforce to deliver their targets.
“It's not just about funding the construction; it's about funding the education and training as well.”
The average house price in England was £300,000 last year - almost eight times average earnings.
In the 1950s, councils were building almost 200,000 new council homes a year – last year that number was just 1,970, with only around half of all councils now owning or building homes directly.
Council house construction has collapsed since the 1980s, with many being sold off since then under the right-to-buy policy for tenants brought in by the Thatcher government.
Shelter, a charity supporting people facing homelessness and housing problems, reports that more than 1.3 million households are on local authority social housing waiting lists.
More than 130,000 households are currently stuck in temporary accommodation, including around 170,000 children - both record highs.
“The housing crisis is not something that has suddenly appeared; it has been building back for the last 30 or 40 years,” Mr Newey said.
“If we just look at the affordable end of the market, there are something like 22,000 households on waiting lists across Norfolk and into Suffolk, who are being priced out of the market.”
Many developers are axing their affordable home commitments as part of housing schemes, claiming they are no longer financially viable.
Mr Newey said this growing trend is because developers are battling higher building costs, land prices and challenges in the labour market.
“The housing market is hard work right now,” he said.
“They take great pride in what they're building but, ultimately, they're profit-making entities.
“We know that we need many more homes in the county - of all tenures. But if a local authority maintains a developer’s commitment to new affordable housing, and then the scheme doesn't go ahead at all, you're losing out on two fronts.
“Going back to Andy Burnham and his targets, we very much support anything that aims to increase the supply of genuinely affordable homes, and I'm not really too fussed about who owns the shovel as it’s about getting more homes built.
“If there is funding available, the sector would welcome it.”
