Builders’ organisation the Federation of Master Builders is warning that the government is putting the future of the construction industry at risk.
Public spending cuts, the abolition of regional housing targets and the continuing difficulties in obtaining a mortgage are all risking the future of the building industry, according to Richard Diment, FMB director general, ahead of the forthcoming Spending Review next month.
He said: “The Government’s big idea is that jobs lost in the public sector will be replaced by new job creation in the private sector. The problem is that public sector cuts are moving at a far greater pace than private sector job growth, leaving a massive employment gap in the middle. These cuts are not just public sector jobs, but also at firms whose business is supplying the public sector.
With the public sector procuring around 40% of all construction work, Diment pointed out that major cut backs here will inevitably mean jobs being lost at private sector firms which work for public sector clients.
“The result of this is that many of those laid off from construction firms will end up in the informal economy undertaking ‘cash in hand’ work for rogue builders that defraud clients and put lives at risk by ignoring essential safety precautions.
“What is even more worrying is that the Government is set to make the informal economy problem even worse in January when VAT will rise to 20 percent. This will cost 7,500 jobs in the domestic repair and maintenance sector within a year, and the total cost to the economy of this policy could be as high as 34,000 jobs.”