David Fry of the Construction Employers Federation looks ahead to 2021 and what’s around the corner for us, and the construction sector as a whole, after 10 months we’d rather forget
If you’d been writing this piece a year ago, you would have forecast that the greatest challenges and opportunities facing the construction sector would in large part be comprised from the outworking’s of the re-establishment of the Northern Ireland Executive and the Brexit transition period.
With the onset of the Covid-19 pandemic however, much greater challenges emerged.
As the crisis took hold, the construction industry responded.
The federation is immensely proud of its members, their employees and supply chains who did so much throughout 2020 to put in place the infrastructure that enabled our health and wider public services across these islands to meet the challenges of the pandemic head on.
Ours is an industry which, not for the first time, has shown its capacity to adapt and innovate – something clearly shown in our work with industry and Government to make public sector construction sites Covid-secure so that the majority of work could recommence in May. However, we are now moving into a more uncertain phase.
Much like in the financial crash of 2007/08, the construction sector often feels a lag in terms of the direct impact on it from economic crises. Indeed, in that context, the worst point for job losses and company insolvencies turned out to be 2012.
What will be needed the most in 2021 is therefore a rebuilding of confidence – and this can come through a variety of means.
At the time this article is published, it is likely that the Northern Ireland Executive will be consulting on its 2021/22 Budget. Through no fault of the Executive’s making, this will not be the multi-year budget that was promised in ‘New Decade, New Approach’. However, it must begin to chart a new path for how we prioritise and spend the public sector capital budget.
In concert with industry, the Executive must utilise this opportunity to put in place the foundations for multi-year budgets for areas like road maintenance and new build social housing but also open up an honest and frank discussion about the Block Grant and its limitations.
If we take the articulated funding need of Northern Ireland Water alone over the coming PC21 period, it is perfectly possible that it could be completely funded out of the Block Grant.
That though would require the Executive roughly doubling its current annual investment in the go-co and come, almost certainly, at significant detriment to the other clients priorities within the Department for Infrastructure alone.
Therefore, we need 2021 to finally be the year when strategic governance and funding challenges facing Northern Ireland Water and, indeed, the Northern Ireland Housing Executive are prioritised and dealt with.
We expect the first six months of the new year to see a raft of Executive strategies being published and consulted on. The construction industry will of course play its part in the development of these, but we must also not lose focus on an array of other confidence building measures that are before us:
● Maximising the opportunities of the upcoming review of the implementation of the 2011 Planning Act so to ensure that we have a two-tier planning system that is fit for purpose
● Introducing and passing the legislation that is likely required to create a new Infrastructure Commission for Northern Ireland.
● Delivering on the recommendations of the Public Accounts Committee report into the delivery of major capital projects so that we have a commissioning, procurement and delivery system for significant public sector infrastructure projects that is world class.
● Work to establish procurement models across Government, through a newly constituted Procurement Board, that actively incentivise contractors and seek to share risk more equitably.
● Look again at the potential impact of financial transactions capital in terms of the Executive supporting private sector development that is otherwise unable to proceed.
● Build further on the Department for the Economy’s Apprenticeship Recovery Package to ensure the industry skills needs are future proofed.
On Brexit, we believe it right that the ambition must remain a comprehensive, tariff free, free trade deal between the UK and EU be agreed by the end of 2020. This notwithstanding, we will closely monitor the success of the Trader Support Service, the challenges of the new points-based immigration system and the implementation of any new public procurement frameworks come the new year.
It is though worth remembering that the further we push into 2021, the 2022 Assembly election will come onto the horizon. With vaccines and therapeutics likely to gradually weaken the pandemic as the year progresses, what we can ill-afford is another period of political destabilisation in 12-18 months’ time.
Recent experience has told us that we probably now only have a window until the autumn in order to put in place the confidence building measures that are needed to incentivise development and create jobs.
Our chief concern is that this opportunity will not be taken as election politics takes hold. We sincerely hope we are wrong.