LEGAL & BUSINESS
IS IT REALLY AS SIMPLE AS “BUILD, BUILD, BUILD”? The impact of COVID-19 on the UK’s construction industry cannot be understated. While every sector has been affected by the coronavirus pandemic, construction firms were hit particularly hard – development sites were temporarily closed, with some projects even facing the prospect of being cancelled outright. Now, it looks as though things are slowly getting back to normal. However, the challenge we now face is ensuring the long-term recovery of the economy by supporting UK businesses, says Paul Howells, CEO of Accumulate Capital.
PAUL HOWELLS IS CEO OF ACCUMULATE CAPITAL – AN INVESTMENT AND PROPERTY DEVELOPMENT FIRM. ACCUMULATE CAPITAL CONNECTS REGISTERED INVESTORS WITH DEVELOPERS IN THE PROPERTY DEVELOPMENT FINANCE SECTOR TO ENABLE SELECTED, HIGH-YIELDING PROJECTS IN THE UK AND OVERSEAS.
FC&A – AUGUST – 2020
ACCUMULATE CAPITAL
O
n Tuesday 30th June, we saw the Government’s intended solution to this problem. Prime Minister Boris Johnson had spoken much of his Government’s “levelling up” agenda through a “house-building revolution” when first elected, but such initiatives were placed on hold as efforts were wholly directed to curb the rise of COVID-19 cases. In a bid to re-start construction; however, the Prime Minister now declared that he wishes to “build, build, build” once again. He has reaffirmed his Government’s commitment to focus on the construction industry as part of the efforts to revive the British economy. A £5bn package of capital investment was unveiled as well as an additional £1.2bn fund for school improvement. This is a positive step in the right direction, but there are concerns as to whether these ambitious investment plans are realistic and achievable. What’s more, we also need to take into account the possibility of a second outbreak of cases and the reintroduction of lockdown measures. 22
Kickstarting the construction industry In order for the Government’s infrastructure investment to be realised, it must ensure construction firms are able to once again function at their full operational capacity. It is being reported that productivity in the construction sector has dipped by 35%. This has to do with sites temporarily closing and developers implementing social distancing measures on-site. Although industry bodies were quick to provide guidelines for continuing operations through lockdown, enthusiasm has waned on big projects as part of the general economic stalling that COVID-19 has caused. Additionally, supply chains were impacted by the COVID-19 lockdown. Countries closed off their borders, and factories were shut across the world. This initial supply shock left some projects without the necessary materials at the beginning of the pandemic and added to the issues laid out above. As such, the market and employment stimulation that would come as a result of the plans laid out in Boris’ speech would be most welcomed. One extra benefit for the Government is the sheer number of individuals who are involved in any given construction project – ranging from architects and designers to conveyancers and builders. This means any attempt to kickstart the UK economy must place construction at the forefront of its strategy.
