Without reforms to housing procurement, the Scottish Government is unlikely to meet its target of delivering 50,000 new affordable homes by 2021 – and by focusing on price, current procurement practices will not deliver the mix and quality of housing Scotland needs for the future. These are the headline conclusions from the latest Scottish Construction Monitor, a quarterly survey of the membership of the Scottish Building Federation which represents hundreds of building companies located throughout Scotland, from Orkney to the Borders.
Employers responding to the survey are asked to rate how confident they feel about the prospects for their business over the next 12 months compared to the past year. For the second survey period in a row, industry confidence has been rated negative at MINUS 3, a marginal improvement on the previous survey rating of MINUS 5.
Industry employers responding to the survey were asked how likely they think it is that the Scottish Government will achieve its target of delivering 50,000 new affordable homes over the lifetime of the current Scottish Parliament. More than three quarters said they thought it was “unlikely” that the Scottish Government would achieve the target. Only 9% said they thought the target was likely to be met with a further 13% of respondents predicting that the Scottish Government definitely will not meet this target.
SBF members were also asked a series of questions about their experience of housing procurement practices in Scotland. Most reported that, based on this experience, procurement decisions tend to be taken mainly on the basis of price with other considerations like quality, the use of local subcontractors and the creation of local employment opportunities treated as much less of a priority. In the future, respondents to the survey said they would like to see quality in particular given much greater priority in reaching housing procurement decisions.
Commenting on the latest industry confidence rating, Scottish Building Federation Managing Director Vaughan Hart said:
“I think this latest negative confidence rating reflects the fact that the construction industry dislikes uncertainty and the reality is that we are currently living through very uncertain times. I think the outlook for Scotland’s economy also remains challenging and this is also impacting negatively on industry confidence.”
Commenting on the headline survey results, Vaughan Hart added:
“There is obviously a genuine concern within the construction sector that, based on its current approach to procurement, the Scottish Government is not going to reach its affordable housing target. At the same time, there is equally a concern that current housing procurement decisions are too much driven by cost above all other considerations. That is not going to help us to deliver the types of housing Scotland needs for the future.
“Applied correctly, procurement has the potential to be a powerful tool that helps to deliver a combination of benefits to Scotland’s society and economy. It should be delivering the right mix and quality of housing in suitably large numbers and in the right locations – while delivering associated benefits in terms of supporting local building contractors that are able to offer sustainable local employment opportunities. Our members’ concern is that, with price treated as the overwhelming priority for procuring authorities, this simply isn’t happening at the moment and that is a huge missed opportunity.”
Vaughan Hart concluded:
“As an industry federation, we want to work with Government to find new approaches to procuring and building new housing that, by partnering with SME construction businesses who can offer direct employment opportunities, meets these targets in a way that is sustainable in the long term – for the industry, for local communities and for the Scottish economy as a whole.”
Notes to Editors
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1. Scottish Building Federation (SBF)
The SBF promotes the interests of the construction industry to a diverse range of stakeholders and is the leading employers’ federation for the industry, representing hundreds of companies from Orkney to the Borders.
2. Scottish Construction Monitor
59 Scottish construction firms completed the survey online or by post between 5th and 15th December 2017. Businesses were categorised in terms of size (no. of employees and turnover).
3. Business Confidence Index methodology
The Scottish Construction Monitor is calculated from the responses to the following:
“Overall, how would you describe your confidence in the economic prospects facing your business over the next 12 months, compared to the previous 12 months?”
A score is applied to each response as shown below, and an average score calculated:
Much more confident +100
Slightly more confident +50
As confident 0
Slightly less confident -50
Much less confident -100
Using this method, a Confidence Index of +100 would indicate that all survey respondents were much more confident about future prospects, while -100 would indicate that all survey respondents were much less confident about future prospects.
4. For further information, please contact
Alex Bruce, Orbit
Tel. 07747 636504