Robert Courts is Member of Parliament for Witney, chair of the All-Party Parliamentary Group for Small and Micro Business, and a member of the Federation of Small Businesses.
Thirty years ago, four in ten new homes were built by small builders. Now, it’s barely a tenth. When I was elected as Chair of the APPG for Small and Micro Business last year I wanted my first inquiry to look at why that has happened, and – if that trend could be reversed – what role smaller businesses could play in building the homes we need in the UK.
The Conservatives are the party of small businesses: those people and families who have had an idea, taken a chance, put everything on the line, and work all day, every day, to make a better future for themselves and their families. But why is it so important that they play a bigger part in building homes?
Simply, because small businesses overwhelmingly work near to where they live. This is as true of homeholders as it is about high street businesses. In many areas – and this is certainly the case in my West Oxfordshire constituency – we know that there is more housing coming. What is essential is that it is housing in the right place, of the right kind, that it complements the local area – and that the infrastructure comes at the right time. Politicians must not simply be obsessed with numbers but must consider how new homes are to be provided, and the effect they have on those who already live there.
A small builder is likely to be a local builder. They, too, will care about their local area. If they build homes, they are more likely to ensure that they complement the community, because they too have to drive past them each day. They are less likely to wish to renege on infrastructure payments, because the community facilities or transport links will affect them, too. They will want to create homes, communities – to create places – rather than faceless developments. Small builders will not have the cashflow incentives to land-bank, but have a real incentive to build out the permissions they are given, meaning we do not have the situation so hated by local communities where permissions are granted for sites that then sit empty for years. And further, as surely most MPs will agree, if there is to be money spent on homes in my area, then I want the people employed to be local, and that money to stay in my local area where it benefits my businesses, who pay business rates in my area and thereby benefit my constituents, not go to a large company that is based elsewhere and may not have my area’s best interests at heart.
So if we are to build housing that works for us, in the right place, at the right price – and whether it benefits and does not blight communities – then we must get behind small builders. At the end of last year, the APPG invited small builders to talk to us about the challenges they faced in building homes. After hearing from them, alongside experts in housing, we have today published a series of recommendations that, if taken, could really help small businesses get back in to building homes. In our view, these recommendations should form part of a dedicated Small Homebuilders Strategy.
What has struck me through this inquiry is that the challenges faced by small builders are wide and far-ranging, and helping builders overcome these will require a cross-Government effort. A dedicated strategy would give Government a real focus on how to make sure policy is addressing the real barriers faced by smaller homebuilders, which are quite distinct from the issues with the larger players.
To help small builders access the finance they need to get schemes started, we’d like to see initiatives that not only increase the investment available, such as the Home Builder’s Fund, but also to help improve the terms of finance.
We’d like to see steps to address poor payment practice in the construction sector. The Federation of Small Businesses has long argued for further action to be taken to address the UK’s payment culture. There should be an even greater emphasis on supporting small businesses in supply chains and ensuring small firms will be paid for their work they do, whatever the circumstances.
The construction sector is facing a growing skills shortage and there must be more action on getting the skills we need in to the homebuilding sector. Construction can be a good career option: we must do everything we can to encourage more people to pursue it. Government must ensure that T-levels and Apprenticeships are designed to be accessible for, and benefit, smaller businesses who in practice employ most construction workers.
Finally, if more homes are to be built locally then we need to ensure that small builders are able to get their fair share of the right sites. We must push forward on ensuring higher small site availability in local plans. We must also do all we can to develop a streamlined process for small sites to ensure that small builders are not frozen out by those with bigger resources, and to ensure that small sites are viable instead of the bigger ones that so often distress local communities.
Any sector of our economy would grind to a halt without the involvement of small businesses. What has happened in homebuilding is a case in point. As Conservatives we should be backing the small builders that can really make places. It’s time to redouble our efforts to ensure that in so doing, we build the right homes, in the right places.