Construction BUSINESS

The CIF has welcomed the €2.3 billion housing package and the 24% increase in capital infrastructure funding announced by the Government in the recent Budget. However, the CIF has expressed disappointment that there was no clarity in relation to an extension of the Help to Buy scheme which is due to expire in December 2019.

Director General Tom Parlon stated: “This will create uncertainty next year for both first-time house buyers and homebuilders. The Help to Buy Scheme has significantly contributed to a 30% year on year increase in housing output since its introduction. This measure essentially resulted in making it financially viable to build starter homes again and freed up finance from banks for this segment.

“We welcome the provisions announced for an affordable housing scheme of €300 million. However, more details on the deployment of this fund is required and we will continue to work with the Department of Housing on the mechanics of this scheme.

“The industry will require further information from the department on exactly how this scheme will be implemented as soon as possible to avoid any uncertainty. It’s our view that this scheme should be modelled on that in the UK.

“We welcome measures giving Local Authorities greater flexibility to develop social housing. If procurement practices in the public sector and at local authority can be modernised, there is every chance that thousands of social houses can be brought online over the next decade.

“We’re encouraged by the announcement of the €300 million human capital initiative.  We need to see details but we hope that the fund helps to stave off any looming shortage of skilled workers required to sustain the level of construction in housing, infrastructure and specialist construction.

“There is much to be welcomed in this budget for the construction industry. In 2016, SOLAS estimated that the industry would need an additional 100,000 workers to deliver on the Government’s stated ambition in housing delivery and in the National Development Plan.  However, we have not seen a concurrent increase in investment in increasing the numbers of skilled trades and craft people coming out of the education and training system.   We are concerned that, having put in place a number of legislative and budgetary measures over the past five years, essential housing and infrastructure delivery will be stymied by skills shortages in construction.

“We hope that the increased contribution levied on industry for the National Training Fund is utilised to increase the number of skilled workers coming through the Irish education and training system.  Earlier this year, a DIT survey carried out of CIF members showed that 94% of large construction companies reported a lack of sufficiently skilled tradespeople in the market.  It also showed that the apprenticeship model is broken in the very trades we now require acutely to increase housing supply with 71% of companies not currently hiring apprentices.

“We believe that it’s now essential that the Housebuilding Finance Ireland fund announced last year is deployed. We’re calling on the political system to accelerate the introduction of this measure. This will ensure that regional housebuilders have the financial capability to deliver homes outside the greater Dublin area where there is viable demand.

“We are currently in a period of inflation in construction costs and we have already seen many construction companies have to enter examinership or go into liquidation. A large proportion of these companies are involved in public sector contracts and have got caught out because Government contracts place all risk and unforeseen costs on the contractor.  The Government must accelerate its efforts to modernise procurement practices otherwise the National Development Plan and housing delivery will be costlier with more overruns and delays in addition to a continuing trend of liquidation in the industry.

“Finally, we welcome the restoration of 100% interest relief for investment in residential properties.”

The CIF has called for more effective coordination between industry and government in three key areas: investing in skills and R&D, enhancing infrastructure delivery and removing barriers to sustainable housing delivery.