InSite | What Could Brexit Mean for Construction?

After years of doubt, division, protests, petitions and Prime Ministers, the UK left the EU at 11pm on Friday 31st January 2020.


With the uncertainty of Brexit now arguably passed, industries will hope to see some clarity with regards to the future – none less than the construction industry, which has seen 3 and a half years of ups and downs.


Now it is done, what will Brexit mean for our industry?


Europe’s Construction Workforce

It is no secret that the construction industry faces a skill shortage crisis. However, for many years skilled migrant workers from EU nations have plugged that gap.


Part of the issue, argues Design and Build Consultant Kunle Barker, speaking to UK Construction Media, is that the full scale of the problem is not understood:


“Estimates put the number of non UK citizen EU Workers in the construction industry at around 750,000 but this number could be as high as two million people – so how will we continue to build and deliver projects without easy and fluid access to workers?”


However, one solution could be for the government to implement a similar system to the Japanese. In 2019, the Japanese government brought in a new visa system allowing up to half a million migrant workers to travel to and work in Japan, given that they had the necessary skills to work in an industry listed as ‘in need of additional labour’.


Socio-Economic Industry

Barker does see potential positive for native British workers in the UK’s withdrawal from the EU however. Discussing the nature of the construction industry, Barker commented: “The construction industry is one of the most socio-economic mobile industries in the UK, with many of the top executives’ positions in many firms filled by people who worked their way up the company structure.


“With this in mind, the UK Government and construction industry bodies should use Brexit as an opportunity to put in place long term training programs aimed at encouraging more people to enter the industry. Schemes aimed at encouraging young people, women, and people from other sectors to enter the industry and re-training should be a priority upon our exit from the European Union.”


Procurement Regulation

Other changes for the construction industry because of Brexit could be that SMEs are able to tender for more work, in addition to local authorities having more opportunity to work directly with local builders, developers and contractors.


Currently, under EU regulations, procurement is regulated by the Public Sector Procurement Directive and must be published in the Official Journal of the European Union. This results in local authorities having to place tendered packages of work into larger contracts called Frameworks, for which most SMEs are excluded from tendering directly due to their size. However, says Barker, with this system potentially ending after Brexit, SMEs and local authorities could feel the benefit: “Leaving the European Union may give local authorities more scope to work directly with its local supply chain offering better value for money, improved level of service and also having a direct benefit to the local community.”


Construction Materials

Another possible barrier the industry will have to face as a consequence of Brexit is that roughly 64% of the building materials used in the UK are imported from the EU, and around 63% of materials exported from the UK are to EU members. Therefore, it is likely that once our free trade agreements with the EU disappear, duties, quantity limitations and border delays could appear, which could all manifest into higher material costs.


Infrastructure Funding

Access for funding for large infrastructure projects will have to be reconsidered post Brexit, with our relationship with the European Investment Bank and the European Investment Fund more than likely to change. Without this funding, and the consequential delays in launching infrastructure projects, there could be a direct impact on the construction industry.