What are the changes?
The homebuilding industry has enjoyed a strong start to 2020, with housing named the best performing area of the construction sector, and 37% of builders predicting higher workloads over the next year.
However, the recently shake up of the UK immigration system could have a significant impact to this. Whilst the reform aims to ‘balance out’ immigration to the UK, it is anticipated to potentially have a significant impact within the construction industry.
Under the new Points-Based Immigration System, applicants will be required to meet 70 points across a range of factors. The system will award points for specific skills, professions, salaries or qualifications/attributes, and visas will be awarded to those who gain sufficient points.
The new system will give top priority to those with the highest skills and greatest talents including scientists, innovators and academics. Arguably, skilled architects and roles at a similar level within construction will be included within this.
In addition, the minimum general salary threshold will be reduced to £25,600, down from the previously proposed £30,000.
What impact will this have on the construction industry?
European Union nationals make up 8% of the UK’s construction workforce - well over 175,000 people - and uncertainty about their future is impacting on building, according to recent RICS figures.
In a climate where recruitment of lower paid workers into construction is challenging, having the tap turned off to what has been a reliable source for labour will undoubtably contribute to a staffing problem.
The Confederation of British Industry (CBI) warned that construction companies are likely to be among the group of those most affected by the changes.
IPPR warned that businesses such as hotels, restaurants and construction firms will find it particularly difficult to recruit EU workers under the new system.
Brian Berry, the head of the Federation of Master Builders, said that due to the changes, the country risked falling behind on big projects like HS2. He also explained:
If we are to have an infrastructure revolution and build a million new homes over the next five years, we will need to have an immigration system that allows for key construction workers of all skill levels to come [to the] UK of all skill levels.
Today’s announcement that there will no longer be a route for “low skill” workers to come to the UK after next year will hamper the construction industry’s capacity to deliver on key projects.
We will need general labourers as much as architects or surveyors. They are a core part of the construction industry and it’s simply unrealistic to assume the domestic workforce will fill this gap in the next nine months.”
We will be watching this very closely to see how the industry reacts and the impact that this will have on the system. Undoubtably the construction industry will need to adapt however with only ten months to prepare, arguably that is just not quite long enough.