UK Constructions 3% Margin Barrier

So figuring out the rest, let's help them along a little bit with our three headlines.

Let's get into this episode, shall we? And the first one is from building.co.uk.

It's something you touched upon, as a lot of these stories will be.

But this is Burnham's pivot to council house building risks an immediate drop in delivery.

And what we're covering here is the Labour's shift to council-led social housing, and it's intended to help the housing crisis.

But this is a piece by Richard Cherry, the executive chair of Stonebond, and he highlights the fact that our councils, prepped and primed and ready to deliver on these houses, are what's your thoughts on this? I'm reading it and I'm thinking, yeah, there's a certain collaboration that needs to go on here because I don't think councils are primed and prepped to deliver on this scale that we're looking at.

Yeah, you took the words out of my mouth, Pete.

I was going to say that the very short answer to that question is no.

If you were to pivot wholesale into a council house building program, I'd less than a handful well in fact that's a perfect example absolutely less than a handful I can't remember if we've touched on it on the podcast previously but when to bring people back up to date, the social and affordable house building program that's been announced, there's a 39 billion pot of money over the course of the next decade that has been allocated for that.

And the first tranche of that, 9.6 billion has been announced along with the recipients of it.

And I think because of Burnham's rhetoric in coming into Downing Street, Lots of people were prepped for that to be going exclusively to council house builders.

And I think to the author's point within building that it had that have happened, I think 100% that would have been alarm bells that the work needed to build out capacity and to recruit and to sort of formalize plans for that, I think would have been an absolute nightmare.

I think you'd have had delivery at a standstill pretty much.

Right.

The flip side is that a lot of the criticism when those names were announced, other than individual names like Vistri for reasons that I won't go into, but I think there were 50 organizations that funds were allocated to for these 60-odd thousand units to be built.

And only three of them were local authorities.

Some of the smaller sums that were allocated, the rest were... a lot of the time, it was your large national house builders, a couple of kind of public-private partnerships.

But yeah, the fact that, and again, one of the things that came out in the wash afterwards as a result of that criticism was that that initial wave of funding allocated was smaller than was originally planned because Burnham and team had kind of got around it and thought exactly that, that, we cannot give this much money to a council house building market that is not ready to be able to deliver against it.

So it feels like, um, a pragmatic first step rather than a, just a bold sort of ideological swing.

Um, so, so yeah, I kind of, that's why I didn't, it's probably one of the first pieces in a while really where I've kind of, I've not, fully understood where the authors come from on this because I think...

Sorry, that's not fair.

I understand the point in kind of broad terms and I think it's correct, but then when I look at how funds have been allocated and, again, they've only allocated a quarter of the overall budget to be delivered, I actually think the steps taken are fairly sensible.

Again, for only... three local authorities out of the 50 names allocated, yeah, that feels reasonable.

And again, one assumes that those three local authorities have only been nominated and had funds assigned to them because they demonstrated that they are capable of delivering to the levels required.

And if they can't, again, one assumes that they wouldn't be eligible then for any of the further three quarters of the funding available as part of SAHP.