It’s been almost a month since the publication of Housing for All, the Government’s landmark housing plan. Having had time to reflect on the plan which aims to create 300,000 new homes by the end of the decade, we wanted to share some further insights on the measures.
KPMG Future Analytics is pleased to note the justly expansive nature of the actions, which cover all facets of the built environment, and involves the collaboration of a large range of actors including government departments, local authorities, State agencies and industry representative bodies. These groups now have a clear mandate to work together in common purpose and deliver on the housing needs of all people living in Ireland.
Improving construction productivity
A key principle in Economic Analysis of Productivity in the Irish Construction Sector’ (referred to as the Construction Productivity Report) (2020), prepared by KPMG Future Analytics for the Department of Public Expenditure and Reform (DPER), is the requirement for meaningful partnerships and mutually supporting relationships between the many public and private organisations who are involved in developing our built environment. We are particularly encouraged to note learnings from this report, which was published in early 2020, are clearly reflected among the suite of actions now committed to under Housing for All. While the Construction Productivity Report was published prior to the pandemic, and the sector has since faced unprecedented new challenges, the core issue of low productivity remains a threat to the delivery of housing. In this note, we take a brief look at some of the issues identified as barriers to productivity in our 2019/2020 research and highlight how they are now being addressed in Housing for All.
A resilient framework
To achieve housing for all - which means, delivering on average 33,000 new homes every year to 2030, built to a high standard, in the right place, offering a high quality of life and available to either purchase or rent at an affordable price; - four pathways are set out:
- supporting home ownership and increasing affordability;
- eradicating homelessness, increasing social housing delivery, and supporting social inclusion;
- increasing new housing supply; and
- addressing vacancy and efficient use of existing stock.
With supporting actions, responsibilities and targets clearly assigned, and the largest ever housing budget in the history of the state, a robust enabling framework for a more sustainable housing system is presented. But central to all four pathways is the requirement for a high functioning construction sector – with pathways 3 and 4 heavily dependent on productivity in the sector.
Innovation is essential
In preparing the Construction Productivity Report, labour shortages and skills shortages issues were continually highlighted to KPMG Future Analytics as undermining progress and productivity. With Covid, progress on addressing these deficits has been painfully slow, and this remains a significant barrier. As plainly stated in Housing for All, to deliver more housing, more people are needed to build them. In fact, in excess of 27,500 additional workers are required to meet the targets. The retention of the current labour force, the provision of new apprenticeships, training, and education opportunities to attract people into the sector, are among the measures cited to support this.
Within the Housing for All plan, Housing Policy Objective (HPO) 16 to Improve Sector Innovation and Attractiveness gives focus to actions set out in the Building Innovation Report (BIR) (2020) to increase innovation and output in the sector. The BIR actions, which were informed by and based on the KPMG Future Analytics report and now reinforced in Housing for All, include ‘the need for industry to improve and promote the attractiveness of careers in the construction sector through a coordinated marketing campaign targeted at school leavers, and other career changers, as recommended in the BIR’ (Action 16.2). Others, such as Action 16.4, led by DETE and Enterprise Ireland, target innovation through the establishment of the Construction Technology Centre by Enterprise Ireland, with a priority focus on residential construction.
Collaboration & productivity
Well established collaborative partnerships such as the Construction Sector Group (CSG), will play a crucial role in ensuring recruitment endeavours are successful, and that higher levels of productivity and innovation actually materialise. Enhanced roles and funding for the CSG and the Construction Technology Centre (currently being developed) is positive and will strengthen the focus of the sector to resolve other long-standing issues that affect productivity, not just in construction, but in the wider built environment sector, such as, for example, the planning system.
Indeed, a key recommendation of the Construction Productivity Report was to improve elements of the planning system, and this remains an important focus area in Housing for All. Introducing e-planning in all local authorities (Action 13.8), the digitalisation of housing and planning services (Action 24.2) and the Office of the Planning Regulator (OPR) designated action to roll out a programme of learning and development for the planning service (Action 13.9), are just three actions, which were also identified, through extensive consultation, as central to enhancing productivity in the Construction Productivity Report.
Training & outreach
Enhanced technological and innovation capacity in areas such as Building Innovation Modelling (BIM), Modern Methods of Construction (MMC) and Circular Economy Construction (CEC) are directly related to increases in productivity, and in turn can greatly accelerate housing development in Ireland. In this regard, measures such as those set out in Action 23.9 are important, ‘Promote a culture of compliant, good quality sustainable innovation in residential construction through development of Modern Methods of Construction (MMC), including establishment of a demonstration part for MMCs’. However, our research in 2019 for the Construction Productivity Report showed that despite a huge appetite to embrace innovation in areas such as modern methods of construction (MMC), a low uptake of funding and training supports for technology and innovation development, undermined progress in the area. Therefore, targeted training and outreach programmes and potentially incentivisation is required to fully engage an already stretched labour force.
Complex procurement arrangements and contracting challenges highlighted in the Construction Productivity research, are also addressed in Housing for All with a focus on supporting social housing delivery by calling on, for example, the Office of Government Procurement (OGP) to consider options for more flexible approaches to procurement to help expedite social housing delivery (Action 24.9).
A sustainable future
The inefficient treatment and management of construction waste was another major issue addressed in the Construction Productivity Report. The construction sector is responsible for a significant level of waste which requires careful treatment and management to minimise any environmental impact. With coordinated enhancements in digital technologies, circular economy initiatives for renovation and maintenance, including the traceability of materials for future re-use and recycling, can be facilitated, thereby addressing the costly problem of construction waste. There are huge opportunities here, not only for new builds, but also for retrofits and refurbishments in our existing housing stock.
The importance of maintaining high levels of productivity in the construction sector so that a faster pace of housing delivery in Ireland can be achieved is well recognised and addressed in Housing for All. The similarity of actions to those documented in the Construction Productivity Report and reinforced in BIR, is also testament to the commitment by Government and wider parties to pursue truly joined up and collaborative approaches to enhance productivity, as part of the wider, comprehensive package for solving the housing crisis and ensuring accessibility for all.
Get in touch
The pace of change is challenging leaders like never before. To find out more about how KPMG perspectives and fresh thinking can help you focus on what’s next for your business or organisation, please get in touch with William Hynes or Maria Rochford of our Future Analytics team. We’d be delighted to hear from you.