Why does it matter?
The construction industry is one of the largest in the UK, with over 2 million people working in it - contributing over £90bn to the UK economy.
The key construction areas in the coming years will revolve around housebuilding and continued improvements in national infrastructure, particularly roadbuilding and railways.
What role do the self-employed play?
Whether it’s freelancers providing short term services on sites, or small businesses providing services and materials, those working independently are essential to the success of the construction industry. There were 810,000 self-employed in this industry at the end of 2013 (the largest number in any sector) and these numbers rose further through 2014.
Self-employed members of this sector are key, as they:
- Provide businesses with the opportunity to bring in and release highly skilled labour at short notice and on a basis that suits the project that is being undertaken
- Enable projects to be completed with lower levels of worker downtime, and with reduced levels of costs due to “employment through necessity”
- Offer higher levels of output, and often higher degrees of skill than employed workers as they work to time/productivity outlines
What issues do the self-employed face?
Late payment – major problem in a very mobile industry
- Difficulty managing credit for business and personal matters
- Time wasted chasing after payments instead of completing/finding contracts
- Damaging to business relationships and detrimental to image of a small business
Construction Industry Scheme – taxation scheme covering subcontractors in the sector
- The system has been operating in a similar manner for a number of years and is consistently described as onerous by contractors and subcontractors
- System requires continuous paperwork to be kept up with on the subcontractors side - elements of system have slowly become digitalised but this needs to continue
Skills shortages – High levels of demand for skilled workers cannot be fulfilled in the future with the available labour force, coupled with a lack of new workers entering the industry
- Current skilled labour market in the construction industry is heading towards saturation
- Not enough young people are being encouraged into the industry, due to lack of perceived stability and low starting wages.
- Lack of skilled labour will prevent the high levels of planned infrastructure and housing from being completed
So what are IPSE’s plans going forward?
IPSE entered the construction sector in 2015 and we will be keeping track of changing policy issues in the industry such as travel and subsistence allowances, apprenticeship levies and planning laws; as well as completing detailed research on the sector.
IPSE has agreed a deal with Hudson Contract to give a greater voice to the self-employed in the construction industry. In turn this will enable IPSE to use the 48,000 associate members of Hudson to gain data on the biggest challenges in this sector.
We have created a ‘Construction Advisory Committee’, enabling the main issues within the industry to be discussed with leading figures including Hudson's Chairman David Jackson. The committee will establish areas of the industry which IPSE may be able to work with in the future, and to solidify its relationship with Hudson.