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Economists from the British Building Cost Information Service (BCIS) have slammed Labour’s ambitious housebuilding plans, saying there is no way to control supply.
BCIS provides cost and price data on the UK construction industry.
The party’s chief economist, Dr David Crosthwaite, said: “Labour’s manifesto promise to build 300,000 new homes a year, and 1.5 million over the election period, is nothing less than a lofty ambition.
“The majority of new homes are built by private property developers who control supply to maximise their profits. Over the past few decades, many governments have tried to influence the number of new homes built, but have largely failed.”
“Simply put, they have no way of controlling supply. Flooding the market with new homes is not in property developers’ best interests and the only way governments can influence supply is to build it themselves, which is what they did when local authorities used to employ workers directly to build social housing. However, given the current financial situation, this option is unlikely.”
Labour also aimed to increase the number of planning officers and streamline the approval process.
Crosthwaite added: “Again, this is not going to be a quick fix because sourcing and recruiting planners into the public sector takes years, not months, assuming the skillsets are actually available.”
However, he was more positive about Labor’s proposal to create a National Infrastructure and Services Transformation Agency (NISTA), which would aim to streamline the planning, design and costing of projects by merging the existing Infrastructure Projects Agency (IPA) and National Infrastructure Commission (NIC) into a new body.
He said: “The aim is to ensure that investment is part of a coherent national strategy and not just a series of disconnected projects.”
“Given the string of project delays and cost overruns on major public works projects in recent years, this certainly seems to make sense.
“Improving the capacity, enablement and accountability of public clients in the delivery of major projects will be a positive move to make the most of public funds.”