An economist from the Building Cost Information Service (BCIS) has poured scorn on Labour’s ambitious housebuilding plans, saying they have no way of controlling supply.
The BCIS provides cost and price data on the UK construction industry.
Dr David Crosthwaite, its chief economist, said: “The Labour Party’s manifesto pledge to build 300,000 new homes a year, 1.5 million over the election cycle, is a lofty ambition and nothing else.
“The vast majority of new homes are built by private property developers who control the supply to maximise their returns. Over the last few decades, many governments have tried to influence the number of new homes being built, but most have failed.
“Simply put, they have no lever to control the supply. Flooding the market with new homes would not be in the best interest of the property developers and the only way the government could influence supply would be to build themselves, which they used to do when local authorities employed direct labour to build social housing. But this option seems unlikely given the current state of the public finances.”
Labour also targeted increasing the number of planning officers and streamlining the approvals process.
Crosthwaite added: “Again, this is unlikely to be a quick fix as it will take time to source and recruit planners into the public sector, years rather than months, assuming that the skillsets are actually available.”
However he was more positive about Labour’s proposals to establish a National Infrastructure and Service Transformation Authority (NISTA), with the aim of streamlining project planning, design, and costing by merging the existing Infrastructure Projects Authority (IPA) and the National Infrastructure Commission (NIC) into a new entity.
He said: “The intention would be to ensure that investments are not just a series of disconnected projects, but part of a cohesive national strategy.
“Now this does seem sensible given the series of project delays and cost overruns in major public projects over the recent past.
“Improving the public client’s capacity, capability and accountability in major project delivery would be a positive move in attempting to ensure best value for public funds.”
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