BANK OF ENGLAND REDUCES INTEREST RATES

Monetary Policy Summary, February 2025

The Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. The MPC adopts a medium-term and forward-looking approach to determine the monetary stance required to achieve the inflation target sustainably.

At its meeting ending on 5 February 2025, the MPC voted by a majority of 7–2 to reduce Bank Rate by 0.25 percentage points, to 4.5%. Two members preferred to reduce Bank Rate by 0.5 percentage points, to 4.25%.

There has been substantial progress on disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilised longer-term inflation expectations. That progress has allowed the MPC to withdraw gradually some degree of policy restraint, while maintaining Bank Rate in restrictive territory so as to continue to squeeze out persistent inflationary pressures.

CPI inflation was 2.5% in 2024 Q4. Domestic inflationary pressures are moderating, but they remain somewhat elevated, and some indicators have eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further. While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.

GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined. GDP growth is expected to pick up from the middle of this year. The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened. As a result, the recent slowdown in demand is judged to have led to only a small margin of slack opening up.

In support of returning inflation sustainably to the 2% target, the Committee judges that there has been sufficient progress on disinflation in domestic prices and wages to reduce Bank Rate to 4.5% at this meeting.

Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate.

In addition to the risks around inflation persistence, there are also uncertainties around the trajectories of both demand and supply in the economy that could have implications for monetary policy. Should there be greater or longer-lasting weakness in demand relative to supply, this could push down on inflationary pressures, warranting a less restrictive path of Bank Rate. If there were to be more constrained supply relative to demand, this could sustain domestic price and wage pressures, consistent with a relatively tighter monetary policy path.

The Committee will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy. Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further. The Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.

COMMENTS
David Hannah, Group Chairman of Cornerstone Tax
High interest rates have impacted the UK’s property market to an enormous extent. This has resulted in burdensome mortgage costs for first-time buyers, the collapse of supply within the private rental sector, unprecedented increases in rental and home-buying costs, as well as a record number of landlords leaving the market due to the soaring costs of managing their properties.
The decision today from the BofE does come as welcome news, however,  the monetary policy committee must aim for a 3-3.5% base rate to stimulate private development, incentivise first-time buyers and restart the private rental sector. David also offers expert analysis below on how today’s announcement impacts Britain’s property industry.

Rachel MacCutchan, Sales Director for Morris Homes:

“The Bank of England’s (BoE) interest rate cut is welcome news for prospective homeowners, helping to open up more opportunities for them on the property market.

“We’ve seen Barclays Bank react already by reducing its rates and expect more to follow, which will lead to more affordable mortgages, make houses more accessible, and increase confidence in the housing market.  

“The BoEs decision comes at a perfect time as we recognise New Homes Week, marking a positive move which will help people take their first step on the property ladder. At Morris Homes, we’re here to support them to do this.”

Nathan Emerson, CEO of Propertymark, comments:

“Despite widespread uncertainty and the Bank of England expecting inflation rates to increase to 2.8% by the third quarter of 2025 before easing again, today’s announcement comes as welcome news for many.

“It’s now likely that mortgage borrowing takes the same path and dips slightly which will, in turn, help ease the strain on people’s finances and improve their chances of homeownership. This extra boost in affordability and confidence is needed, and we look forward to hopefully seeing new and improved mortgage products enter the market over the coming weeks.”

 Daniel Austin, CEO and co-founder at ASK Partners, said:

“The Bank of England’s decision to lower interest rates to 4.5% marks a pivotal moment for the UK real estate market. While this move may provide some relief for borrowers, the broader impact will depend on how quickly lenders adjust mortgage rates and how sustained the rate-cutting cycle becomes. For homeowners and prospective buyers, lower rates should, in theory, make mortgages more affordable. However, the current market dynamics, where fixed mortgage rates have remained elevated despite previous signs of easing, suggest that any immediate impact may be muted. That said, a more stable rate environment could help restore buyer confidence, particularly among those who had been waiting for clarity before entering the market.

“For investors and developers, the trajectory of rate cuts will be crucial. With inflation now closer to the Bank’s 2% target, there is renewed optimism that financing conditions will improve, unlocking capital for new developments. Demand remains strong, particularly in sectors like co-living and build-to-rent, where supply constraints continue to drive investor interest. As we approach a potential shift in government policy and economic strategy, real estate stakeholders should remain agile. If rates continue to fall towards 3.5% by year-end, as some predict, this could fuel a more sustained recovery in transaction volumes and investment flows. However, uncertainty remains, and prudent financial planning will be key as the market navigates this transition.”

Peter Stimson, Head of Product at the mortgage lender MPowered, commented:

“What matters here is not the decision, it’s the vehemence with which it was taken.

“The markets had regarded a 0.25% rate cut as a nailed-on certainty. But what has raised some eyebrows is the strength of feeling among the Bank of England’s ratesetters.

“The only two dissenting voices on the Bank’s nine-member committee wanted to cut more, not less, off the Base Rate.

“All of which will lend credence to the idea that a flurry of further base rate cuts could be on its way. The swaps curve – which ultimately determines how lenders price their mortgages – is currently suggesting that we could see a further three base rate cuts by this time next year.

“Swap rates can ebb and flow, but nevertheless the fact that the markets are now anticipating three more cuts should enable lenders to start trimming the rates they offer customers.

“January is traditionally a time of intense rate-cutting as lenders slug it out for market share, but last month’s competition was relatively subdued. That could now change.

“Demand from borrowers is strong, and separate data from the Bank of England showed the number of mortgage approvals jumped unexpectedly in December. Today’s decision may not open the floodgates immediately, but competition could heat up sharply in the coming weeks as lenders battle for borrowers’ business.”

Jonathan Hopper, CEO of Garrington Property Finders, commented:

“The prospect of cheaper mortgages will give a decisive nudge to thousands of would-be buyers who kept their powder dry in 2024.

“In normal times a reduction in borrowing costs can prompt those planning a move to inch up their budget, and the result tends to be rising house prices. This time, not so much.

“While there is plenty of demand from buyers, the abundance of homes for sale is keeping price inflation in check.

“Many buyers remain intensely price-sensitive, and as they survey a market in which they’re often spoilt for choice even in prime areas, some are happy to walk away from homes they like but feel are overpriced.

“The Bank’s decision has tipped the scales further in favour of buyers, but the inflationary consequences may be more muted than usual.”

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Construction Activity Falters in January

All three categories of construction work see a reduction in output during January

Renewed downturn in construction order books Cost inflation accelerates to a 21-month high

A modest fall in total industry output was recorded at the start of the year, thereby ending a 10-month period of sustained expansion. Shrinking order books and rising cost pressures contributed to the weakest business activity expectations since October 2023.

At 48.1 in January, down sharply from 53.3 in December, the headline seasonally adjusted S&P Global UK Construction Purchasing Managers’ Index™ (PMI®) – an index tracking changes in total industry activity – registered below the 50.0 no-change threshold for the first time since February 2024.

Construction companies cited delayed decision-making by clients on major projects and general economic uncertainty had weighed on business activity at the start of 2025. A number of firms also commented on the impact of subdued market conditions in the residential building sector. Latest data showed that house building (index at 44.9) decreased for the fourth successive month and at the fastest pace since January 2024.

Civil engineering activity (44.6) declined at a relatively sharp rate, although this partly reflected disruptions from unusually wet weather at the start of the year. Meanwhile, output in the commercial construction category also returned to contraction in January (48.9). This was linked to a lack of tender opportunities and a reluctance among clients to commit to new projects.

January data pointed to a decline in incoming new work for the first time in 12 months. Although only modest, the rate of contraction was the steepest since November 2023. Anecdotal evidence suggested that a lack of confidence among clients and worries about the UK economic outlook had contributed to fewer sales enquires.

Purchasing activity decreased for the second month in a row, reflecting weak order books and a lack of new work to replace completed projects. Despite softer demand for construction products and materials, the latest survey indicated the steepest rise in input costs since April 2023. Construction companies noted that suppliers had sought to pass on rising energy, transportation and staff costs. Moreover, vendor performance deteriorated to the greatest extent for two years, which was partly linked to shipping delays.

Sub-contractor charges increased at an accelerated pace in January, with the rate of inflation hitting a 21-month high. This was despite a reduction in sub-contractor usage for the fifth time in the past six months. Construction firms meanwhile signalled renewed cutbacks to their staffing levels. Employment decreased for the first time since August 2024, but the rate of decline was only marginal.

Finally, around 38% of the survey panel predict a rise in business activity over the year ahead, while only 17% forecast a reduction. However, this pointed to the lowest degree of business optimism since October 2023. Survey respondents cited a post-Budget dip in confidence among clients, alongside weakening sales pipelines and the impact of lacklustre domestic economic conditions.

 

S&P Global UK Construction PMI®

Comment

Tim Moore, Economics Director at S&P Global Market Intelligence, said:

“UK construction output fell for the first time in nearly a year as gloomy economic prospects, elevated borrowing costs and weak client confidence resulted in subdued workloads.

“Output levels decreased across the board in January, with particularly sharp reductions seen in the residential and civil engineering categories.

“Construction firms noted the fastest fall in residential work for 12 months as market conditions remained somewhat subdued. Anecdotal evidence suggested that caution regarding demand for new projects was prevalent at the start of 2025, despite strong policy support for house building and hopes for a longer-term boost to supply via planning reform.

“The forward-looking survey indicators were also relatively downbeat in January. New orders decreased at the fastest pace since November 2023 amid many reports of delayed decision-making by clients. Reduced workloads, combined with concerns about the general UK economic outlook, led to a dip in business activity expectations to the lowest for 15 months.

“There was little respite on the supply front, as transport delays meant that vendor lead times lengthened to the greatest extent for two years. Demand for construction items softened again in January, but purchase price inflation was the highest since April 2023 as suppliers sought to pass on rising energy, fuel and wage costs.”

Josh Ward-Jones, director of Bloom Building Consultancy, commented:

“The warning lights on the construction industry dashboard have switched from amber to red.

“In fact there’s precious little to cheer about in January’s PMI data, which shows a clean sweep of negative trends. Both output and orders are down, cost pressures are rising and sentiment is sliding.

“For much of 2024, the weakness of the housebuilding sector was offset by the buoyancy of commercial construction. No longer. January’s headline figure slipped into contraction territory for the first time since last February.

“The pipeline of new work is starting to get patchy too. While the decline in new orders was modest, as the first reversal in 12 months it cannot be dismissed as inconsequential.

“Many are blaming the slowdown in demand on the hit to business confidence seen in the wake of last October’s Budget. Companies worried about their business prospects and the impact of April’s jump in Employer NI Contributions have been quick to pause or rein in capital spending.

“This slowdown is being reflected in construction firms’ sentiment too. The PMI survey found that just 38% of contractors expect business activity to increase over the next year – the lowest level since October 2023. As recently as a month ago, the figure stood at almost half.

“Yet while there has been a cooling in new construction work, demand for refurbishment and upgrade work remains brisker. And though cost pressures are eating into contractors’ margins, the Bank of England could offer some relief later today if it cuts interest rates as expected.

“Cheaper finance costs would be a welcome salve for an industry which has made a fragile and cautious start to 2025.”

Jordan Smith, technical director at Thomas & Adamson, part of Egis Group, said:

“The overall construction PMI reading falling into negative territory for the first time in nearly a year is not unexpected – accelerating cost inflation, weaker economic conditions, and higher borrowing costs have slowed the sector’s recovery. And, despite policy support for the likes of housebuilding and civil infrastructure, these are seeing some of the weakest levels of activity on the ground.

“Still, we expect to see further detail about the government’s spending plans in the coming months and would hope that this will provide much-needed stimulus to the sector – particularly areas that have struggled recently. It is also worth noting that, on balance, more firms continue to predict a rise in activity during 2025 than a fall.

“Similarly, we have experienced a strong start to 2025, with a pipeline of projects emerging throughout the year across various sectors. So, while the short-term picture remains a little unclear, there are good reasons to remain optimistic about the medium and long-term”

 

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In-depth safety video about neutral current diversion

SELECT releases new in-depth safety video about neutral current diversion as it continues to spearhead awareness campaign as part of 125th anniversary

 

Scotland’s largest construction trade association, SELECT, has continued its awareness campaign on the issue of neutral current diversion (NCD) by releasing an in-depth guidance video to help keep electricians and their customers safe.

 

Produced in partnership with the Institution of Engineering and Technology (IET), Safety Checks for Neutral Current Diversion delivers a step-by-step guide to the potential dangers of NCD, how to test for it and how to deal with it if discovered.

 

The 20-minute resource is now available to view on the SELECT YouTube channel and is the latest step in the trade body’s campaign to raise awareness of the issue as it celebrates its 125th anniversary as the world’s oldest electrical trade association.

 

Bob Cairney, Director of Technical Services at SELECT, said:

“NCD constitutes an unknown risk that has huge safety implications, so we are keen to equip electrical contractors with the necessary knowledge to identify it and take action where necessary.

“This video is designed to give an easy-to-follow overview of the issue, combined with practical steps to dealing with it safely and swiftly.

“We are grateful to the IET for their assistance in making this resource and hope it will be shared widely to help raise awareness further throughout the industry.”

 

Presented by Steven Devine and Darren Sweeney, the video explains how NCD occurs when protective measures fail and current is diverted via exposed metal fixings such as gas, water and oil pipes. Identified as a particular issue in multiple occupancy buildings, the duo explain how this can lead to a build-up of heat that could result in fire or explosion.

Steven and Darren then demonstrate a range of tests for NCD, highlighting the many factors that contractors should be aware of, before the video ends with an animated testing walkthrough, adapted from SELECT’s original flowchart.

Mr Cairney added:

“As well as our colleagues at the IET, we would also like to thank all the other senior figures from across the industry who have contributed feedback and technical insights during the video’s creation.

“As Scotland’s largest construction trade body, we are committed to the safety of electricians and their customers and will continue to lead the way with further resources and information to raise awareness about the issue of NCD.”

 

The video follows a suite of practical NCD resources produced by SELECT for members, apprentices and trainees, including posters for workshops and training centres, a digital flowchart and a pocket-sized foldout designed to be kept in toolboxes.

 

NCD was also one of the key topics at the association’s Toolbox Talks in 2024, with briefings delivered to hundreds of contractors across Scotland.

The activity also inspired West Lothian College lecturers Thomas Barlow and Scott Cavanagh to devise and build their own interactive fault board that gives young learners the chance to learn how to test for NCD.

 

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Meeting Edinburgh’s Housing Demands

The UK’s leading social enterprise, Places for People, has secured land on the outskirts of Edinburgh to bring forward over 1,300 new homes.

The organisation who supplied over 1,700 new homes in the last year acquired the 110-acre site from Murray Estates in its ambition to deliver more new homes to meet rising demand across the Scottish capital.

Situated west of the city centre, the site provides fantastic transport links as well as education, leisure and employment opportunities nearby.

Colin Jack, Regional Managing Director – Scotland of Places for People Developments, comments:

“The City of Edinburgh and the Scottish Government have declared a housing emergency. This is a sign that for too long Scotland has failed to address our chronic shortage of homes being built. We are ready to help address this, and it is why we’re thrilled to play a part in developing the west of Edinburgh. This site will see over 1,300 new homes being brought forward in much needed mixed-tenure communities. Using our team’s extensive housebuilding background, we can create communities that last for generations to come.”

Taking the principles of new town living, Places for People are preparing a Masterplan for the site in line with the Edinburgh City Plan 2030 which could include, but is not limited to:

  • A broad mix of housing types to suit local needs from 1-bed apartments up to 5-bed family homes
  • Over 1,300 new homes delivered across the site
  • A substantial number of new homes built will be affordable homes across a range of tenures
  • Plenty of useable greenspace with a landscaped linear park running through the development
  • New employment opportunities during the ten-year construction period as well as after
  • New educational provisions, including a primary school
  • Greater connectivity to the city centre through improved links to cycles paths along with tram, train and bus routes.
  • Local commercial centre

David Murray, managing director of Murray Estates’ owner Murray Capital, said:

“As a family business that has owned this site for 40 years, we’re pleased to see our vision for Redheughs taken forward by an organisation committed to creating sustainable, high-quality communities.

“It’s nearly 10 years since we first applied for outline planning approval, so this transaction also unlocks capital that we can invest in new projects that support our ambitions as a patient, entrepreneurial business.

“This is the first phase of the broader Edinburgh Garden District, which is a key part of the western expansion of the city. We look forward to seeing west Edinburgh come to life and contribute thousands of new homes the capital so desperately needs. We retain other strategic land holdings in the area – including 500 acres of the Garden District – and will look to develop options for these over the coming years.”

As a social enterprise, Places for People will also look to boost social impact activities across Scotland. In addition to promoting apprenticeships, local labour schemes and training opportunities through the development, they will look to supplement existing schemes in Edinburgh including the Hays Community Pantry and the Tools for Equity project. In partnership with their subsidiary Places Leisure, they will also deliver additional physical activity sessions, extend the Relational Mentoring Project in partnership with Wise Group and form new partnerships with charities to address challenges in local communities.

Colin concludes:

“With the scale of our organisation, we know how important access to affordable housing is and our unique model supports us in delivering places that allow people to flourish. We don’t just build homes; we create communities that allow people to connect. Through our partnerships with local charities and businesses we strive to bring a place to life and ensure the community has access to services and resources that they need. We will now work closely with Edinburgh City Council to bring our aspirations to fruition.”

Plans will see homes being built from Summer 2026.

 

 

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Prison Sentence for £22 million fraud against the taxpayer

Seven construction company connected insiders have been sentenced for their key role in a £22 million fraud against the taxpayer.

Daniel Newton, 38,  Philip Bailey, 36, Sean Dean, 41, Lee Hudson, 56, Sarah Gillard, 41, Bradley Mortimer, 39, and Kevin Ratcliffe, 43, have been sentenced to nine years and four months imprisonment, six years and three months imprisonment, seven years imprisonment, five years imprisonment, two years imprisonment suspended, three years and six months imprisonment, and 27 months imprisonment, respectively for cheating the public revenue, money laundering related offences, acquiring criminal property and organised criminal gang activities.

The Crown Prosecution Service worked closely with Kent Police and HMRC to build a case for trial that showed that the defendants were involved in the setting up of a building construction core company which invoiced customer companies for supply of labour which included VAT elements on these bills.

The customer companies would pay these invoices but the construction company would not pay the VAT and Construction Industry Scheme contributions to the HMRC, part of His Majesty’s Treasury. It is estimated that there was a loss to the Government and taxpayer of £22 million.

The unpaid VAT and scheme contributions were diverted to the bank accounts of the defendants who were beneficiaries of these fraudulent actions.

The beneficiaries included the lead conspirators Philip Bailey, Daniel Newton, and Sean Dean who were responsible for establishing, maintaining, and developing these crimes. Kevin Ratcliffe was a customer company director who received ‘kickbacks’ in exchange for providing their business to the core company. Lee Hudson was an office worker who was conducting the day-to-day business which enabled these offences. Sarah Gillard and Bradley Mortimer functioned as cash couriers for money laundering for these illicit activities.

Julius Capon of the Crown Prosecution Service said:

“These criminals stole £22 million from the taxpayer. Fake payroll companies were created and operated by Bailey, Newton, Hudson, and Dean.

“Construction companies would permit these payroll companies to make VAT and Construction Industry Scheme (CIS) contributions to HMRC on behalf of their sub-contractors.

“Instead of the VAT and CIS contributions being paid to HMRC, the defendants pocketed the monies themselves.

“The defendant Ratcliffe owned a construction firm which received cash ‘kickbacks’ for assisting in this illegal enterprise of cheating the revenue. The defendants Gillard (partner of Philip Bailey) and Mortimer laundered the proceeds through their bank accounts.

“This is money that is needed to help support our hard-pressed public services.

“The CPS has commenced proceeds of crime proceedings against the defendants to claw back the money they made from this illegal scheme.”

Ian Hackett, Operational Lead, in HMRC’s Fraud Investigation Service, said:

“We have worked closely with Kent Police to dismantle this sophisticated and complex fraud.

“The tenacity and expertise of the investigators involved in this joint investigation has protected millions of pounds of taxpayers’ money, which is needed to fund our public services.

“We encourage anyone with information about any type of tax fraud to report it to HMRC. ”

Our specialist prosecutors will continue to work closely with investigators such as HMRC to prosecute cases of public sector fraud and bring perpetrators to justice.

 

Source: Crown Prosecution Service

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Green Belt Initiative Deemed Ineffective

Lord Moylan, Chair of the Built Environment Committee, has sent a letter to the Deputy Prime Minister summarising the findings of the Committee’s inquiry into the grey belt.

Key findings

Key points from the committees letter include:

  • In 2024, the new Labour government outlined its ambitious plans to address the housing crisis by building 1.5 million new homes. To meet this target, significant changes to the planning system are being made, and the preservation of the Green Belt has been identified as one source of friction which impedes housing development. 

 

  • Published in July 2024, the Government’s draft National Planning Policy Framework (NPPF) proposed designating some areas of the Green Belt as ‘grey belt’ land if they do not sufficiently meet the five defined Green Belt purposes (such as reducing urban sprawl and preserving the character of historic towns). This policy had the potential to release useful land for housing developments. 

 

  • However, the final NPPF, published in December 2024, included revisions to the original proposal that may have rendered the grey belt policy largely ineffective, concludes an inquiry by the Built Environment Committee under the chairmanship of Lord Moylan.  

 

  • The grey belt policy has been introduced at the same time as many other planning policy initiatives, and the interaction of these policies is creating uncertainty for developers, landowners, and already overstretched local authorities.  

 

  • There is also significant uncertainty about the potential number of homes that could be built on grey belt land, with forecasts ranging from 50,000 to 4 million. Moreover, the Committee was concerned that there was no mechanism for tracking progress against the Government’s target of 1.5 million new homes over the next five years.

 

  • The sustainability of housing developments on grey belt sites is crucial to their success, although clear definitions of sustainable locations and modes of transport are missing from the final NPPF. The proximity of grey belt developments to public transport is of particular concern to those who gave evidence to the Committee, but the NPPF does not give sufficient detail on its plans for connectivity and transport infrastructure around these sites. 

 

  • The Committee found that, in principle, the original grey belt proposal had the potential to make a significant contribution towards meeting the Government’s housing targets. However, the cumulative impact of other recently introduced planning policy initiatives, is likely to result in the grey belt policy having only a marginal impact at best. 

Chair’s comments 

Lord Moylan, Chairman of the Built Environment Committee during the inquiry, said: 

“Last autumn our committee launched this inquiry into ‘grey belt land’ because the committee believed that this new category could make a positive contribution to meeting housing targets.”  

“The Government’s policy been implemented in a somewhat rushed and incoherent manner. The committee does not believe that it is likely to have any significant or lasting impact on planning decision-making or helping the Government achieve its target of building 1.5 million new homes by the end of this Parliament.” 

“In December the Government published the final NPPF and the revisions it has made to the framework have now made the concept of grey belt land largely redundant as land will now be more likely to be released from the Green Belt through existing channels instead.” 

“The Government also does not seem to have any plan to measure progress or determine the success of this policy. Effective policy must be evidence based and be able to demonstrate its efficacy. Sadly, this is not the case here.” 

Source: UK Parliament

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Fundemental Reset needed by Industry Training Board

An independent review commissioned by the Department for Education has called for a ‘fundamental reset’ of the current Industry Training Board model to safeguard growth.

The review, Transforming the Construction Workforce, led by industry expert Mark Farmer and published by the government last week, said the current system is not effectively addressing the construction sector’s needs and that a more strategic, unified approach is necessary to build a more resilient, productive and skilled workforce.

Mark Farmer’s report calls for a “complete rethink” of skills and training priorities to address the construction industry’s “hollowing out” of the workforce.

The review makes 63 recommendations to transform how the industry approaches workforce development. The Department for Education’s response accepted 34 recommendations without amendment, and partially accepted or accepted in principle 26 recommendations.

The review calls for a pivot from focusing solely on new entrants and apprentices, to a “whole workforce” approach that includes upskilling and reskilling existing workers.

Industry Training Boards (ITBs) need to deliver more innovative and impactful programmes to drive at-scale improvements in industry competency, productivity, and retention. The review emphasises a need to focus on both the employed and self-employed workforce.

Farmer said:

“There is a sense that many are persevering to make a difference whilst feeling that they are fighting the tide. Collectively we need to think and act differently if we are going to make all this hard work and effort really count going forward.”

He added: “If we are serious about cementing growth and future-proofing the industry, then we cannot ignore the capacity gap that is widening across our construction sector.”

The report highlights that construction has the lowest employment levels since 1998. Since the previous employment peak in 2008, construction employment has fallen by 20%, while the UK’s population has grown by 10%.

“Importantly, we cannot just assume we are going to recruit our way out of this crisis by setting ever more unattainable new entrant targets,” said Farmer. “This review confirms that the industry has a basic attraction and absorption problem that needs to be urgently addressed, but in the meantime, we need to be able to do more with the resources we already have.

“The industry struggles for many different reasons to modernise and improve its productivity but there remains a significant training-led opportunity to raise the capacity and capability of the existing and future workforce.

“I am convinced that with the right leadership from ministers and with a reformed ITB intervention, key parts of the engineering, construction and homebuilding industries will get behind the review’s call to arms and endorse the need to think differently.

“Doing nothing is not an option and there is now a clear and present danger to Britain’s growth plans, which are underpinned by building new housing, infrastructure and green energy sources.”

Recommendations made in the Farmer review include:

  • The ITB model should be retained in terms of its basic statutory mandate but its strategic priorities, core capabilities and activity require wholesale transformation. This all needs to be ruthlessly focused on addressing the fundamental workforce resilience challenges facing the construction and engineering construction industries.
  • The statutory levy-grant system should also be retained but modernised and refocused to ruthlessly drive measurable outcomes linked to the new priority industry challenges. SMART KPIs should be developed aimed at maximising outcomes from levy spending with more balanced accountability between industry and government.
  • A fundamental reset is required across both ITBs (Construction and Engineering Construction) to change both direction and effectiveness. There is a common fundamental challenge which both industries face in terms of declining workforce resiliency resulting in growing workforce gaps and skills gaps and a more strategic and unified approach spanning both industry sectors should be adopted including operational convergence/merger after a suitable transition, minimising disruption to ongoing activities.

Tim Balcon, chief executive of the Construction Industry Training Board (CITB) said:

“Importantly, the report recognises the significant skills challenges facing the construction and engineering industries and the vital role that the ITBs play in helping address these. Further, it asserts that the best way of doing so is to retain the ITB model and industry-specific levies.

“Grant funding for apprenticeships and new entrants is vital, with more than two-thirds of apprenticeship starts in the construction industry being employed by companies of fewer than 50 employees.

“We are already well advanced in improving our engagement with employers and learners, such as the nationwide rollout of our Employer Networks and the significant improvements at our National Construction Colleges.”

Andrew Hockey, CEO of the Engineering Construction Industry Training Board (ECITB), said:

“We welcome closer collaboration with the CITB, particularly in the area of infrastructure skills where there is the most commonality between the ITBs’ respective footprints.

“As the review acknowledges, there is significant benefit in both ITBs collaborating more closely on infrastructure; nuclear new build being a clear example where workers in both civil construction and the engineering construction industry (ECI) work alongside each other.

Brian Berry, chief executive of the Federation of Master Builders, said:

“For too long the construction industry has been plagued by an ongoing skills crisis which is holding back economic growth. The urgent need to build new infrastructure projects and deliver much-needed housing won’t happen unless there is radical review of the training landscape – the Mark Farmer report shows the way forward

Source: Personnel Today

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Connecting talent & opportunity with globalbridge 

   

In 2025, the CEA (Construction Equipment Association) is making significant strides with globalbridge—a platform designed to level the playing field for young people and redefine how talent is discovered. With momentum already building, the goal remains clear: to ensure every young person has the chance to shine while every employer gains access to the diverse skills our industry urgently needs. 

 

What is globalbridge? 

globalbridge was born from a simple yet transformative goal: to provide every young person with a fair opportunity, regardless of their background or connections. The platform empowers students to showcase their skills and achievements beyond traditional grades. It enables them to create multimedia profiles that include projects, videos, and personal highlights—offering a fuller picture of their talents.

This approach extends beyond students. globalbridge also delivers data-driven insights to schools, enabling them to refine their support programmes and identify what truly works. Employers benefit from an innovative opportunity-matching system, bringing the right talent directly to their doorstep while promoting inclusivity and diversity within their workforce.

 

Why it matters to the CEA 

This initiative underlines the CEA’s commitment to addressing the industry-wide skills shortage. By connecting employers with the next generation early, globalbridge creates a fairer, more inclusive approach to talent development. For young people, it’s a gateway to careers within construction equipment and other sectors, showcasing roles that might otherwise remain hidden.

Jacqui Miller-Charlton MBE,  a key supporter of globalbridge and part of the Miller Groundbreaking dynasty, describes it as a “game-changer” for connecting young people with meaningful career opportunities.

 

“We’re absolutely blown away by what the team has achieved so far,” said Jacqui.

 

As the first CEA member company to adopt the platform, Miller Groundbreaking is collaborating with globalbridge to create a seamless application system. At the same time, Jacqui is calling on employers to create more opportunities across the construction sector and beyond.

 

Viki Bell, Director of Operations at the CEA, added:

 

“The skills shortage in our industry is a challenge we cannot ignore. globalbridge offers a practical and innovative solution by connecting employers with young talent and giving students a chance to shine in ways that go beyond traditional grades. It’s an inspiring step forward for workforce development, and we’re proud to support it.” 

 

 

Shaping the future workforce 

globalbridge goes beyond traditional recruitment by actively shaping tomorrow’s workforce. The platform introduces young people to the wealth of opportunities in industries like construction at an early stage.

 

 “Kids are always on their tablets and phones,” Jacqui notes. “globalbridge leverages technology to connect with them directly, providing guidance, inspiration, and a pathway to meaningful careers.” 

 

globalbridge is already making waves across the construction sector and beyond. It is supported by influential partners and strongly focused on innovation. Collaborating with organisations like the CEA ensures its message reaches educators, parents, employers, and policymakers alike.

 

 

A vision for the future 

Jacqui praises the platform for its originality and vision.

 

“globalbridge is truly one of a kind. There’s nothing else out there that connects young people, educators, and employers so seamlessly. It’s a platform that’s ahead of its time, and the vision behind it is extraordinary. Ben has done an amazing job bringing this idea to life, creating a solution that not only opens doors for young people but also helps businesses find the next generation of talent in a smarter, more accessible way.” 

 

 

Join us on 25 February 2025, 12.30-1.30pm, for a webinar exploring myglobalbridge, the platform transforming how young talent connects with industry.

 

Featured guest Jacqui Miller-Charlton MBE will share insights on how globalbridge is helping employers engage with future talent and address the skills shortage.

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MMC: MEETING DEMANDS

Work has started on a new housing development in Somerset to ‘meet the demands’ of a local town. Stonewater development in Frome has been designed to be built quicker and to cut down on disruption while work is taking place.

The Cherry Grove project will provide 24 ultra energy-efficient homes that meet the local demand for affordable, high-quality housing. The homes, designed to meet stringent Passivhaus Trust standards, will be constructed using Modern Methods of Construction (MMC) by Ashcot Construction Ltd to help reduce waste, accelerate build times and minimise disruption on-site.

Passivhaus homes are renowned for their exceptional comfort and energy efficiency, offering a consistent indoor temperature and reducing heating costs by up to 90 per cent. The homes will include fundamental features of Passivhaus standards, including very high levels of insulation, airtight building fabric, high performance windows and doors, and ‘thermal bridge free’ construction that ensures thermal heating of the properties is minimal.

VerdeGO timber frames used in the builds will also provide exceptional durability and sustainability, ensuring the homes are built to last while reducing environmental impact. As well as contributing to Stonewater’s net-zero ambitions, the features support wider sector and government goals to combat climate change, while reducing bills for customers.

Jonathan Layzell, Stonewater’s Chief Officer for Customer Experience and Growth, said:

“We are delighted that the Cherry Grove development will include Passivhaus fundamentals for the benefit of our customers. The project is a testament to our commitment to working with partners to provide not just affordable housing but sustainable, comfortable homes that are more efficient to run.

With the current cost-of-living crisis, these energy-efficient homes will make a meaningful difference to customers’ lives. By integrating sustainability at the heart of our developments, we’re helping to build a greener future. Cherry Grove is an exciting step forward for us, our partners, customers and communities.”

Lee Slade, Ashcot Construction Ltd’s Managing Director, said:

“The combination of Passivhaus principles and modern construction techniques will mean these homes will not only meet, but exceed, expectations for quality, efficiency, and sustainability. We’re thrilled to partner with Stonewater on such an exciting development and to deliver these fantastic homes for local people.”

David Craddock, VerdeGO Founder, said:

“Partnering with Stonewater on this project will ensure that these homes are not only energy efficient for local customers, but importantly are built to last. The precision-engineered design of the timber frames will give residents with a warm, comfortable and cost-effective place to call home.”

Plans for Cherry Grove have been developed in collaboration with Frome Town Council and Somerset Council, forming part of Stonewater’s mission to provide everyone with a place to call home and deliver warm, energy-efficient housing to address the urgent need for affordable homes in the area.

The development, which includes eight two-bedroom flats and 16 two- and three-bedroom houses, will be available for social rent, ensuring affordability for those unable to access housing on the open market. Built on a brownfield site, the homes also reflect Stonewater’s dedication to making the best use of land while reducing environmental impact.

 

Source: Somerset Live

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Flood risk challenges rising

Oxfordshire flood risk challenges rising, warns trade body

Dangerous flash flooding, rising water tables, and insurance difficulties are among the increasing flood risk challenges facing households in Oxfordshire.

This is according to The Property Care Association (PCA), which has called for a strategic approach to flood risk management to encourage better resilience as the UK government aims to fulfil its manifesto pledge of building 1.5 million homes.

Earlier this month, the PCA, which represents the UK’s building protection industry, raised the need for a cohesive strategy for flood risk at planning, community, and individual levels to the Bricks and Water cross-party committee at the House of Lords.

The trade body also indicated post-flood repair costs are set to spiral for insurers and property owners, while the expiration of the Flood Re initiative between government and insurers in 2039 could result in appropriate household insurance not being provided for property in flood risk areas.

Andrew Devitt, technical manager (waterproofing) at the PCA, said: “The current approach to flood mitigation is uncoordinated, resulting in low uptake of currently available flood resilience schemes, despite clear evidence that homes that are resiliently designed are effectively protected from future flood events.

“The PCA has a network of members involved in flood protection and aims to further develop specialist training so surveyors can deliver actionable solutions and enable insurers to reassess financial risks and potentially extend cover to properties that are currently deemed uninsurable.”

 

Source: Bicester Chronicle

 

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