News article 3/05/2013

Issued 3 May 2013) 
 

The major trade bodies representing the home building, commercial property and construction sectors have joined forces to voice their collective concern over Scottish Government proposals to impose additional regulatory burdens which threaten to place Scotland at significant economic disadvantage in comparison to England and thus intensify the country’s housing and construction crisis.

With Westminster seeking to cut the costs of business in England through its ‘one in, two out’ rule (which specifies that every new regulation imposing a new financial burden on firms must be offset by reductions in red tape that will save double the amount), Homes for Scotland, the Scottish Property Federation, Scottish Building Federation and Federation of Master Builders are greatly concerned that the imposition of more red tape and increased costs will position Scotland as being comparatively more expensive and difficult to invest in.

In a letter to key Scottish Government Ministers highlighting the potential impact of further red tape and its associated cost, the organisations point to the recent consultation on energy standards, with the Scottish Government’s own figures showing that these proposals could add up to £10,000 on to the cost of building what are already highly energy efficient new homes.

This additional cost burden is not reflected in house price valuations and could therefore further depress housing production as well as risk the very existence of some companies at a time when Scotland is already confronted by 160,000 people on waiting lists, output at its lowest level since 1947 and record insolvencies in the construction sector.

Similar concerns apply to commercial property development where further demands in terms of energy efficiency also threaten increased construction costs when new offices have already reduced their carbon emissions by 70% compared to 1990 and the sector faces continuing difficulty in accessing finance.

The organisations consider that any moves to further increase regulation will have significant impact, not only in terms of the delivery of much needed new homes and jobs but also the wider range of policy areas which home building and the construction industry more generally supports.

Homes for Scotland Chief Executive Philip Hogg said:

“Whilst we fully support the Scottish Government’s ambitions to address the challenges of the green agenda, we believe that imposing even more stringent requirements on the new build sector ignores the more pressing need to improve the energy performance of the existing built environment, where the overwhelming bulk of the problem lies.”

Scottish Building Federation’s Executive Director Michael Levack said:

“A policy focused on imposing further regulation on those sections of the built environment that already attain the highest energy efficiency standards simply does not justify the cost or wider economic and social risk. A comprehensive retrofit programme to improve the energy efficiency of existing buildings would have a far greater impact on cutting carbon emissions.”

Scottish Property Federation Director David Melhuish said:

“Anything which increases construction costs is a key concern for the commercial property sector, affecting our competitiveness and ability to contribute to economic recovery.”

Federation of Master Builders’ Director Grahame Barn said:

“If businesses (whether Scottish, UK-wide or international) are to invest north of the border, Scotland needs a level playing field offering comparable (indeed preferably greater) support to that being made available in England.”

The organisations are calling on the Scottish Government to pause any proposed increases in regulation and ensure that any recommendations on energy standards made by the reconvened Sullivan Panel, which meets next week, are taken in the context of prevailing economic and industry conditions which are fundamentally different to 2007 when the Panel’s original report was published.

Ends

Notes to Editors:

Click here to access a copy of the joint letter sent by the organisations to the Deputy First Minister; Cabinet Secretary for Finance, Employment and Sustainable Growth; Minister for Local Government and Planning; and Minister for Housing and Welfare.