Manufacturers need simple, stable policy for innovation

Government can help the construction products industry invest, innovate and grow by producing simple regulation, a long term roadmap and seeking cross-party consensus on policies for key markets like housing and infrastructure.

These are among the findings from a study by the Construction Products Association (CPA) on the economic, political and regulatory landscape facing the industry. The study is the second in a series of projects that the CPA is contributing to support Construction 2025: Industrial strategy for construction. The results in this report suggest how industry and government can work better together to develop policies that give greater certainty and confidence to industry to encourage investment, innovation and growth.

Key findings include:

  • Effective regulations are clearly defined, target-driven and not prescriptive
  • Industry needs policy and regulation that is simple with minimal administrative burden
  • Policy works best when government consults industry early and regularly to identify problems, review measures, provide solutions and evaluate results
  • Government can create greater certainty for industry by providing a roadmap with a long term plan – not just over five-year parliamentary cycles – and clear goals which allow time for industry to prepare
  • Once the roadmap is implemented, unplanned changes should be avoided. Delivery according to the original plan is key. Consistency of policy helps industry to invest
  • Cross-party consensus should be sought in advance for policies which are key drivers in major markets like infrastructure and housing, to prevent changes occurring due to party politics.

At the same time industry needs to play its part with actions including:

  • Speaking as a supply chain with a consistent voice to government.
  • Providing government with high-level, outcome-focused, strategic input which avoids commercial differences.
  • Supporting well-considered, effective regulations with credible, practical solutions that are fact and evidence-based.

The report, A study of the factors underpinning investment in the construction products industry, also features a survey of members’ and wider industry perceptions of policy and regulatory risk. Key findings from the survey were:

  • 61% of respondents said their business had been affected by Part L of the Building Regulations for new homes
  • 63% said the policy has had a positive impact on their business, with more than half of companies reporting investment as a result of its introduction
  • Around a third of firms said their experience with Help to Buy had improved their business view in terms of preparing for future policies and regulation
  • Change to the Energy Companies Obligation policy had a negative effect, according to 55% of firms on balance
  • 38% of respondents said their business had been affected by the green deal, but on balance 23% said that the policy has had a negative impact on business.

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