20/01/2019 - 08:56
By Kyran Fitzgerald
If this country does not get a grip on runaway capital costs, we can wave goodbye to any notion of a truly sustained economic recovery, writes Kyran Fitzgerald.
The childrens’ hospital fiasco has exposed the naivety of people who would be considered as experts in their field.
Real questions must be posed about the tender process in such projects and about the competence of contractors.
The counter argument is that there has been a failure to put in place proper guidelines aimed at ensuring that considerations of cost are prioritised.
Who drafted the legal documentation? Are provisions not supposed to be in place to tackle the matter of unexplained overruns?
The Government has unveiled an ambitious series of investment programmes aimed at eliminating some of the deficits in our infrastructure, but all of this will amount to the construction of fancy castles in the air if the basics of detailed planning are not grasped.
The country has sleepwalked into a situation where we now have a 'manpower' crisis in an industry which, ironically, was on its knees a short few years ago.
In 2015, less than one half of builders identified staff shortages as a problem. The equivalent figure today is 86%, according to a recent survey carried out by two Dublin Institute of Technology academics for the Construction Industry Federation.
The authors, Eoghan Ó Murchadha and Dr Roisin Murphy, highlighted in particular a dramatic downturn in applications for apprenticeships in so-called 'wet trades' such as bricklaying, plastering, tiling and decorating. The decline has continued even as the industry has embarked on a sustained recovery of more than five years’ duration.
The DIT survey figures are stark. In 2006, 300 people registered for apprenticeships as plasterers, 161 as painter and decorators, 679 as bricklayers and 43 as floor and wall tilers.
The equivalent figures for 2017 were 30 as plasterers, 45 as painters/decorators, 65 as bricklayers, with zero –yes, no one- registering as apprentice tilers.
The DIT/CIF report recommends that the Government introduces a grant system aimed at firms which engage apprentices in trades identified as suffering from dire shortages along with zero rating for employer PRSI for the firms taking on such apprentices.
A 'collaborative forum', aimed at marketing the industry as a viable career choice, is also called for.
The industry must, itself, put its own house in order. Many have earned a poor reputation as employers. The structure of the industry and the chain of responsibility needs to be looked at. There needs to be more collaboration between firms along with rationalisation.
In a departing interview, the outgoing CIF President, Dominic Doherty, himself a housebuilder of long standing, outlined some of the challenges faced by his industry. Profit margins in the sector, at 1%-1.5%, are too low to support the levels of innovation now required.
While the major cities are performing well, it is a different story as far as building in the regions is concerned.
"The replacement cost of buildings in the regions is way above their market value," he said.
Mr Doherty correctly argues that the capital programme should be implemented in a phased structured way so that people with construction skills based overseas can be satisfied that they will have sustainable careers of at least 5-10 years’ duration should they decide to return.
"These individuals need to have confidence that the National Development Plan will be delivered," he said.
With justification, he argues for a concerted State response.
"We don’t have a single line Minister for the construction sector so we often have to visit up to six different ministers to discuss construction topics. We need a plan around training. In the schools, the sole focus seems to be on students going to third level. That needs to change."
He insists that the career path offered by apprenticeships is "very good," with many of the top engineering executives having started out as apprentices.
Schools and college careers officers need to be won around, however.
The problem is not confined to Ireland. Shortages of construction skills have reached acute proportions in London where the city’s mayor, Sadiq Khan,has launched a plan aimed at tackling the problem.
In the past five years, take up of apprenticeships have halved. Many cite low pay and poor career development prospects.
Across Europe, demographics - in the form of an ageing population - are increasingly dictating matters.
Almost one third of London’s construction workforce is from the rest of the EU and many are returning home to increasingly prosperous economies.
The truth is that construction is facing a new crisis. Gone is the inactivity prevalent during the downturn.
We are, however, living with the longer term effects of the crash. Many young people – faced with other lucrative alternative job offers – simply do not have confidence in the sector.
The truth is that the construction skills crisis will be with us for a long time to come whatever the response of those in the industry and in Government.