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Government warned of Brexit no-deal impact on project costs

Scaffolding pipes stock

Construction Leadership Council (CLC) chair Andy Mitchell has warned the government that a no-deal Brexit could send project costs soaring.

In a letter from Mitchell to business and industry minister Richard Harrington, Mitchell outlines four main concerns about a no-deal Brexit. He said these have the potential to delay project completions and increase costs.

Mitchell, who is also Tideway chief executive, expresses concerned about the sector’s ability to retain and support the 160,000 European Union (EU) nationals currently working in the UK who form around 13% of the construction workforce.

In London 30% to 40% of the workforce is made up of EU nationals. In the housebuilding sector where the percentage is even higher.

Mitchell also warns of disruption to construction product imports and exports if the UK leaves the EU without a deal.

He says that construction is likley to be the hardest hit sector because so much work is delivered by smaller companies which lack the resources to plan ahead and stockpile products and which do not ncessarily have the information to understand the effect on their operations.

Mitchell’s letter also raises concern about the regulatory regime for construction products post-Brexit.

The letter says the concerns were raised at a recent Brexit transition planning conference at the ICE, organised by the CLC. It says the CLC is convening a group to address immigration issues, work with trade associations to understand the impact of changes to rules on imports and exports and to produce guidance on compliance with product regulations.

But he stressed that these actions would have to be matched with commitment and support from goverment.

“As you will appreciate, it will not be possible to mitigate all of the potential impacts of ‘no deal’, and that close collaboration and a spirit of cooperation will be needed to solve further issues as and when they arise,” said Mitchell.

“I would therefore urge you to continue to advocate for the industry within government and encourage your ministerial colleagues to adopt this approach in their dealings with the sector.”

Civil Engineering Contractors Association chief executive Alasdair Reisner said its members shared the concerns raised in the letter, adding that many still are still unclear about how a no-deal Brexit wil affect the sector.

“Our members share the concerns raised,” said Reisner. “They still don’t have clarity over what the future state of import and exports, particularly imports, in the sector will look like and the impact that this will have on delivery on site.”

The UK is due to leave the EU on 29 March. As yet no deal between the UK government and EU officials about trading arrangements has been agreed.

Readers' comments (2)

  • Philip Alexander

    Another element of "Project Fear" and an example of using Brexit as the prefect opportunity for contractors to try to rort clients even more. Take no notice, it's pure speculation and has no basis in facts.

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  • ... Or for clients to 'stiff' contractors into absorbing extra costs, no matter where they come from. Time, after all these years, to stop portraying contractors as rapacious. Just trying to build your underdone designs to the best of our ability!

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