Government policy risking future of construction

Richard Diment, Director-General of the FMB said:

‘The Government’s big idea is that jobs lost in the public sector will be replaced by new job creation in the private sector. The problem is that public sector cuts are moving at a far greater pace than private sector jobs growth, leaving a massive employment gap in the middle. These cuts are not just direct public sector jobs, but also at firms whose business is supplying the public sector with the skills expertise and services it needs to deliver government priorities.”

Diment continued:

“The public sector procures around 40% of all construction work and major cut backs will inevitably result in jobs being lost at private sector firms which work for public sector clients because as recent figures have shown that there is not enough additional private sector work to pick up the slack.”

Diment concluded:

“The result of this is that many of those laid off from construction firms will end up in the informal economy undertaking ‘cash in hand’ work for rogue builders that defraud clients and put lives at risk by ignoring essential safety precautions. What is even more worrying is that the Government is set to make the informal economy problem even worse in January when VAT will rise to 20 percent. This will cost 7,500 jobs in the domestic repair and maintenance sector within a year, and the total cost to the economy of this policy could be as high as 34,000 jobs.”

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