Asked by: Lord Moylan (Conservative - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what assessment they have made of the UK construction sector's financial structure, including capital structure; and what assessment they have made of the impact of this on their infrastructure plans.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
There are weaknesses in the current business model of the construction sector, with low margins and a high level of reliance on subcontracting, which have contributed to poor productivity compared to other sectors. The Government is working with the construction industry to address these issues, including by investing £420m through the Transforming Construction Challenge in the development and commercialisation of innovations that will improve the productivity, profitability, and sustainability of the industry. The Government has also published the Construction Playbook, which sets the objective of ensuring that the industry can make a fair profit on work undertaken, through a more strategic and collaborative approach to contracting and working with the industry. This will strengthen the financial position of firms in the industry, and incentivise investment by firms to improve their performance.