The latest report from the House of Commons Communities and Local Government Committee called Housing and the Credit Crunch is well worth a read for a run through of the current travails of the industry.

It seems broadly to “welcome” what the CLG and the Government more widely has been doing to pull the housing market and the industry out of a tailspin.

Its recommendations and conclusions are pretty general saying that the Government should stick to its long-term targets for house building, that pressure should be kept on Treasury to revive the mortgage market and that Local Authorities should come up with strategies to meet housing needs in their areas.

For me though, the most intriguing revelation in the report was the Government’s estimate of job losses within the house building industry.

Here is the passage from the committee report:
“CLG puts the minimum number of jobs lost in the house building industry so far at 6,000 (3.5%) of a total of 170,000. The HBF’s written memorandum suggests a problem of a much greater magnitude, estimating that, by the end of the downturn, of the 300,000 people it believes are currently employed in the sector, between 100,000 and 150,000 will have lost their jobs.”

Now my maths may be a bit rusty but even I can see there is a bit of a gap in the numbers here. Admittedly they are not quite estimates of the same thing, but I wonder: was the committee’s decision to juxtapose these two sets of figures in the report a coded message to Government to get a grip on the numbers?

Now as readers of this blog will know, I have often suggested that the Government was not fully in tune with the scale of the problem in the house building industry.

Now I begin to understand why.

Just at random I have selected a press cutting to illustrate how the broad media saw the problems in the house building industry. And as I have argued before they were underplaying the problem at the time.

It is from a Q&A article in the Telegraph written in July last year (I assume reasonably widely read among civil servants or they have access to google).

“Q. How bad are the job losses?
A. 5,000 job cuts have been announced this week. But that is only from the top five companies listed on the stock exchange, and it only includes administrative jobs, not the sub-contractors. Considering the house building sector employs 300,000, industry experts reckon up to 100,000 jobs could eventually go.”

Assuming that was the beginning of the job shedding, we can reasonably expect the Government advisors to have surmised that things had worsened by late November when they submitted their evidence.

Click here for one of the memoranda to the committee that contains the CLG thinking on the subject in November 2008. See points 6 & 25.
Admittedly there is a delay in announcing job losses and the cuts being made, but if the Government advisers do understand the industry they will know that delay is far less in house building than they may be familiar with in their employment.

We would also have hoped that they might have had sufficient knowledge of the industry to know that house builders employ but a fraction of those working in the industry, around one fifth.

Also the estimate of 170,000 employed appears to be derived from directly employed – this ignores the huge contingent of self employed who make a living out of house building.

Were the advisers really telling ministers up to November that “at least 6,000” jobs had been lost in the house building industry? It may not be wrong logically, but its implication is that the losses were of an order of magnitude less than they were.

It would seem that my many expressions of concern over the summer months last year about the Government having philosophical problems within its housing policy and not quite understanding the scale of the problem, if anything, underplayed the seriousness of the knowledge gap in the department and the wider Government.