Scottish construction industry calls on government

A group of at least 23 professional and commercial agencies comes together to present the government with a 5-step plan to help contractors overcome the crisis caused by the Coronavirus.

This group has been called the Construction Industry Coronavirus (CICV) Forum, and they have requested upon Kevin Stewart MSP, Minister for Local Government, Housing and Planning.

Great benefits for contractors

Some of the changes proposed by the forum are a payment period of 14 days when construction restarts. This would help increase cash flow solving one of the biggest problems that contractors suffer due to the COVID-19 pandemic.

Besides, more Project Bank Accounts (PBA), closed bank accounts for the payment of construction projects, should be introduced, while the PBA threshold for public sector acquisitions should be lowered to £ 250,000.

Meanwhile, public sector procurers should make agreements within 14 days, including the resolution of disputes.

And public sector procurers should consider the release of all or part of retentions (money released when construction projects meet milestones).

“Cash flow represents a big problem today.”

Len Bunton, head of the CICV Forum Clients sub-group, said: “Even before the sudden shutdown of the construction industry in Scotland, the sector was experiencing extreme difficulties about cash flow and payment.

“Urgent attention to payment cashflow and fairness is now needed by the public and private sector in Scotland.”

The Forum said the appeal is urgent, highlighted by Central Building Contractors (Glasgow) going into administration at the end of April, making 148 members of staff redundant in the process.

Cashflow has completely dried up for nearly 80% of firms in the construction industry in Scotland and two-thirds of businesses are being hit by late payments.

Ian Honeyman, commercial director of Forum member the Scottish Building Federation, said: “From the end of March, most contractors and the supply chain in Scotland have been unable to generate work in progress on sites. This situation will continue for a significant period beyond the date of a return to operational sites.”

“The Forum has produced realistic recommendations on improving cash flow and if there is coordination on these matters between local authorities, Scottish government procurement departments and the Scottish Futures Trust, this would give a significant lead to the Industry on to how to sensibly manage a way through this crisis.”

HICH LTD is proud to continue to provide the best property survey service across the UK; even during the crisis, we continue to work to provide you with superior quality service.