The organisation steering construction through Covid-19 has asked the Scottish Government to put in place an action plan to get cash flowing through the industry.
The CICV Forum has written to housing and planning minister Kevin Stewart appealing to the government to implement measures it says will release cash to the industry and the supply chain. The proposals are:
• Agreement by public sector procurers on all project costs at March 31, including resolution of disputes, and payment within 14 days
• Public sector procurers to consider release of all or part of retentions
• Introduction of project bank accounts (PBAs) and a 14-day payment period when construction restarts
• Lowering PBA threshold on public sector procurement to £250,000
The forum said the urgency of its appeal was highlighted by the latest victim of the industry shutdown, Central Building Contractors (Glasgow), which went into administration last month making 148 staff redundant.
Len Bunton, head of the Forum’s clients sub-group, said: “Even before the sudden shutdown of the construction industry in Scotland, the sector was experiencing extreme difficulties in relation to cash flow and payment. Urgent attention to payment cash flow and fairness is now needed by the public and private sector in Scotland.”
Ian Honeyman, commercial director of Forum member the Scottish Building Federation, added: “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 was co-ordination 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.”
A recent survey revealed cash flow has dried up for nearly 80% of firms in Scotland’s construction industry and that close to two thirds of businesses are being hit by late payments.
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©Scottish Plant. Article posted 8/5/2020