A blueprint to improve construction’s cash flow crisis and give companies a better chance of remaining in business during Covid-19 has been presented to the Scottish Government.
Proposals by The Construction Industry Coronavirus (CICV) Forum include a number of “urgently-needed” actions to improve liquidity and will be distributed to both public and private sector clients.
The move follows this month’s survey, which revealed cash flow has completely dried up for nearly 80% of construction firms and that nearly two thirds of businesses have been hit by late payments.
Grahame Barn (right), chief executive of the Civil Engineering Contractors Association (Scotland), said: “Just as the Government has rightly stepped in to inject cash into the economy, contractors and clients must play their part by keeping cash circulating through the sector. The construction industry needs to emerge from this crisis in the best shape it can and the best way of achieving this is for everyone to pay our suppliers in full and on time.”
The forum’s recommendations include:
• An agreement of an effective Final Account between contractors and employers, as well as between public bodies and design teams, on the value of work completed by March 30 this year and compromise to resolve disputed issues
• Reduction in the payment cycle time frame for public bodies and agreed cash flow forecasts on recommencement
• Involvement of the entire supply chain
• Release of 50% of retentions held by the public sector, and of sector-wide historic retentions. Also, a retentions embargo for six months
The CICV Forum is made up of 17 industry associations and has been playing a central role in clarifying conflicting information for Scottish construction. It has set up a series of sub-groups for health and safety, skills, communication and future planning.
See also: Plant sales devastated, key workers abused by public, only 10% of hirers working as normal. Click for more
Want the latest updates from Scottish Plant? Email here with ‘subscribe’ in the subject box.
©Scottish Plant. Article posted 30/4/2020