Business groups have warned that Chancellor George Osborne’s £5bn investment in the construction industry “won’t deliver growth” unless main contractors are forced to clean up their act.
Organisations representing more than 24,000 small construction and engineering companies have called on the government to force contractors to address a culture of treating small businesses “like banks”.
In an open letter to Whitehall, the groups state: “The widespread, long-standing, culture to pay small suppliers late – or even not at all – results in hundreds of firms going under every month.
“This is now compounded by the collapse of some major firms, leaving vast amounts of monies owing to their supply chains. Every day, at least ten construction firms are going insolvent.”
The groups, including the Federation of Master Builders and the Specialist Engineering Contractors’ Group, said any “attempt to promote growth by investing in construction activity will not succeed unless the money flows quickly through to the people on the ground”.
“The industry is bottom-up funded but suppliers cannot continue to do this since bank lending has run dry. The largest firms are poorly capitalised, so they cannot pay their supply chains without being paid themselves [so they] impose even longer payment periods on small firms.”
A recent survey of 250 small construction companies found that 97% feel unfairly treated by main contractors – and just 5% of all work is paid within 30 days.
So come on big boys (and girls) play fairly. Imagine standing at the till at Sainsbury’s and informing the checkout teller that you will be settling your bill when you get paid at the end of the month… wouldn’t be long before security frogmarches you out the door…
In this edition of Construction Magazine we spotlight the need for a joined-up approach to tackling flood defence schemes. In England alone there are 5.2 million properties currently at risk of flooding, so clearly there’s a lot to be done.
At the other end of the scale, Building a Green Future looks at some of the methods available to aid water conservation and sustainable drainage. Every day a person uses on average 150 litres of water, of this 50 litres is for WC flushing, representing 35% of all household consumption. We take a look at measures that can drastically reduce the amount of water we consume.
Meet some of the newest industry appointments in Head Hunters and get your diary and your passport ready for our digest of construction events happening around the world this month.
Check out our round-up of some of the most exciting European construction equipment launches such as the new M 36-4 truck-mounted concrete pump from German firm Putzmeister, which is already setting standards.
All this, along with profiles on some of the industry’s best performing firms and the usual round-up of UK & Ireland and World news.
Heather Campbell
Editor
