THE Construction Industry Coronavirus (CICV) Forum is urging the implementation of a number of measures to improve cash flow and save construction businesses in Scotland.
The group has presented Holyrood with a paper of recommendations, outlining a series of ‘urgently-needed actions’, which will go to both public and private sector clients, while the Scottish Government will be kept informed and its support sought.
The CICV is comprised of 17 trade and professional bodies as well as companies and government agencies. The paper, agreed by all members of the forum, is aimed at assisting the supply chain through the months ahead. It proposes:
- 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 whole supply chain.
- Alternative methods of dispute resolution.
- Dealing with liquidated and ascertained damages at Final Account stage.
- The release of 50% of retentions held by the public sector, and of sector-wide historic retentions. Also, a retentions embargo for six months.
- The reduction of PBA thresholds and the use of existing low-cost adjudication schemes.
Fiona Hodgson, chief executive of forum member SNIPEF, the plumbing and heating employers association, said, “The construction sector as a whole is currently facing extraordinary difficulties, which will only be exacerbated if companies and public bodies take unnecessary time to pay their suppliers. This paper outlines a multi-pronged strategy to improve cashflow and introduce some creative thinking on addressing what lies ahead.”
Ms Hodgson pointed out the importance of the construction industry to Scotland was illustrated by the fact it employs more than 175,000 people and contributes some £21.5 billion to the country’s GDP.
Grahame Barn, chief executive of forum member CECA Scotland added, “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.”
