Forum Outlines Key Points to Minister

The Construction Industry Coronavirus (CICV) Forum have written to the Scottish Parliament urging the Government to adopt a five-point plan in order to help contracts through the worst of the COVID-19 pandemic.

The CICV is made up from 23 trade and professional bodies, as well as scores of companies and individuals, and they have addressed their appeal to Kevin Stewart MSP, Minister for Local Government, Housing and Planning.

The letter asks the Scottish Government to implement the following five key point, along with the desired aims:

1. Agreement by public sector procurers on all project costs at March 31, including resolution of disputes, and payment within 14 days. Aim: Release cash to the industry and supply chain
2. Public sector procurers to consider release of all or part of retention. Aim: As above
3. Introduction of 14-day payment period when construction recommences. Aim: Improvement of cashflow
4. Introduction of Project Bank Accounts (PBAs) when construction recommences. Aim: Ensuring rapid cashflow
5. Lowering PBA threshold on public sector procurement to £250,000 Aim: As above

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 in relation to cashflow and payment. Urgent attention to payment cash flow and fairness is now needed by the pubic and private sector in Scotland.”

The Forum’s plea to Kevin Stewart MSP follows on from a major survey which showed cash flow has completely dried up for nearly 80% of firms in the construction industry in Scotland and that close to two thirds of businesses are being hit by late payments.

Chief Executive of the Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF), Fiona Hodgson said: “Retentions are something we have to look closely at in the future, but even a temporary release of public sector contract retentions would generate significant cash flow throughout the industry.”

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 operation sites.

“The Forum has produced realistic recommendations on improving cashflow and if there was co-ordination on these matters between local authorities, Scottish Government procurement departments and the Scottish Futures Trust, this would give specific lead to the Industry on to how sensibly manage a way through this crisis.”

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