Government to make example of payment abuse in construction

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The government will ‘call out’ construction companies who indulged in poor payment practices during the Covid-19 crisis, says the minister for small business, Paul Scully

Too many large construction firms have changed their payment terms during the current Covid-19 crisis to protect themselves at the expense of smaller businesses, Scully said during a webinar hosted by the Building Engineering Services Association (BESA).

“Everyone must be responsible and play nice,” he said.

“The government should be taking the lead at both central and local level by setting a good example on payment practices – we want to keep working with our supply chains.

“However, far too many big businesses are changing their payment terms, which is creating a huge David versus Goliath impact,” Scully said.

Payment abuse vs. best practice

He asked BESA to point out examples of payment abuse to his department, but equally to highlight best practice that could encourage others to follow suit.

The minister reiterated the prime minister’s warning that, when this is all over, people would be asking: “What did you do to help other businesses and your community?”

He also said the government was looking at how some of the £4.5bn held in retention payments might be released to help cash flow in supply chains.

Scully acknowledged the vital role construction would play in the economic recovery and said the government was keen for projects to continue so long as it was safe for workers.

“We are looking at this workplace by workplace so that there are as few surprises as possible for businesses.”

Guard against legionella

The minister also warned building owners to look at how they could re-open their premises safely to ensure there was no further spread of Covid-19 when people returned and to guard against the threat of legionella bacteria having built up in under-used water systems.

Scully said “greening the economy” would be at the heart of the recovery and that the department for Business, Energy and Industrial Strategy (BEIS) was considering ways to accelerate some of its existing carbon reduction initiatives.

He also confirmed that the changes outlined in the Hackitt Review would still be going ahead, although the Covid-19 crisis might have an impact on how they were delivered.

“People are still living in fear…and we need to find ways to make sure they feel safe in their homes,” he said.

BESA chief executive David Frise said the building services sector was grateful for the range of government support schemes, but he asked for the Coronavirus Job Retention Scheme to be made more flexible.

Scully said the government was continually looking to improve the flexibility in all of its schemes to ensure financial support was reaching as many businesses as possible.

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