The Chancellor’s announcement of a new consultation on late payment should be the beginning of the end for unfair payment practices which hit small businesses across the UK, the Federation of Master Builders (FMB) has said in response to the Chancellor’s Spring Statement.
Commenting on the Spring Statement 2018, Brian Berry Chief Executive of the FMB said: “The Chancellor’s announcement of a consultation to tackle the scourge of late payment today should mark a turning point on this issue. We should use this opportunity to bring about a spring clean of payment practices which negatively impact on small business. Construction giant Carillion’s collapse at the start of the year brought to light once again the need to eliminate poor payment practises that plague the construction sector particularly.
“Indeed, one London based small building firm was once paid more than 270 days late by a construction giant. Now is the time to move away from these unsustainable business models which threaten the existence of many firms and their supply chains. This announcement today should be followed by a fundamental rethink ending in the permanent abolition of late payment terms and the exploitative use of retention payments.”
Berry concluded: “At first glance the Spring Statement has brought some other positive announcements for the UK’s small construction firms. The announcement of a doubling of funding to the Lloyd’s Housing Growth Partnership and an additional £80 million funding to support SME firms looking to engage an apprentice is welcome news.
“With Brexit looming large on the horizon and the construction industry facing a chronic skills crisis, it’s of the utmost importance that more skilled workers begin to join the sector. An additional £50 million to support T level training will further aid this aim.”
Commenting on the Spring Statement, John Newcomb, Chief Executive of the Builders Merchants Federation said:
“The BMF is pleased to see the government focus attention on tackling the issue of late payments which is a big issue for our members, particularly for smaller builders merchants. The collapse of Carillion gave a clear indication of how vulnerable suppliers can be to their customers and we support measures that minimise these risks to our members in the future. In order to keep Britain building and delivering the building blocks for growth, it is vital that merchants are paid quickly.
“The Spring Statement has also re-iterated other positive changes for the building materials supply industry including funding to stimulate housing growth, £80 million funding to support apprenticeships in SME firms and an additional £50 million to support T level training. Encouraging new apprentices into the sector is a key aim of the BMF and we hope that this funding will help to drive this forward.”