News
Late payment ‘endemic’ n
A study by the ECA has confirmed that late payment for subcontractors is endemic across the sector, as
main contractors fail to pass on prompt payment terms from clients. In a survey of ECA members, nearly a third (30 per
cent) of respondents report they have had to wait 60 days or more to be paid by main contractors when working on private sector projects. Meanwhile, those working on central government projects are finding attempts to improve payment times aren’t working. Only eight per cent of those surveyed say the main contractor regularly passes on the government’s best practice payment terms of 30 days. Steve Bratt, ECA group CEO said: ‘At worst, late payment kills; at best, it severely hampers growth.’ The ECA believes urgent action is needed, as late
payment is directly preventing business growth in firms of all sizes. Its research also shows that 33 per cent of its members have lost money due to upstream insolvency over the past two years. Bratt continued: ‘Tackling late payment is
not just a question of survival today – it’s about the future of our industry and economic growth. I am hearing from members who have hit a glass ceiling; they could grow and invest in new technologies and staff, but as a result of the risk of late or non-payment have made a strategic decision not to. If businesses can’t grow, it’s not only bad for our industry but bad for Britain’s economy.’ The ECA welcomes government’s recent commitment
to the creation of a special payment charter solely for the construction industry and hopes that this will be tough, meaningful and fit for purpose. It also believes that late payment could be tackled by the wider adoption of project bank accounts, which are already used in Wales and Northern Ireland. A strengthening of the Prompt Payment Code is also recommended, to remove and, ultimately, name and shame firms who don’t adhere to 30 days payment in public sector contracts and – as of October 2013 –, 60 days in private contracts. Bratt concluded: ‘Late payment is like any other form of discrimination or abuse, and we should stop tolerating it.’
Safety concerns over domestic electrical installations
Research conducted by BEAMA has revealed the serious concerns among electrical contractors over the safety of domestic electrical installations. Feedback from hundreds of contractors has added to calls from the Communities and Local Government (CLG) Select Committee for regular electrical safety inspections in rented properties. The survey findings
CONSTRUCTION SECTOR BUILDING MOMENTUM n
Construction sector output rose by 2.5 per cent between
July and September, as the overall UK economy grew by 0.8 per cent – the fastest rate for three years. The figures released by the Office
for National Statistics reflected a ‘fairly strong’ performance across all sectors. Commenting on the figures, Noble Francis, economics director at the Construction Products Association, (CPA) said: ‘The GDP figures… show that construction was a key contributor to UK economic growth in Q3 for a second consecutive quarter. This adds to increasing optimism that the industry is recovering from its worst recession in 35 years. ‘The construction sector rose 2.5
per cent in Q3 primarily due to private housebuilding, boosted by Help to Buy, and infrastructure, driven by work on Crossrail, which is Europe’s largest construction project.’ Francis pointed out that the
growth was from a low base, but that 6 ECA Today December 2013
it was a positive sign for the industry: ‘Although output in the sector still remains 12.5 per cent lower than it was five years ago, today’s GDP figures point towards recovery for the construction sector and the wider economy.’ The latest Construction Trade
Survey, published by the CPA in November, indicated that the growth in the third quarter was across all areas of the industry, including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers. Commenting on the survey,
Francis said: ‘A balance of 43 per cent of contractors reported rises in activity, the second highest level since pre-recession 2007. Although private housing is clearly driving industry growth, all construction sectors enjoyed increases in output. With rises in new orders and enquiries, the industry clearly expects that the recovery in output will continue over the next 12 months.’
highlighted a need for action: n About 30 per cent of electrical installation condition reports identify ‘danger present’ in rented properties n 25 per cent to 75 per cent of homes have wiring installations more than 20 years out of date (pre-16th edition BS 7671) n Landlords are less likely to instigate a rewire as compared to homeowners, despite a growing private rented sector and with rented homes making up 50 per cent of the total stock in some regions of the UK. BEAMA revealed that typical
quotes from more than 200 written comments included: n ‘It’s startling how many people think that because their electrics are working, they believe them to be working safely’ n ‘With the properties we inspect, it is rare to find no problems’ n ‘I see many cases of people purchasing properties who are unaware that the wiring is in a poor state.’ BEAMA has called on
government, landlords and consumers to listen to the concerns raised. Contractors overwhelmingly told BEAMA they encounter unsafe installations on a regular basis and support action to resolve this. BEAMA said it hopes that, in time, the safety of domestic electrical installations will be tested as a matter of course, as is the case with gas.
SHUTTERSTOCK /CHUKOV
CPL
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