In s I


ss


tiio


th th


NEWS


SPECIAL FOCUS T


he Building Engineering Services Association (BESA) has supported a plea to the


Contractors’ Corner


government to instruct construction c lients to release £4.5bn currently being withheld from contractors in the form or retention payments. The Association backed the request, which was included in a letter from the Construction Leadership Council (CLC) to the P rime Minister, in a bid to inject much needed cash into struggling construction supply chains. As well as the call to release


retentions, the CLC also asked the government to consider suspending PAYE and CIS tax due to HMRC in April and May for construction and consultancy firms and workers, with no financial penalty. This would also help to relieve some of the


immediate cash flow challenges being experienced across the sector, it said. It has also called for all


Apprenticeship Levy payments to be cancelled for the duration of the Covid-19 crisis.


BESA, which has been campaigning for reform of the retentions system for more than two decades, added


that speed was now of the essence a s many specialist contractors were facing a rapid fall in turnover this month.


ow of the essence t contractors were


essence re An online poll held during the


Association’s daily Covid-19 update webinar revealed that 58% of firms w ho responded expect to invoice for just 25% or less of their usual monthly amounts at the end of April. “The current crisis has provided a sharp reminder that cash is king in this industry,” said BESA chief executive David Frise. “Any measures t hat can get cash flowing more


rapidly through supply chains will be crucial to ensure our sector can keep delivering on its promise to support essential services with vital building services.”


Since the CLC letter arrived at 10 Downing Street, the Crown Commercial Service has updated its Procurement Policy Note 2/20 Supplier relief due to COVID-19 to suggest ways that public sector clients could improve cash flow through their supply chains. It says the release of retention money could be considered, but warned that it might expose clients to


“inappropriate risks”. It does,


however, encourage clients to set up Project Bank Accounts and says they should pay C


hou


to 5% of each regular payment. It against contractors can represent up the cash retentions routinely held The CLC


hould pay suppliers promptly. LC


C letter pointed out that etentions routinely held ntractors can


tions routinely held


acknowledged there would be some “strong opinions over this”, but were t he government to direct all public sector bodies to release all retention monies held “this would inject cash at all levels of the construction supply chain”.


ach regular payment. It ged there would be some


me


“The construction industry also needs clear support and recognition from the government for the


essential work that it is doing, and the role it is playing in supporting public services and keeping the economy functioning,” the letter added.


greater sympathy to SME firms cross constructi


ms oan


BESA also urged banks to show mpathy to SME firms


working across construction as they were finding it hard to access business loans despite striving to keep sites operating.


oans despite striving to g it hard to access


finding it hard to access ction as


p sites


Another BESA poll revealed that 97% of firms who had applied for


an represent up ment. It


st


recovery in the second half of the year. It does not envisage a long haul that followed


overy in the second half of the teep decline followed by a rapid


te


recovery like the one that followed the financial crash of 2008/9.


financial crash of 2008/9.


overy like the one that followed ot envisage a long haul


r. It does not envisage a long haul in the second half of the


of long-term benefits on the horizon uding rapid growth in digital


It also believes there are a number on


t also believes there are a number 8/9.


including rapid growth in digital working as a result of more people being forced to work this way during the Covid-19 outbreak and a boost to plans to decarbonise the economy th


rking as a result of more people gital


k hi d i


ng forced to work this way during 19 outbreak and a boost


Covid-19 outbreak and a boost work this way during


forced to work this way during more people


plans to decarbonise the economy thanks to many lessons learned during the crisis.


The reputation of the business sector will also benefit thanks to the ability and willingness already demonstrated by many companies and individuals to step up and


provide support to the NHS and other essential services, the CBI said.


ong-term benefits on the horizon mber


C oronavirus Business Interruption Loans (CBILs) were still waiting for a response. “This goes to show that the process has yet to catch up with the demand,” said Mr Frise.


T he Association’s daily webinar a lso heard that the CBI had issued an upbeat assessment of the UK’s medium term economic prospects. It is predicting a V-shaped recession i.e. a st


Thermofrost 12


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