in your hands


A SUGGESTED EMAIL TO YOUR NEW MP Dear [name of new MP]


PAYMENT ABUSE IN THE CONSTRUCTION INDUSTRY


First, I’d like to congratulate you on being elected to the House of Commons. I’m involved in an electrical business located in your constituency, where I also live [if your constituency is different to where your business is located, write to your own MP]. You may be aware that the


construction industry is notorious for payment abuse, with large companies often bullying SMEs into accepting lengthy payment terms and finding spurious excuses for not discharging due payments. Carillion was a prime example of this behaviour. In the previous Parliament, two Private


Members’ Bills on payment security were introduced. Te first sought to protect retention monies in a ring-fenced account. Retention monies are generally used to bolster the poor finances of large companies (ostensibly they are deducted from due payments in case a firm fails to return to rectify non-compliant work). It could take upwards of three years for retentions to be released; for many firms they represent their profit margins. Te project bank accounts Bill would


reflected across the UK. Dundee building services company McGill & Co collapsed this year with the loss of 425 jobs, with administrators blaming delays in payment on a number of significant jobs. In Northern Ireland, M&E contractor Blackbourne Ltd went into insolvency in September, with the Carillion collapse cited as one of the main causes. And in March, Wales suffered its own version of the Carillion collapse when main contractor Dawnus went bust with almost £40 million left owing to its subcontractors.


have protected progress payments due to firms in the supply chain, especially against insolvencies up the supply chain. Everybody receives their payments from the same ‘pot’ and everybody is paid within a maximum of 20 days. Payment abuse in the construction


industry is now taking its toll both on mental health and on quality and standards. In a recent survey, over 90% of those involved in running businesses reported mental health problems because of payment problems, ranging from stress to suicidal thoughts. Terefore I invite your support for


legislation to: ●●ring-fence progress payments in project bank accounts ●●protect retention monies ●●mandate 30-day payments, and ●●debar serial bad payers from public sector work.


Would you kindly let me know that


you would support such legislation and, additionally, whether you would be interested in seeking to lay a Private Member’s Bill?


I look forward to hearing from you, [Your name]


Getting the message to our MPs SELECT member businesses can make known these problems to all new MPs by sending an email like the one shown left. You can copy and paste the text from www.cabletalkmagazine.com too. Your letter should draw on your own experiences. How many payments are made late or for less than the amount applied for? Have you lost significant sums as a result of insolvencies? And remember; On public sector projects, unlike their subcontractors, Tier 1 contractors don’t carry any insolvency risk – public bodies do not go into insolvency. Always emphasise the broader impact


of payment abuse. As we outline elsewhere in this issue of CABLEtalk, it is a substantial cause of mental health issues amongst business owners and senior employees which, in turn, has repercussions for family relationships. Also, poor payment practices help


drive poor behaviours which, in turn, drive poor quality, according to Dame Judith Hackitt who produced a report in May 2018 on improving building safety following the Grenfell tragedy. Please amend this template to suit your circumstances. Responses should be sent to SELECT, with a copy to contact@ secroup.org.uk The responses will help us continue the campaign on your behalf to improve payment security.


CABLEtalk DECEMBER 2019/JANUARY 2020 37


MP’s email address at bit.ly/ MP_list


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