Industry Leaders Call For Cashflow Not Disputes To Help Sector Survive

The Construction Leadership Council has called for the whole industry to help each other by boosting the flow of cash through the sector.

The CLC is working with industry federations to provide immediate support to the sector, guiding on health and safety issues and pressing the Government to provide additional support to keep construction companies afloat during the current crisis.

But it has asked the sector itself to step up by keeping money flowing to all parts of the industry.

In an open letter to construction businesses, the CLC has said that the sector faces extraordinary difficulties as a result of the Covid-19 crisis. These difficulties will only be worsened if disputes and penalties are invoked throughout the sector, and if firms sit on cash meant for their suppliers.

The letter states: “There are number of businesses that have chosen to unilaterally delay payment or extend credit terms. We do not believe this is acceptable or appropriate – particularly at this time of great stress”.

The letter also notes that where the industry is asking for substantial support from the Government, it is less likely that this support will be forthcoming if the sector has not demonstrated that any benefit will be fairly distributed to all parts of the industry. It also warns on the reputational damage to individual businesses that seek to withhold cash or punish contractual partners.

Andy Mitchell, co-chair of the CLC states “we are increasingly concerned about the management of payment in the supply chain.  All construction businesses should continue to pay in accordance with agreed contractual terms and firms should not be threatening to invoke penalty or other contractual clauses.  Our joint priority must be to sustain the industry.  All firms should think hard about how their reputation could be damaged by not doing the right thing during these difficult times.”

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