Money

Construction firms will go bust without clarity, says boss



Lack of detail on the Coronavirus Job Retention Scheme has left construction companies in limbo, according to a company boss.

Advance Construction Scotland founder Seamus Shields says many firms fear for their existence because they don’t know when they will receve the furlough money for keeping staff on.

The Bellshill firm has more than 1,600 employees who have been left largely unable to work by government guidance on non-critical projects.

Shields, who established the family owned company 25 years ago, said: “Our company is working across more than 200 live construction sites and has a payroll stretching to seven figures per week. We also have 500 sub-contractors and over 2000 companies on our supply chain who all depend on us. Nearly all work has ceased instantly.

“The job retention scheme was welcome news at first but the lack of detail is staggering. The claims system will apparently be open by the end of April but no one can tell us when payments will be made after a claim is entered.

“In the meantime, banks are providing little clarity to the sector on how we can maintain cash flow to ensure staff wages and contracts can be paid. People’s rents, mortgages, food and utility bills – all of these payments rely on the sector urgently being given the certainty it needs. We need that clarity now.

“Extreme pressure is being placed on the industry and my fear is that if some companies collapse then others in the chain will soon follow. Any decision we take to furlough staff has to be made with the knowledge of how claims will be handled by government and precisely when the payments will arrive.”

The Scottish Government asked construction firms to stop work apart from on vital infrastructure such as hospitals and the newly formed Construction Industry Coronavirus Forum recommended members comply.

But UK Government guidance has been contradictory and some companies have carried on with housebuilding projects. Shields says that has cast doubt over whether construction firms can apply for financial support.

Meanwhile, the pub, restaurant and hotel sector was covered by a UK-wide shutdown ruling.

He added: “The Scottish Government has told the sector to cease activity in line with social distancing guidance. We are supportive of their direction as stopping the spread of Covid-19 and helping our brilliant NHS is the fundamental priority.

“South of the border, however, many construction sites are still operating. That is creating issues in the industry and raises questions about why some companies will need financial support and others will not.

“An emergency funding package should be made available to bridge the gap and keep companies paying wages before any furlough payments are eventually released. This would encourage the sector to cease all activity and also ensure the industry was ready to quickly get going again once Scotland and the UK is back on its feet.”



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.