Construction Leadership Council Writes To The Prime Minister With Recovery Proposals

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April 1 saw the Construction Leadership Council's Andy Mitchell send a letter to the PM Co-signed by all members of a special Taskforce putting forward a plan to sustain the industry and accelerate recovery of the economy.

In the letter, Mitchell asks the Prime Minister to give very clear and visible encouragement that the production of building materials continues, if at all possible.

He also asked that general builders’ merchants, and electrical and plumbing merchant be allowed to remain open so that essential construction and maintenance works can continue – and that the workers doing this are recognised, supported and appreciated.

 

 “The measures that your Government has put in place to keep money flowing to the workforce have been bold and necessary, and we are working at all levels to help employers, employees and the selfemployed benefit from these measures as soon as possible, noting that it will take some weeks and even months for some forms of support to reach those who need it.”

– Andy Mitchell 

Co-Chair, Construction Leadership Council

 

 

Make a huge difference

Mitchel continues: 'As you will be aware, most construction businesses, from the largest public company to the smallest SME, are highly dependent on free cashflow and I present below a range of further measures that I ask you to consider which would make a huge difference to many companies within the industry."

 

 

Measures

1. In addition to the Job Retention Scheme, suspending PAYE and CIS tax due to HMRC in April and May for construction and consultancy firms and workers, with no financial penalty. This will relieve some immediate cashflow challenges and give companies time to secure the support of measures that the Government has established.

2. Deferring/cancelling Apprenticeship Levy payments due for the duration of the crisis. Whilst firms in the sector are committed to retaining apprentices, and in the longer term increasing the number of these, whilst the current restrictions are in place it is not possible for firms to train apprentices. This would further reduce cash flow pressure, without affecting the longer-term provision of funding for apprenticeships.

3. We welcome the guidance on flexibilities in public procurement rules provided by Policy Procurement Notice 02/20: Supplier relief due to COVID-19 and urge Ministers to continue to encourage all public sector clients, regulated utilities and firms in the private sector working on public infrastructure to expedite cashflow through the supply chain, by making use of these.

4. Support for the Directors of micro-businesses. There are many directors of small building firms and consultancies who pay themselves a small salary and top this up through dividend payments. These currently fall between the support provided by the Job Retention Scheme and through the assistance for the self-employed announced last week. This is a problem for other sectors too. It would be welcome if the Government could ensure these Directors would be able to access support from one of these schemes.

5. Retention release - it is estimated that throughout the industry there is £4.5 billion held by clients and firms in the supply chain in the form of cash retentions, which is a routine withholding of between 1% to 5% of each regular payment to be released upon successful completion of the works without defects. If all Government bodies were directed to release all retention monies held, this would inject cash at all levels of the construction supply chain.

6. Extend the £25,000 SME business continuity grants scheme to the construction sector.

 

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The Rt Hon Rishi Sunak MP, Chancellor of the Exchequer CC: The Rt Hon Alok Sharma MP, Secretary of State for Business CC: Nadhim Zahawi MP, Construction Minister

Picture: The Construction Leadership Council has written to the Prime Minister.

Article written by Cathryn Ellis
01st April 2020

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