Build UK’s update the industry amid the covid-19 outbreak
Build UK and a number of its Trade Association members met with Paul Scully, Minister for Small Business, Consumers and Labour Markets, yesterday to discuss regulatory changes and other issues that would support SMEs during and after the coronavirus (COVID-19) crisis. The Minister recognised the value of SMEs, stating that “people will look back on this time and ask businesses what did you do to support your supply chain and community during the coronavirus pandemic”
Build UK Chief Executive Suzannah Nichol was one of five representative organisations invited to speak on behalf of small businesses and requested the minister’s support for the following:
- Permission to Work
- Reiterate the message that construction companies of all sizes are being asked to continue their operations alongside the Government’s ‘stay at home’ policy
- Provide clarity on the work that tradesmen are able to carry out in people’s homes
- Increase capacity on public transport, providing a safe way to travel to work.
- Liquidity and Cash Flow
- Ensure banks are efficiently processing government-backed loans
- Delay or stop the introduction of Reverse Charge VAT in October 2020
- Stop the withholding of retention monies by the public sector and release retention monies currently withheld
- Effectively and consistently implement PPN 02/20 across all public authorities.
- Maintaining Productivity
- Confirm and accelerate public sector construction work in the pipeline
- Ensure planning departments remain operational
- Agree extended working hours for construction projects
- Introduce flexibility into the furlough scheme.
The Construction Leadership Council (CLC) has researched the impact of the Government-backed loan schemes, with the support of Build UK Alliance member, the Institution of Civil Engineers (ICE), which has published a short report. A number of the recommendations designed to improve the various schemes have already been taken forward, including the launch of the bounce back loan scheme for small businesses from 4 May 2020.
Key findings of the research include:
- Of the companies that had applied for a loan:
- 12% had their application approved
- 30% had their application refused
- 58% were awaiting a decision
- Reasons for applying for a loan were:
- 40% for a short-term facility to aid cash flow
- 48% for up to two years funding to cover costs of disruption
- 12% for a longer-term source of funding to help rebuild finances
- The key challenges for businesses were:
- The absence of a clear and consistent application process
- A lack of consistency in assessing business viability
- A queue of applications
- Banks offering existing products and services rather than offering the new loans
Recommendations from the CLC include:
- The need for guidance to support firms in making a loan application, and the Institute of Chartered Accountants in England and Wales has published a helpful checklist
- Clearer information should be provided by the banks on the rates offered for the products available
- A prioritisation system for processing applications according to the following:
- Essential to business survival
- Companies delivering projects supporting public services
- The introduction of flexibility for payback periods and rolling credit facilities
- The removal of early repayment charges.
Following an excellent response to Build UK’s materials and accommodation survey, it will now remain open until 5:00pm today. Please take a few moments to share your demand for materials, products and accommodation to help us open up the supply chain.
Businesses should continue to follow the most up-to-date government guidance and for the latest updates please follow Build UK on Twitter and LinkedIn. If you have any construction-specific queries or feedback on what is happening within the industry, please contact Build UK.