Small business representatives meet minister to discuss ways to soften blow of economic downturn
Representatives from more than 60,000 engineering firms have met with business secretary Lord Mandelson to report on the impact of the economic downturn on small firms in the construction industry.
The meeting followed the minister's statement in the House of Lords on 22 October promising to improve cash flow for SMEs by forcing public sector purchasers to pay their bills within 10 days.
The delegation was led by Claire Curtis-Thomas MP, who advocated the use of project bank accounts to help firms cope with the credit crisis.
“The implementation of project bank accounts across UK construction will revolutionise payment practices in the construction industry,” she said. “At the same time they will make a significant contribution to resolving the current problems affecting SMEs, as already highlighted by Lord Mandelson.”
She added that the government should establish project bank accounts as a matter of routine on public sector projects.
Trevor Hursthouse, chairman of the Specialist Engineering Contractors' Group, said that the positive response from Mandelson could provide a “timely solution to insolvency risk which is probably more acute in construction than in any other industry”.