Concerns grow for SMEs as construction sites start to shut

The government must extend its small business grants to construction and provide clear rules for site operations, or risk mass insolvencies amid the covid-19 crisis, the boss of the Federation of Master Builders has warned.

Brian Berry (pictured), chief executive of the FMB, said the organisation's members wanted to do the right thing, but that the advice coming from government was unclear. 

Brian berry fmb

He said: "I am calling on the government to tell my members, today, whether they can continue to go on site and work. Small builders cannot work from home, but without cash grants available now, they risk seeing their livelihoods lost. 
"Mixed messages are spreading further anxiety at a time when hundreds of small builders face immediate lost earnings, having to make their staff redundant, and seeing their companies go to the wall.

"The £25,000 grant must be extended to construction, support is needed for the self-employed which make up 37% of the industry, and applications for the job retention scheme must be brought forward.”

A cash grant of either £10,000 or £25,000 per property is currently available to small businesses in retail, hospitality and leisure. Only small businesses that have a property on which they pay rates are eligible. 

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The Specialist Engineering Contractors’ (SEC) Group has also expressed concerns over the impact of covid-19 on SMEs.

It said there were a number of concerns including sharp practices - which see risk associated with disruption or delay put on the supply chain - and the disruption to repair and maintenance contracts.

The weak balance sheets of the large tier-1 contractors also have implications for payment security along the supply chain – particularly if work is  significantly delayed.

SEC Group’s chairman Trevor Hursthouse has called on all clients of the UK’s construction industry to be on the look-out for distressed firms in their supply chains and to ensure that, as much as possible, measures are put in place to alleviate such distress.

Meanwhile, the Chartered Institute of Plumbing and Heating Engineering (CIPHE) has asked the government to help protect the livelihoods of the self-employed.

Kevin Wellman, chief executive of the CIPHE said: “There are approximately 200,000 individuals engaged in the UK plumbing and heating industry, with 85% of those operating as sole traders or in companies of five individuals or fewer.

"There is an urgent need to protect the livelihoods of those not covered by the government’s packages seemingly so far aimed at larger businesses."

Alasdair Reisner, chief executive of the Civil Engineering Contractors Association (CECA), said his membership also craved clarity but added that he did not think it would be possible – or correct – to close all sites immediately.

"When the briefing happened last night we immediately started getting calls from our members about what they should do," he said. "And while health must of course be the first and top priority, it is not as simple as shutting sites."

He said some sites could simply not be shut due to the stage of construction, while others should be kept open as they were providing essential services to the NHS or other emergency services.