The OFT’s fines are as unpleasant as they are unnecessary but as an industry we must move on
Everybody knows – including the OFT - that cover-pricing in the construction industry was a widespread practice. So it seems unfair that a small number of companies, geographically sampled, have had to take a financial hit while others have escaped without any sanctions. And extraordinary that some companies have seen really massive fines.
These fines could not have come at a worse time for the industry as the economic situation continues to deteriorate. Why did the OFT need to impose financial penalties at all? Surely it could have encouraged the industry to eliminate this practice without adding to its financial woes.
While today’s decision will have a serious impact on a few, the industry as a whole must learn lessons. No contractor should be in any doubt that the practice of giving or taking a cover price is deemed to be illegal and could result in severe financial penalties for the company, as well as criminal prosecution and/or director disqualification.
The industry has been working closely with the Office of Fair Trading to ensure that contractors are aware of their obligations under competition law. In particular, the UK Contractors Group supports the industry-wide code of competition law compliance launched on 20 August and each of its members has procedures in place to ensure that breaches do not occur.
Now the investigation is over, we must all move on and ensure that the companies who have been fined for past practices are not discriminated against in the future.
UKCG therefore welcomes the guidance issued by the OFT (www.oft.gov.uk/constructionadvice) which seeks to ensure that those companies fined today are not further penalised by public sector clients refusing to do business with them.
UKCG has itself written to many clients in the public sector, including all local authorities, setting out the background and context of this investigation.
Stephen Ratcliffe, director of UKCG