Industry representatives campaign for better payment practices to reduce insolvencies risk
Specialist Engineering Contractors’ (SEC) Group representatives have met with Lord Mandelson, secretary of state for Business, Enterprise and Regulatory Reform, to back project bank accounts.
This followed Mandelson’s statement that he would seek to improve cashflow for SMEs by requiring public sector purchasers to pay their bills within 10 days.
Claire Curtis-Thomas, the MP who led the SEC Group delegation, assured the secretary of state that the most effective solution for the construction industry was for the government to ensure project bank accounts were established as routine for all public sector contracts.
SEC Group chairman Trevor Hursthouse added that a positive response from Mandelson could significantly reduce risk of widespread insolvencies across the building industry.
According to Diane Johnson, who runs electrical contractor Eric Johnson of Northwich, businesses in the north-west were already experiencing difficulties caused by the current slowdown and lengthening payment periods.
“Firms are having to make redundancies, which will have an inevitable effect on apprenticeship investment and training,” said Johnson.
“The implementation of project bank accounts across UK construction would revolutionise payment practices and make a significant contribution to resolving problems affecting SMEs,” said Curtis-Thomas.
Electrical and Mechanical Contractor