Monday, May 4, 2020

Minister condemns ‘David versus Goliath’ payment abuse

Too many large firms have changed their payment terms during the current COVID-19 crisis to protect themselves at the expense of smaller businesses, according to the Minister for Small Business.

Paul Scully MP told a recent webinar hosted by the Building Engineering Services Association (BESA) that the government would be “calling out” those companies who indulged in poor payment practices during the pandemic.

“Everyone must be responsible and play nice,” he said. “The government should be taking the lead at both central and local level by setting a good example on payment practices – we want to keep working with our supply chains.

“However, far too many big businesses are changing their payment terms, which is creating a huge David versus Goliath impact,” Mr Scully said. He asked BESA to point out examples of payment abuse to his department, but equally to highlight best practice that could encourage others to follow suit.

He repeated the Prime Minister’s warning that, when this is all over, people would be asking: “What did you do to help other businesses and your community?”

The Minister also said the government was looking at how some of the £4.5bn held in retention payments might be released to help cash flow in supply chains.

He also acknowledged the important role construction would play in the economic recovery and said the government was keen for projects to continue so long as it was safe for workers. He said companies should be preparing for a return to work, but that it would happen gradually.

“We are looking at this workplace by workplace so that there are as few surprises as possible for businesses.”


He warned building owners to look at how they could re-open their premises safely to ensure there was no further spread of COVID-19 when people returned and to guard against the threat of legionella bacteria having built up in under-used water systems. He welcomed the fact that BESA’s recently updated and relaunched SFG30 ‘Mothballing and Reactivation’ guidance was now widely available to help manage the process of re-starting building systems.

Mr Scully said “greening the economy” would be at the heart of the recovery and that the department for Business, Energy and Industrial Strategy (BEIS) was looking at ways to accelerate some of its existing carbon reduction initiatives.

He also confirmed that the changes recommended in the Hackitt Review would still be going ahead, although the COVID-19 crisis might have an impact on how they were delivered. “People are still living in fear…and we need to find ways to make sure they feel safe in their homes,” he told the BESA webinar.

BESA chief executive David Frise said the building services sector was grateful for the range of government support schemes, which would save a large number of businesses, but he asked for the Coronavirus Job Retention Scheme to be made more flexible. A number of BESA members said the current system made it difficult for them to take on small and short-term projects as they could not take staff off furlough for short periods.

Mr Scully said the government was continually looking to improve the flexibility in all of its schemes to ensure financial support was reaching as many businesses as possible.

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