Thursday, May 3, 2018

Support grows for payment reform

The decision to postpone the second reading of the Aldous Bill will give the construction industry more time to build support for lasting change to unfair payment practices, according to the Building Engineering Services Association (BESA).

The Bill, which seeks to ensure retentions money owed to sub-contractors is protected from misuse and loss, is now scheduled to be put before the House of Commons on June 15 following its postponement from last week.

Meanwhile, support for the change has continued to grow with 130 MPs and 78 trade bodies now behind the Bill championed by Peter Aldous MP.

“Industry support for the reform of outdated payment systems is at unprecedented levels,” said Mr Aldous. “Construction is an essential underpinning of our lives and work, and we need to support the industry and especially SMEs to ensure future growth and prosperity.”

He explained that the pressure on government time and the sheer volume of proposed legislation meant the Bill’s second reading had to be held back until June, but that the campaign was “stepping up”.

“We are also working to demonstrate [to government] that retention deposit schemes will have a positive economic impact and offer a net gain to both the Treasury and SMEs,” said Mr Aldous.

This issue was given added urgency by the revelation that business failures across the construction sector soared by more than 73% in the first quarter of this year. The collapse of Carillion, which was holding £800m in unpaid debts to sub-contractors, was a huge contributor to this surge in insolvencies. The research from Creditsafe also revealed that bad debts in construction leapt by 66% in the same period.

“These figures are truly shocking and show just why the work being led by Peter Aldous is so important,” said BESA’s public affairs and policy manager Alexi Ozioro.

“However, momentum is now clearly behind reform and the Aldous Bill has generated a tremendous level of political and industry support,” he said. “The campaign continues to grow and strengthen, but we have a lot of work to do and the extra two months gives us a great chance to further grow the support for change.”

A group of industry leaders representing more than 355,000 businesses joined Mr Aldous to present a petition on late payment to the Prime Minister last week. Federation of Small Business chair Mike Cherry, Federation of Master Builders chief executive Brian Berry, director general of the Institute of Directors Stephen Martin, and the chief executives of BESA and the ECA David Frise and Steve Bratt accompanied Mr Aldous to 10 Downing Street.

“This is the largest coalition on fair payment ever,” said Mr Aldous. “We have a golden opportunity to improve the industry for the better, level the playing field for SMEs and protect thousands and thousands of jobs. The industry loses around £1m for each working day, mostly from SMEs.”

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