A survey for Scotland’s Construction Industry Collective Voice reveals “persistent, deep-rooted payment challenges” across the industry.
Dozens of contractors were quizzed on their payment experiences: 80% reported experiencing delays or adjustments in receiving final payments, 63% faced unexplained payment reductions, intensifying their financial challenges and 43% had to write off disputed sums.
The Construction Industry Collective Voice (CICV) is an alliance of 28 professional bodies and trade associations in Scotland, chaired by the Scottish electrical contractors trade association, Select. It was formed in March 2020 as the Construction Industry Coronavirus Forum to formulate an industry response to the covid-19 pandemic.
It is now focused on its demands for reform of the industry to address payment delays.
Ian Honeyman, co-chair of CICV's procurement, quality and pipeline Group, said: "These findings underscore the severe impact that delayed payments, or even worse, non-payments, have on the viability of businesses, compounded by the strain from reduced credit facilities and retained funds.
“Despite well-publicised commitments from government and industry to address unfair and damaging payment practices in the UK and Scottish construction sectors, aimed at improving cash flow along the supply chain, we continue to observe poor behaviour in this area.
“Without substantial changes in these practices, attaining a financially stable and sustainable construction sector remains challenging.”
His fellow co-chair Len Bunton added: “Given that existing legislation or initiatives such as the Prompt Payment Code have not resolved these persistent issues, it is clear that we require more robust practical measures. The current state of affairs is unsustainable and demands immediate action."
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