Construction 'forgotten'

Builders call for similar help as hospitality sector

Advance Construction

Work on Scottish construction sites has stopped

Construction firms, currently unable to work, are calling for the same support offered to the hospitality sector as they see cash beginning to dry up.

The Scottish Building Federation (SBF) wants the UK and Scottish Governments to offer support similar to that given to other sectors forced to close due to Covid-19.

A survey of members revealed more than three-quarters have seen all cash flow stop, whilst 95% have furloughed at least 80% of their staff.

Whilst the retail, hospitality and leisure sectors have been designated “heavily-impacted” sectors who benefit from 100% rates relief, and further grant funding, the construction sector, which employs over 170,000 people and makes up 10% of Scotland’s GVA, has received no specific support. 

The SBF’s survey also indicated that only 36% are eligible for the £10,000 grant funding offered through the Small Business Bonus Scheme (SBBS) and Rural Rate Relief (RRR).

Over a hundred SBF members responded to the survey undertaken during the past week and reinforces the findings of the survey by the Construction Industry Coronavirus Forum (CICV Forum) of which SBF is also a member.  Key findings include:

  • 95% have furloughed between 80 -100% of their workforce.
  • 76% report that cashflow has stopped entirely
  • 36% have indicated that they are eligible for £10,000 grant funding through SBBS and RRR
  • 98% of sites controlled by SBF members are closed in compliance with guidance issued by the Scottish Government, with the remainder falling under the ‘essential work’ category.
  • 71% want similar support to that offered to retail, hospitality and leisure sectors that have also been told to shut

Unlike the retail sector the construction sector cannot adopt alternative measures of getting their product to market, therefore it has no other means to generate revenue and bring cash into the business whilst sites remain closed.

Also unlike the retail sector, where cash flow returns as soon as customers buy products or services, cash will not start to flow into construction businesses immediately after the sites reopen.

Work has to be carried out before any payment will be received and given the payment processes involved under the majority of construction contracts, the cash will not start to flow into businesses for a period of around two months following a return to work.

One Comment to Builders call for similar help as hospitality sector

  1. Hi
    The construction industry definitely seems to have been forgotten. We applied for a grant from the council for the 10k and we were turned down because our rateable value is over the 18k, should that not be reason to support is at this difficult time. We have been employing about 70 local people for the last 30 years! Many Thanks. Alex

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