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Fears some will fail

Construction firm demands date for furlough payments

Construction firms want to know when money will be released

A Scottish construction firm has warned that ‘extreme pressure’ is being placed on the industry because of a failure by government to say when payments under the Coronavirus Job Retention Scheme kick in.

Advance Construction Scotland, which employs more than 1,600 workers, says the lack of a timescale for furlough payments had left many companies fearing for their future.

Seamus Shields, who established the family-owned company 25 years ago, called on the UK and Scottish Governments to look at an emergency funding package similar to that announced for the hospitality and tourism sectors.

“Our company is working across more than 200 live construction sites and has a payroll stretching to seven figures per week. We also have 500 sub-contractors and over 2,000 companies on our supply chain who all depend on us. Nearly all work has ceased instantly,” he said.

“The job retention scheme was welcome news at first but the lack of detail is staggering. The claims system will apparently be open by the end of April but no one can tell us when payments will be made after a claim is entered.

“In the meantime, banks are providing little clarity to the sector on how we can maintain cash flow to ensure staff wages and contracts can be paid. People’s rents, mortgages, food and utility bills – all of these payments rely on the sector urgently being given the certainty it needs. We need that clarity now.

“All of us recognise the demands on government but extreme pressure is being placed on the industry and my fear is that if some companies collapse then others in the chain will soon follow.

“Any decision we take to furlough staff has to be made with the knowledge of how claims will be handled by government and precisely when the payments will arrive.”

Mr Shields added that the situation had been made more complicated by the differing approach between the UK and Scottish Governments regarding continuation of construction.

“The Scottish Government has told the sector to cease activity in line with social distancing guidance. We are supportive of their direction as stopping the spread of COVID-19 and helping our brilliant NHS is the fundamental priority.

An emergency funding package should be made available

Seamus Shields

“South of the border, however, many construction sites are still operating. That is creating issues in the industry and raises questions about why some companies will need financial support and others will not.

“An emergency funding package should be made available to bridge the gap and keep companies paying wages before any furlough payments are eventually released.

“This would encourage the sector to cease all activity and also ensure the industry was ready to quickly get going again once Scotland and the UK is back on its feet.”

The Scottish Government issued renewed guidelines today confirming that work on construction sites, unless it is for essential projects, should stop immediately.

“The guidance makes clear that work on construction projects should cease unless it is supporting crucial work during the coronavirus (COVID-19) pandemic,” it said.

“Any project deemed essential can only continue operating if it can comply with guidance on social distancing, safety and welfare during the COVID-19 outbreak. Any site unable to meet these requirements should close.”

Essential projects include:

  • those to create or repurpose facilities which will be used directly in COVID-19 related activities
  • projects to create or repurpose facilities which will be used to accommodate key workers, or free up space in facilities to be used directly in COVID-19 related activities
  • projects which are considered essential public services
  • the repair and maintenance of critical infrastructure

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