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SELECT members face double whammy of late payments and rising costs

Sep 2018 General, Latest News | Comments Off on SELECT members face double whammy of late payments and rising costs

SELECT members across Scotland are being hit by a double whammy of rising costs and late payment, according to a new business survey that tracks quarterly activity and trends. The survey included input from members of SELECT, the Electrical Contractors Association, the Building Engineering Services Association and the Scottish and Northern Ireland Plumbing Employers’ Federation.

On the issue of payment, respondents to the survey confirmed that just under half of all payments from public sector bodies were made within 30 days. But by contrast, only 30% of payments from commercial clients were made within 30 days, with the rest taking up to 89 days to settle their accounts.

It also showed that the costs faced by companies shot up in the second quarter of the year, reflecting ongoing political uncertainty and wider international commodity ramifications.

More than 70% of respondents said that material costs were higher than at the start of the year while 29.51% said that the cost of being tendered to had risen.

Other Scottish Government initiatives to improve payment were having little overall impact with just over 10% of respondents saying that their organisations’ projects used Project Bank Accounts (PBAs).

Darrell Matthews, managing director of SELECT, said: “The construction sector is currently in a good place in Scotland, but this masks some bad practice in the industry, as this survey highlights.

“While it’s good to see some public sector clients’ efforts in the direction of fair payment policy heading in the right direction, it’s vital to ensure that SMEs, the lifeblood of the Scottish economy, are paid on time.

“It is also a tribute to the resilience of both small and large employers that they
are generally more optimistic about future work despite rising costs and recurring late payment issues.”

  • Almost one in three MPs (207) now support the Aldous Bill, following major efforts by BESA and ECA to secure support for reforming cash retentions in construction. The backing comes alongside an unprecedented coalition of more than 80 industry bodies and trade associations, representing over 580,000 businesses and sole traders. Following the collapse of Carillion in January, the Aldous Bill has drawn endorsement from big political hitters, including MPs John McDonnell, Ken Clarke and Sir Vince Cable. While the bill has secured broad cross-party support, Labour (96) and Conservatives (76) make up the majority of parliamentary support.