Government Warned of Construction Cash Flow Crisis

THE GOVERNMENT has been warned of an impending cash-flow crisis in the construction industry by the National Federation of Builders (NFB), as its members continue to wait for the Government’s coronavirus Job Retention Scheme to open and be available to make payments.

The Treasury had previously pledged that the portal, set up to support businesses in paying furloughed workers, would become operational in time to make the first payments before the end of April.

However, the portal is still not operational and no date has been announced for when payments will be made.

Richard Beresford, chief executive of the NFB, said, “The Government must speed up the opening of the JRS otherwise those in the construction industry who have had to shut down and furlough staff will face a cash-flow crisis that will lead to closures. At the very least we must have clarity as to when the scheme will become operational and make payments”

Coronavirus risk management

The Government’s position is that construction sites can remain open, but the NFB is calling on construction companies to take a values-led, risk-managed approach in continuing to operate sites.

Richard Beresford, Chief Executive of the National Federation of Builders

Richard Beresford added, “Construction sites remaining open should have the support of the client and where a site or contractor wishes to suspend construction, the client should support closure and remobilisation costs. No contracting business wants to suspend activity, but the safety of staff and their families is paramount.

“Where sites wish or need to remain open and operational, they must operate in a safe manner by following Public Health England  guidance, the Site Operating Procedures and ensure the use of Personal Protective Equipment.”

The warning comes as the NFB joins with the Construction Leadership Council (CLC) in writing to the Prime Minister to set out the urgent action that needs to be taken to ensure the survival of the industry. ​