Clearview North October 2013 - Issue 143 - Page 24

industrynews Essential for Prosperity CAB Chief Executive, Justin Ratcliffe reflects on the recent Government Construction Summit and argues that we need both Investment and Fair Payment… “The long awaited Government Spending Review and Government Construction Summit in August both gave some new insight into the government’s construction strategy to 2025. “The Review saw £20 billion committed to schools and £3.3 billion to affordable housing during the life of the next Parliament. The Strategy document that followed set some bold targets to 2025 such as a 33% reduction in the initial cost of construction and the whole life cost of built assets. A little lost in the launch headlines was the promise that there would be a new Government Fair Payment Charter before the end of 2013, an issue on which CAB has lobbied hard for over the years. I felt, however, that there was a complete lack of assessment of the construction sector as it is now and while 2025 is not far away, for some businesses just getting to 2015 will ‘The industry is failing to create the conditions for its supply chains to thrive. This needs to change.’ 24 OCT 2013 be a challenge after at least 5 to 6 very tough years where volumes have held up but margins have taken a battering. The announcements or should I say clarifications of a number of infrastructure projects did provide some excellent forward planning information but the government strategy document does make the following admission in that, ‘Construction has been hard hit by the economic downturn. The impact of this is being particularly felt among the many small businesses that operate across the sector. The industry is failing to create the conditions for its supply chains to thrive. This needs to change.’ Lack of fair payment is an issue that has impacted heavily on the sector and this was emphasised only a few weeks ago on the Today programme by Debbie Abrahams MP for Oldham East and Saddleworth who convened and chaired a cross-party parliamentary inquiry about how to tackle late payment. The summary recommendations are listed at Debbie explained that around £36 billion was owed to SME businesses, an amount that affected over 124,000 companies. Sadly within that figure are a large number of firms within the construction sector including CAB members. During the same programme it was alleged that Tier 1 Suppliers on the whole were tending to pay on time, but it appeared ‘around £36 billion was owed to SME businesses’ did not apply further down the supply chain. The Fair Payment Charter promised by government is certainly a start but much more still needs to be done and CAB will be highlighting the issues and recommendations within the report and its members’ concerns at the Construction Products Association Parliamentary Reception on 22nd October. The simple fact is that for long term prosperity in our sector we critically need BOTH investment and fair payment.” Council for Aluminium in Building, Tel. 01453 828851 To read more, visit