Home News Construction calls for more support to avoid rise in insolvencies

The Construction Leadership Council (CRC) has outlined how the construction sector could support the UK’s recovery in line with the Government’s key policy priorities to achieve Net Zero, Building Safety, Levelling Up, stimulating economic activity and protecting jobs. However without further financial support many companies will become insolvent.

In a letter to the Chancellor this week, Andy Mitchell, the CLC Chair, said: “Despite this support, our industry remains in extremely challenging times as we continue to adapt to ongoing Covid-19 rules, mitigate the impact of Brexit and prepare for the forthcoming implementation of rule changes on IR35 and the Construction Industry Scheme.”

In emphasising that although the construction sector has continued to operate it has suffered a serious financial impact as a result of project delays and costs incurred in adapting working practices. CLC said that this has resulted in many contractual disputes which CLC monitoring suggests are currently growing and which will accelerate further still.

Mr Mitchell added: “We are currently quantifying the impact; however, it is reasonable to assume that without further financial support many companies will become insolvent.”

Seperately Brian Berry, Chief Executive of the FMB, said: “These are difficult times for builders who are weathering a storm of product delays, material prices rises and a drop in consumer confidence. The Government has been clear that construction should stay open, and local builders stand ready to support our economic recovery. But they need greater support to build back better and greener across the country, as shown by today’s figures and echoed in the FMB’s State of Trade research.”

The CLC’s submission to the Chancellorahead of the Budget Statement on 3 March 2021 has highlighted a number of key interventions to drive immediate economic growth and market confidence.

The proposals from the CLC included: Committing to a National Retrofit Strategy; Offering Incentives for the commercial property sector; Expanding the Building Safety Fund; Making the Infrastructure Bank an effective vehicle for regeneration; Securing Local authority funding; Extending the Stamp Duty Holiday and Duty review; Withdrawing Reverse Charge VAT; and Extending employer apprenticeship incentives and Apprenticeship Levy flexibility.

 

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