Industry to industry: 'Do not delay payments'

The Construction Leadership Council (CLC) has criticised a number of firms for delaying payments and called on the sector as a whole to help each other by boosting cash flow at this time of crisis.

The CLC draws together business leaders from across the sector and has business minister Nadhim Zahawi as a co-chair.

It is working with industry federations to provide support and guidance on health and safety issues and pressing the Government to provide additional support to keep construction companies afloat during the current crisis.

The CLC leadership has also written an open letter to industry calling on the industry to play its part and keep money flowing.

The letter states: 'There are a number of businesses that have chosen to unilaterally delay payment or extend credit terms. We do not believe this is acceptable or appropriate – particularly at this time of great stress.'

Andy Mitchell the other co-chair of the CLC, said: 'We are increasingly concerned about the management of payment in the supply chain. All construction businesses should continue to pay in accordance with agreed contractual terms and firms should not be threatening to invoke penalty or other contractual clauses.

'Our joint priority must be to sustain the industry. All firms should think hard about how their reputation could be damaged by not doing the right thing during these difficult times.'

The difficulties created by the threat of COVID-19 will only be worsened if disputes and penalties are invoked throughout the sector, and if firms sit on cash meant for their suppliers, the CLC said.

The letter also notes that where the industry is asking for substantial support from the Government, it is less likely that this support will be forthcoming if the benefits are not fairly distributed to all parts of the industry.