The National Federation of Builders (NFB) is warning the Government of an impending cash-flow crisis in the construction industry as its members continue to wait to hear when the Government’s Coronavirus Job Retention Scheme (CJRS) will 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 open the week beginning 30 March 2020. However, the portal is still not operational and is not scheduled to be so until the end of April, with no date as to when payments will be made.
Richard Beresford, chief executive of the NFB, commented: “The Government must speed up the opening of the CJRS 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”
The Government’s position is that construction sites can remain open but the NFB is calling on members to take a values-led, risk-managed approach in continuing to operate sites.
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 (PHE) guidance, the Site Operating Procedures (SOP) and ensure the use of Personal Protective Equipment (PPE).”
The warning comes as the NFB joins with industry colleagues in the Construction Leadership Council (CLC), writing to the Prime Minister to set out the urgent action that needs to be taken to ensure the survival of the industry.
The Federation of Master Builders (FMB) is calling on the Chancellor to address the blockages in the Coronavirus Business Interruption Loan Scheme (CBILS), as small builders across the country are struggling to keep their businesses afloat. It follows an FMB survey of 579 members this week that found:
- Half (50%) of FMB members who have applied for the Coronavirus Interruption Loan Scheme (CBILS) have found the process either ‘somewhat’ or ‘very difficult’.
- So far, 10% of FMB members who have applied for a loan have been rejected with the vast majority (84%) still waiting to hear back from their bank
- 29% of SME house builders believe they are not able to apply for a loan through the scheme
- Local builders are being asked for a personal guarantee on application, or being forced to take out an overdraft with high interest.
Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said: “While we understand the immense pressure banks are under at the moment, the Coronavirus Business Interruption Loan Scheme needs to be fast-tracked and the criteria clarified as soon as possible to stop small construction firms going to the wall."
“While we understand the immense pressure banks are under at the moment, the Coronavirus Business Interruption Loan Scheme needs to be fast-tracked and the criteria clarified as soon as possible to stop small construction firms going to the wall."
Berry continued: “I am hearing time and time again about members who have been told by their bank that they will get back to them and never do, and others who have had to wait for hours on the phone to speak to their bank manager. Others have been told by their lender that they must apply by post. It is no wonder that members are reporting they are finding the process difficult. Sadly, we are still hearing of members who are being asking for a personal guarantee or being forced to take out an overdraft with high interest.
“There also seems to be some confusion as to who is covered by the scheme. SME house builders are crying out for financial support, but many are being turned away by lenders. The Government should work with Homes England and the devolved administrations to help find a way to keep SME house builders afloat in this time, ensuring that they are ready to resume building high quality homes after the coronavirus outbreak.”
