Warning sign construction site

In light of the Coronavirus shut down, the Federation of Master Builders (FMB) has urged government to support small and medium-sized construction companies with a package of immediate additional support to prevent wide-scale job losses and insolvencies.

The FMB recently submitted a letter to the Secretary of State for Business, Energy and Industrial Strategy, Chancellor of the Exchequer, and the Housing Secretary in response to the COVID-19 pandemic.

To date, SME builders have reported the following impacts:

  • Three-quarters (76%) say projects have been delayed or cancelled;
  • Just under two-thirds (64%) have seen a drop in enquiries;
  • Almost all (98%) estimate that one quarter (25%) or fewer of their staff can work from home; and
  • Almost one in ten (8%) have already had to make redundancies.

Two of the original asks have been met with wider measures, that is the deferral of VAT payments until the end of June and the extension of Statutory Sick Pay equivalents to the self employed.

However, there is a lack of action around the self employed, with government failing to extend the same rights to them as the rest of the UK workforce, which is supporting them by guaranteeing 80% of their wages. It has, however, deferred self-assessment income tax payments for July by six months.

Clarity around pay is ever more pressing as despite the lockdown, government has allowed construction sites to stay open, while enforcing further restrictions on travel. Small builders cannot work from home, while a lack of financial support for self employed workers and a lack of cash grants for companies creates confusion and anxiety.

The FMB originally asked the Government for:

  1. A three month tax holiday on VAT, PAYE and CIS payments. That Government delay the implementation of Reverse Charge VAT by one year;
  2. An extension of the £25,000 cash grant currently to construction firms;
  3. An equivalent rate of Statutory Sick Pay to the self-employed who fill 37% of industry jobs;
  4. The Coronavirus Business Interruption Loan Scheme to be quick and easy to use, and available as soon as possible.

The FMB is also calling on the Government to work with the Construction Industry Training Board to help employers keep their apprentices and start to issue construction industry-specific guidance.

On the 20 March government decided not to extend cash grants to small building companies, which the FMB described as a missed opportunity.

Brian Berry, Chief Executive of the FMB, said: “The government has overlooked the market in which small builders operate. Builders working in the domestic sector simply cannot work from home and are already feeling the impact of the pandemic as a result. The government must intervene as a matter of urgency if small building companies are to protect their workforces, avoid further job losses, and prevent building companies going to the wall.”

Berry continued: “We must not allow a repeat of the 2008 recession when one in three SME construction firms left the industry. Building new homes and levelling-up infrastructure will be key to rebuilding our economy after the virus has passed, and the Government will need an army of builders in place to deliver that.”

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