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Building firms face ‘widespread insolvencies’ without government action over coronavirus
The Federation of Master Builders (FMB) has written to the government to demand it provides support to small and medium-sized (SME) construction firms in order to prevent wide-spread insolvencies and job losses due to coronavirus.
In a letter sent to the housing secretary, chancellor and business secretary, Brian Berry, chief executive of the FMB, wrote: “I cannot stress enough that for many small building companies the impacts of COVID-19 are being felt immediately, and most firms cannot wait days or weeks, let alone months for financial support.”
A survey of the FMB’s 7,500 members found that 76% of respondents said they have projects which have been delayed or cancelled due to the outbreak.
Meanwhile, 64% of respondents said they have seen a drop in enquiries, while 8% said they have already had to make redundancies – a total of 58 individuals have been made redundant so far.
The FMB is calling on the government to provide a three-month tax holiday on VAT, PAYE (pay as you earn tax) and CIS (Construction Industry Scheme) payments for SME buildings, alongside an extension of the £25,000 cash grant being offered to small businesses to include construction firms.
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Earlier this week, chancellor Rishi Sunak announced that small businesses affected by coronavirus could apply for government grants of up to £25,000, however this currently only applies to the retail and hospitality industries.
The FMB is also calling on the government to provide Statutory Sick Pay to self-employed people, who make up 37% of construction industry jobs, as well as ensure that the Coronavirus Business Interruption Loan Scheme is launched as soon as possible.
The Coronavirus Business Interruption Loan Scheme was announced by the chancellor on Tuesday and offers loans of up to £5m for SMEs through the British Business Bank.
Mr Berry 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.
“We musn’t 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.”
The Ministry of Housing, Communities and Local Government has been approached for comment.
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