The Government must learn from Carillion’s demise and assess its over-reliance on major contractors, according to the Federation of Master Builders (FMB).
Commenting on this morning’s announcement that Carillion is to enter compulsory liquidation, Brian Berry, Chief Executive of the FMB, said: “Carillion’s liquidation is terrible news for all those who work for the company and it will have serious knock-on effects for the many smaller firms in its supply chain, some of which will be in serious financial danger as a result of Carillion’s demise.”
Berry concluded: “Carillion’s liquidation raises serious questions for the Government, not least about its over-reliance on major contractors. The Government needs to open up public sector construction contracts to small and micro firms by breaking larger contracts down into smaller lots. That way, it can spread its risk while also reaping the benefits that come from procuring a greater proportion of its work from a broad range of small companies. Construction SMEs train two-thirds of all apprentices and are a sure-fire way of spreading economic growth more evenly throughout the UK.”
LATE NEWS (17 January 2018):
Banks must show leniency to the thousands of SMEs in Carillion’s supply chain, according to the Federation of Master Builders (FMB).
Commenting on UK Finance’s announcement that the major banks and the Government are working closely to limit the impact of Carillion’s liquidation on small and medium-sized builders (SME) firms, Brian Berry, Chief Executive of the FMB, said: “It’s absolutely critical that the banks give the innocent victims in Carillion’s supply chain as much leeway as possible in the short to medium term.
“We therefore welcome UK Finance’s announcement late this afternoon that lenders are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers, to ensure those facing issues relating to Carillion’s liquidation can stay on track. Leniency from the major banks will make all the difference to the thousands of firms in Carillion’s supply chain as to whether they survive its collapse, or follow suit. The construction industry is the cornerstone of the UK economy so it’s in all of our interests to do what we can to support these small companies and limit the domino effect that Carillion’s demise could have.”
About the Federation of Master Builders
The Federation of Master Builders (FMB) is the largest trade association in the UK construction industry representing thousands of firms in England, Scotland, Wales and Northern Ireland. Established in 1941 to protect the interests of small and medium-sized (SME) construction firms, the FMB is independent and non-profit making, lobbying for members’ interests at both the national and local level. The FMB is a source of knowledge, professional advice and support for its members, providing a range of modern and relevant business building services to help them succeed. The FMB is committed to raising quality in the construction industry and offers a free service to consumers called ‘Find a Builder’.
For more information, visit: www.fmb.org.uk.