Are we really altogether now?

Barry J Ashmore of Streetwisesubbie.com discusses the major problems facing subcontractors in the industry.

If ever there was a time for clear and unambiguous leadership in the construction industry it’s now.

Recent tragic events have very publicly highlighted what happens when we get construction wrong, but what we don’t see is all the things that are wrong with construction in the UK but are hidden away under the surface.

No amount of hard work on a building’s decoration will overcome problems lurking under the surface. If the foundations are defective no amount of papering over the cracks will resolve the real problems.

But sadly, that is what I see in a construction industry that is almost unrecognisable from the one I joined 47 years ago! Worse still we seem to have developed a culture of spin, and BS, and smoke and mirrors that is not only infuriating it is actually exacerbating the problem.

The Smoke and Mirrors

Whilst the industry is facing a whole host of issues, payment is by far and away the biggest and most obfuscated issue. But the simple truth is that if you don’t get paid you don’t have a business.

If you spend most of your time trying to get paid you have less time to address all the other issues that need your attention, and as for planning for the future, you probably can’t think beyond the end of the month.

So, why are we as an industry failing to recognise this and why isn’t it being properly addressed?

Regrettably, it is such a major problem and such a controversial issue, that even when it is discussed the truth seems to be largely absent.

Here Are Some Facts

Streetwisesubbie recently supported a piece of statistically significant academic research. With some 502 respondents, its findings cannot be ignored. Some 354 of the respondents were Sub-Contractors, and over 70% of respondents had a turnover exceeding £1M.  Proper firms facing very real problems.

Here’s what the survey uncovered:

• A total of 87.17% of Subcontractor’s main issue of dispute was regarding payment, compared to 64.21% of contractors suggesting Contractors receives payment within the agreed terms more frequently than their Sub-Contractors
• Even on public sector projects only 25% of Subcontractors were paid on time, and on private sector projects that fell to just 15%
• Subcontractors were subject to set off on 88.7% of their projects and between 9 and 34% (depending on turnover) said they were subject to set off on every project!

So What’s To Be Done?

A staggering 95.66% believed that neither the government nor the trade bodies were doing enough to tackle the problems in the industry!

So, I say let’s start by cutting out the spin, and the BS, and the smoke and mirrors!

Lots of Contractors don’t pay their Subcontractors properly. What’s difficult about saying that?

Everyone knows what good payment looks like! Pay on time and value fairly

The Supply Chain Payment Charter isn’t even legally enforceable, never mind the fact that only a handful of major Contractors have even signed up to it!

And finally, the introduction next year of the Duty to Report on Payment Practices legislation requiring large companies to report on their payment practices. Some say that this will introduce real transparency for the supply chain.

And pigs will fly! The regulations are so woolly that they won’t tell anyone anything of real value, and you can rest assured that those companies that engage in such practices certainly won’t be reporting on their under-certification and wrongful set off.

Why Does It Matter?

Here are a few recent headlines to contemplate;

“Subbies and suppliers owed £7Bn in unpaid invoices”

“Subbies owed £4m after Titan Construction Management collapse”

“Subbies under attack from new breed of aggressive QS”

And some people wonder why there’s a skills shortage!

Frankly no amount of talking, is ever going to fix the problem. “Jaw jaw” might indeed be better than “war war” but for an awful lot of Subbies getting paid is a one sided battle, which they are never going to win without the big guns of proper legislation.

Without it we will never deliver the massive culture shift that is required to rid this industry of its morally bankrupt payment practices.

And, as for all sitting round the table together, it isn’t currently working, and I can’t see it ever working. After all the “Anti Fox Hunting / Pro Fox hunting Association” doesn’t sound like a group that’s going to please any of its members or agree on anything!

So Are We Altogether Now?

Maybe we can leave the last word to the lyrics of the old Farm song “Altogether Now”;

“All together now

All together now

All together now, in no man’s land

The same old story again

All those tears shed in vain

Nothing learnt and nothing gained

Only hope remains”

Or maybe we can all get behind a campaign for effective action to fix the problem once and for all, such as making our Fair Treatment Charter legislation, or adopting all of the other recommendations of the All Party Inquiry Into Late Payments conducted by Debbie Abrahams MP in 2013.

I’m happy to talk to any of the interested parties to see how we can help.

 

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