Small and medium sized construction building companies need urgent and immediate additional support from the Government to prevent wide-scale insolvencies and job losses, said the Federation of Master Builders (FMB) in a letter sent today to the Secretary of State for Business, Energy and Industrial Strategy, Chancellor of the Exchequer, and the Housing Secretary, in response to the coronavirus (COVID-19) pandemic.
Builders have reported the following impacts on their firms:
• 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, representing 58 individuals now without jobs.
The FMB is calling on the Government to:
1. Provide a three month tax holiday on VAT, PAYE and CIS payments. The Government must also delay the implementation of Reverse Charge VAT by one year;
2. Extend the £25,000 cash grant currently only provided to retail and hospitality to construction firms;
3. Provide the equivalent rate of Statutory Sick Pay to the self-employed who fill 37% of industry jobs;
4. Ensure that the Coronavirus Business Interruption Loan Scheme is quick and easy to use, and is launched as soon as possible.
The FMB is also calling on the Government to work with the CITB to help employers keep their apprentices; provide clarification to builders and householders whether social distancing means all domestic building work must stop even if all concerned are well; and start to issue construction industry-specific guidance.
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 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.”
Berry concluded: “The FMB is supporting its 7,500 members during this difficult time, through its dedicated helplines, tailored communication and guidance, and insurance services. We are also working closely with the Construction Leadership Council (CLC) as well as other industry bodies to ensure the industry is united through this crisis. I’m calling on the Government to match our efforts and ramp up their support for builders immediately.”