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SME’s face uncertainty of government support following Carillion collapse

Iain McIlwee, CEO British Woodworking Federation, said:

“As the news of the liquidation of Carillion breaks, it is almost ironic that we are putting our final comments in on the Government’s consultation into retention payments in the construction industry. This debate is not about whether the state should bail out Carillion, but whether Government can in all conscience turn its back on a supply chain of SMEs who will end up carrying the can for poor procurement, bad business management and an endemic failure by the Government to address some of the archaic procurement practices surrounding late payments and retentions that place risk unfairly on SME sub-contractors. Many of the creditors are SMEs and the sums, whilst likely to be significantly lower than the liquidators will take, could define the future of these businesses – it would be a gross injustice if their money unfairly held is lost in this process.

“Frankly to my mind the Government is complicit in the sorry saga that is unfolding and we need decisions fast. As a short term we need to see some security against these retentions and unjust payment clauses. Moving forward we urge the Government to develop a structured and more consistent legislative process to deal with market failures, be they banks, construction firms or steel manufacturers. We cannot rely on arbitrary decision making and political posturing. There needs to be clear process to ensure those responsible foot the bill and ensure society and supply chains do not suffer unduly. The Government consistently fails to recognise the stress of running a small business and keeping people employed – a lot of business owners in this supply chain won’t be sleeping soundly until this is resolved.”

The British Woodworking Federation (BWF) represents the UK’s £3.8bn woodworking sector, a craft at the heart of the UK’s construction sector, which employs approximately 60,000 people around the country.