Dysfunctional supply chains must be addressed

That’s the headline in Construction News today (Wednesday 30 October 2013) and it’s all about the Department for Business, Innovation and Skills having commissioned EC Harris to undertake research into the structure of construction supply chains to inform the government’s industrial strategy. 

But What About The Specialist Contractors Themselves?

The report does highlight some very important issues and failings in the industry, and to quote Simon Rawlinson head of strategic research and insight at EC Harris

“The team found that construction supply chains are highly fragmented, and furthermore, that the level of fragmentation increases in supply chains that are directly involved in the delivery of construction work on site.”

Aside from the fact that just about every Government report into the UK Construction Industry since Adam was a lad has concluded much the same thing, what does the report say about the Specialist Contractors themselves think it should be fixed?

Well sadly – not a great deal.

And in my book that’s an opportunity lost, because as the Government’s earlier report this year identified Specialist Contractors as of “system wide importance”.

So why didn’t this report canvas the views of those Specialist Contractors about what should be done to address the “dysfunctional supply chain”?

And therein lies the problem!

The 3 stated objectives of the report were all about “cost saving” and “competing”.

So here we have a report designed to find out how to save costs, which concludes that the industry is broken!

Forgive for pointing out the bleeding obvious (as Lord Sugar would say), but that’s something we have been saying for the last year. Indeed “Specialist Contracting Is Broken – What Can We Do To Fix It” was the title of our sell out conference for Specialist Contractors this summer!

The Single Most Important Issue Overlooked

What the report doesn’t properly properly address or offer any solutions to, is the way in which the industry is paid!

It does limply say that “Sub-Contractors state that payment performance is worsening and payment periods are being extended…”

But here’s where I take issue with its authors, because it says “payment periods are being extended as a result of current market conditions.”

WHAT? What did you say “current market conditions”. Is that not an insult to all Specialist Contractors who know what’s really going on!

Strangling the flow of money to its supply chain is the only way many unscrupulous Contractors know how to make their slim profits and their massive returns on capital employed.

And what does this report recommend in regard to payment?

“The review of financial arrangements including bidding and payment with a particular emphasis on…” wait for it  “ the role of supply chains in cost lead procurement and maintenance of cash flow at all levels of the supply chain…” and here’s the biggest irony ”…including Tier 1”

OMG here we go again let’s not just fix the payment problem. Oh no. Let’s have another review!

If your car breaks down at the side of the motorway, the AA, the RAC, the Police and the Highway Traffic Officers all sticking their head under the bonnet and concluding “it’s broken” is NOT going to get it fixed.

In fact it will just serve to annoy you even more, and frankly that’s what’s going on at the moment. Specialist Contractors are sick and tired of suggesting that we need yet another review!

They are particularly sick and tired of another recommendation like the one quoted above that says we mustn’t forget the Tier 1 Contractors!

That’s a bit like saying we need to ensure that the top of the range BMW that the Police Officer arrives in to check you have broken down is always immaculately polished!

Please Mr Fallon, Dr Cable, and Mr Cameron, stop looking under the bonnet and fetch a mechanic!

Advertisements

David Cameron Is On High Alert, Let’s Force Real Action Against Late Payment While We Can!

After last Sunday’s investigation into late payment on BBC Radio5Live caused such an uproar about the failure of the Prompt Payment Code and the lack of action by the Government to help the situation, David Cameron ‘coincidently’ made a politician’s promise to ‘help small businesses get paid on time’.

That’s all good and well Mr Cameron, but it means nothing to us without some serious action to back it up. And we know that the only way to get action out of the Government is to take action ourselves!

Due to the overwhelming response received on last week’s late payment investigation show, BBC Radio5Live are doing a follow up TOMORROW (Sunday 20 October) and have invited Minister of State for Skills and Enterprise Matthew Hancock on to the programme. As well as listening in, there are plenty of actions you can take to help do your bit in the battle against late payment, and the more YOU do, the more Cameron has to listen and follow suit!

Please ensure you listen in and respond by text to the number the BBC give out, or email goldberg@bbc.co.uk.

Please tweet about it now at @BBC5Live with #buildfair4all, and especially on Sunday during the programme.

You can also do the following to help:

• If you haven’t done the survey yet please do so by clicking here, it takes just 2 minutes!
• If you haven’t already had a listen to last week’s show please do so by clicking here.
• Add your own story of payment abuse on the BBC News website.
• Invite all UK Specialist Contractors to come and join our Free LinkedIn Group.

• Follow us on Twitter: @Streetwisesubbi and tweet #buildfair4all
• Check out the free resources at StreetwiseSubbie.com
• Get in touch with me via email: barry@streetwisesubbie.com

 

We have recently been described as a “pressure group”, but we are so much more than that!

Remember we are here to help all Specialist Contractors irrespective of size or specialisation and we provide a fantastic support network.

Why not come and see just how much we have to offer you and your business?

Thanks and best regards

Barry

Construction Payment Abuse! Cameron Says He Will Act But He Won’t Unless You Do!

Last Sunday I told BBC Radio 5Live’s Adrian Goldberg that the Prompt Payment Charter doesn’t work, and we have the proof.

David Cameron Says He Will Act – But He Won’t Unless You Do!

Call me cynical but the only thing that matters to David Cameron is trying to get re-elected.

That’s not a political statement (I voted for them for Pete’s sake). I’s not political because I believe that is true of most politicians. Debbie Abrahams (and this isn’t political either) is fighting hard on this issue, and deserves tremendous credit.

Let’s face it the government have had plenty of time to deal with the national disgrace that is payment abuse in the construction industry, but they haven’t.

So why believe them now?

The only way that to force their hand, is if the whole dirty business of payment abuse is properly explained to the British public and they say enough is enough.

In no other industry do companies get away with the corporate theft that some Contractors are getting away with.

Instead the Government rewards them by giving them more work and paying them with your money!

How perverse is that?

Despite the introduction of the Government’s Prompt Payment Code, the reality is that less than 4% of Specialist Contractors who had worked on Government projects in the last 12 months were paid within 30 days!

Almost 150 Specialist Contractors have done the survey, but if you haven’t done it yet please do so here; http://www.surveymonkey.com/s/27KT6W3.

We MUST take this opportunity to make this the biggest survey of it’s kind. It is already credible, but please help to make it unstoppable!

Please DO NOT be the one that lets the side down by not doing the survey!

And please do your utmost to help.

If you haven’t listened to the show, it’s here; http://bbc.in/17nDzpI

Add your own story of payment abuse here on the BBC News website; http://www.bbc.co.uk/news/24497762

The show went out live last Sunday, but then what a coincidence!

The day after the Radio5Live investigation Prime Minister David Cameron announced a consultation to look at helping small businesses get paid on time?

They have been “consulting” and prevaricating for years!

So WHY do YOU think he did that? It can only be because the government sees this as an issue on which they have been incredibly weak, and it’s an issue that isn’t going away any time soon.

They also know that the British Public will see the real motives for supporting the big businesses rather than the small ones.

WE MUST KEEP UP THE PRESSURE!

BBC Radio5Live are doing a follow up this Sunday 20 October and have invited Minister of State for Skills and Enterprise Matthew Hancock on to the programme. Please ensure you listen in and respond by text to the number the BBC give out, or email goldberg@bbc.co.uk

Please tweet about it now at @BBC5Live with #buildfair4all, and especially on Sunday during the programme.

If he really wants to do something effective, rather than just B.S. about it, here’s my invitation to Mr Cameron to meet me!

https://streetwisesubbie.wordpress.com/2013/10/15/david-cameron-says-government-could-fine-late-payment-firms-and-pigs-might-fly/

Now We Need Your Help To Stop Payment Abuse Destroying The Industry

Here’s what you can do to help;

• If you haven’t done the survey yet please do so
• If you haven’t already had a listen to the show please do so
• Add your own story of payment abuse on the BBC News website.
• Invite all UK Specialist Contractors to come and join our Free LinkedIn Group http://linkd.in/cvfM9X
• Follow us on Twitter @Streetwisesubbi and tweet #buildfair4all
• Check out the free resources at StreetwiseSubbie.com
• Get in touch at barry@streetwisesubbie.com

We have recently been described as a “pressure group”, but we are so much more than that!

Remember we are here to help all Specialist Contractors irrespective of size or specialisation and we provide a fantastic support network.

Why not come and see just how much we have to offer you and your business?

Thanks and best regards

Barry

“David Cameron says government could fine late payment firms” And pigs might fly…

Mr Cameron announces a “consultation on late payment”.

Forgive me if I don’t get too excited just yet, and here’s the headline that illustrates why.

“Government promises action after subcontractors reveal payment delays”

The only problem is that was dated 26 July 2010!

So please Mr Cameron, if you genuinely want to do something positive and would like to meet myself and some Specialist Contractors to discuss this issue, it can easily be arranged.

This is a problem that requires a fundamental shift in attitudes which must be supported by either legislation, or Government sanctions against those firms that say one thing and do another.

Here’s a quick example of how far from reality PPC and talk of payment dates for “invoices” actually is.

A publicly funded project has this provision in the contract as between the Contractor and the Sub-Contractor;

“Tax Invoices shall not be submitted to the Contractor by the Sub-Contractor”

Why should taxpayer’s money be handed over to Contractors within 7 days on some projects, and then those Contractors be allowed to hang on to that money for 60, 90 or even 120 days, and then the firms that have paid the wages and paid for the materials, and taken all the risks, then have to pay a fee to get paid if they want to be paid what is laughingly called “early”.

How, is it acceptable that at the end of the job, a Contractor can say to the Specialist Contractor, with little or no credible proof – “you delayed us for 9 weeks and you caused us to incur £300,000 of additional costs, which we are going to “set off” from what we owe you!

Please, stop supporting the firms that are destroying, and I do mean destroying the UK construction industry.”

Please let your MP, Mr Cameron, Mr Fallon and Dr Cable know how you feel via the BBC’s web site which is collecting the views of Specialist Contractors.

BBC Radio 5 Live Investigates Late Payment 11am Sunday 13 October 2013. Will You Speak Up?

Adrian Goldberg presents cutting edge investigative journalism, as well as taking on listeners’ campaigns. This Sunday, 13th October 2013 at 11am, the topic for his BBC Radio 5 Live Investigates will be late payment.

I have spoken at length to RobCave who works on the show and have provided him with the interim results from our latest payment survey.

Despite all the suggestions of ‘growth’ and ‘hope for the future’ of the construction industry, the results paint a sorry picture of how late payment is still a large scale threat to our fragile economy!

I have gone so far as to suggest that the current situation is a national disgrace!

Our Platinum Buddy Specialist Contractor Steve Sutherland will be on the show, along with Debbie Abrahams, the MP behind the all party inquiry into late payment that myself and Steve gave evidence to earlier in the year.  It is also likely that they will call me for comment on the day.

As those of you who have already taken part in the survey will know, all answers were given anonymously in order to allow everyone to speak freely (if you haven’t completed it yet you can find it here).

What Rob would like is for anyone who is willing to go on the record and speak up openly about their experiences of late payment within the industry, naming the offenders and their abhorrent practices.

Could you be that person? Are you willing to stand up, speak out and make a difference?

If you feel able to speak to Rob and name names, he can be contacted on 07834 846088 or by email at rob.cave@bbc.co.uk.

You can also show your support on the day by listening to the show and texting in or tweeting @bbc5live and @streetwisesubbi , using the hashtag #buildfair4all on the day.

Can we get our hashtag, #buildfair4all, trending? It would be great to raise national awareness of late payment and let the British public know what is actually happening to their money!

This is a major opportunity to get your voices heard in the battle against payment abuse and I would encourage you to do what you can by circulating this message to everyone you know, and if you are able to contact Rob that would be fantastic.

As always if you have a specific problem please do not hesitate to contact me or check out our various resources at streetwisesubbie.com, streetwisesubbiesilver.co.uk and streetwisesubbiegold.co.uk.

Are you sick of the state of the UK construction industry? Have your say and help us change it all!

Are you sick of the state of the UK construction industry?

Do you feel helpless, frustrated and even angry about the kind of unfair treatment you’re getting from certain main contractors and clients you are working with?

The industry has been bumping along the bottom for the last few years, but it’s decent hard working Specialist Contractors like you that have taken the brunt of it for far too long.

We believe we can help you to change that.

There have been plenty of reports over recent months ranking the largest main contractors in the UK by turnover, or profitability. But none of this knowledge is particularly helpful to you, nor does it paint an accurate picture to the Government and the trade press, or the general public, about the true state of the industry!

We think there should be more meaningful, realistic data being circulated that reflects what is actually going on within the industry, much like the recent Financial Health analysis by The Construction Index. The analysis by way a Google style accounts algorithm revealed that although Balfour Beatty were the largest contractor by turnover, it fell to a worryingly low 77th place when ranked by financial health, and the most profitable UK contractor, Interserve, ranked a surprisingly low 29th place for financial health.

Our last survey 12 months ago had 146 responses and helped pave the way for the #buildfair4all campaign, the StreetwiseSubbie Fair Treatment Charter to get recognised by the media, get us into Parliament, and get the issue of supply chain payment included in the Government’s recent Construction Strategy.

So imagine how far another credible survey result will take the #buildfair4all campaign, and more importantly what that means for you!

We have already had some 62 responses, but we need your help to equal or exceed the 146 responses we got last year. With your response we can build a credible report, which we can use on your behalf to stamp out unfair treatment and late payment within UK construction. But we can’t do it without your help, so please take just 3 minutes of your time now to fill in our 10 question survey!

State of The Industry 10 Quick Question Survey

The more replies we get the more we can get people to sit up and take notice about the sharp practice and unfair treatment meted out by certain Contractors who are stealing from their supply chain and ruining this great industry of ours!

Strong words I know, but we are seeing the tragic results of this corporate greed almost every day, and we are determined to do what we can to highlight the problems you guys are all facing, and do something about them.

But first we need the evidence, and it will take you literally 3 minutes to provide it.

Please take the State of The Industry 10 Quick Question Survey now!

Thank you in anticipation of your support.