No date for furlough payments places Scottish construction in turmoil

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A leading Scottish construction firm has warned ‘extreme pressure’ is being placed on the industry due to the lack of detail for the UK Coronavirus Job Retention Scheme.

Advance Construction Scotland, which employs more than 1,600 staff, said that the failure to publish a timescale for furlough payments had left many companies fearing for future.

Seamus Shields, who established the family owned company 25 years ago, called on the UK and Scottish Governments to look at an emergency funding package similar to that announced for the hospitality and tourism sectors.

Mr Shields said: “This is an unprecedented situation and despite the many high and lows of the construction over past decades, as with many other industries it is difficult to draw any sort of comparison to what we are dealing with now.

Image: Advance Construction Scotland

“Our company is working across more than 200 live construction sites and has a payroll stretching to seven figures per week. We also have 500 sub-contractors and over 2000 companies on our supply chain who all depend on us. Nearly all work has ceased instantly.

“The job retention scheme was welcome news at first but the lack of detail is staggering. The claims system will apparently be open by the end of April but no one can tell us when payments will be made after a claim is entered. In the meantime, banks are providing little clarity to the sector on how we can maintain cash flow to ensure staff wages and contracts can be paid. People’s rents, mortgages, food and utility bills – all of these payments rely on the sector urgently being given the certainty it needs.

“We need that clarity now.

“All of us recognise the demands on government but extreme pressure is being placed on the industry and my fear is that if some companies collapse then others in the chain will soon follow. Any decision we take to furlough staff has to be made with the knowledge of how claims will be handled by government and precisely when the payments will arrive.”

Advance added that the situation had been made more complicated by the differing approach between the UK and Scottish Governments regarding continuation of construction.

Seamus added: “The Scottish Government has told the sector to cease activity in line with social distancing guidance. We are supportive of their direction as stopping the spread of COVID-19 and helping our brilliant NHS is the fundamental priority.

“South of the border, however, many construction sites are still operating. That is creating issues in the industry and raises questions about why some companies will need financial support and others will not.

“An emergency funding package should be made available to bridge the gap and keep companies paying wages before any furlough payments are eventually released. This would encourage the sector to cease all activity and also ensure the industry was ready to quickly get going again once Scotland and the UK is back on its feet.”

 
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