A helping hand
Cashflow concerns are a major issue for our industry, but don’t let your mental health suffer. Support is available right now
A SELECT Member recently asked me about my work as a consultant and specifically how I deal with the continual stream of payment and cashflow issues.
Well, for a start it’s my job and is what I’m trained to do, backed up by more years of experience than I care to think about!
But above all, I’m a great believer in trying to get matters resolved without recourse to adjudication and in the past few months I’ve been encouraged by the increasing willingness of parties to use third-party involvement to work out a compromise.
However, before Christmas, I was disappointed to encounter a real build-up of payment issues – or more accurately non-payment issues – and regrettably I feel this situation is only going to get worse. The level of insolvencies in England and Wales is absolutely shocking and one incredibly sad and worrying side effect of payment issues is the impact it can have on mental health.
If you’re currently going through money worries, it’s important to know that help IS out there – try the brilliant people at www.electricalcharity.org for a start.
A whole wealth of support is also available in the resource from the CICV called Where to find a helping hand.
You can download the advice guide now for free at www.cicvforum.co.uk/downloads and you’ll soon realise
that you’re not alone.
A fresh look at retentions
Everyone is aware of our failure as an industry to get to grips with the issue of retentions. However, there now seems to be a clear determination to find a solution – or at least some compromise.
The Scottish Government has released Policy Note CPN 3/2022 as part of the Client Guide to Construction Projects, which is an attempt to get the public sector to take a more pragmatic approach to retentions, e.g. by looking at amounts and periods of time.
Take a look at Chapter 17 at bit.ly/gov-book and you’ll see the steps being taken to ease the retention burden, which you should discuss with public sector clients. One of the guide’s good suggestions is that it’s unfair to hold on to retentions for the early packages on a major project, like groundworks or steelwork, when completion might be 24 months after these packages are completed on site.
Despite this encouraging move, do I think any local authority in Scotland will have the motivation to drop retention completely? Unfortunately my answer is still no.
A guide to good management
Thank you to all Members who took part in the recent CICV cashflow and payments survey, which will help us work with the Scottish Government to look at ways to deal with these issues.
The next big task is developing a Best Practice Guide for construction organisations. A number of experienced colleagues have helped put it together and we hope it will be published by the time you read this. The guide is aimed at improving the commercial management of your projects, and I’m convinced that a number of issues that result in construction and payment disputes can be resolved.
Watch this space!
I make no apologies for hammering this home but PLEASE ensure you have a payment schedule in your contract for EVERY project in 2023. This is the agreement with an employer or contractor for when you put in your application, the due date, the final date for payment and the date when a payless notice has to be issued. It’s not rocket science – just common sense!