Government financial support schemes failing construction – CECA

The Civil Engineering Contractors Association (CECA) has warned the goverment that three of its schemes designed to boost financial support to businesses are not working for construction SMEs.

The warning came as part of a package of recommendations the association has made in its Budget submission to the government to try improve civils SMEs’ cashflow.

The goverment set up the the Enterprise Finance Guarantee Scheme, the Working Capital Guarantee and the Capital Enterprise Fund to try and keep cash flowing into recession-hit businesses.

But in a letter to the Treasury, CECA highlighted concerns from its members that financial institutions currently seem to have little confidence in the construction industry and have been unwilling to extend financial support.

Contractors have also found the three schemes confusing and have reported a similar lack of understanding at bank branches where they have asked for support in line with Government advice.

In its submission it also called for:

• A suspension of deduction of retentions on all public sector construction contracts;
• More work to be let discretely outside of long-term framework packages, to help boost the workload of SMEs to find work;
• Exploration of a credit insurance scheme which would see government share a proportion of the risk with construction businesses.