One in five companies trading without credit insurance

Suppliers to the construction industry are finding credit insurance so difficult to obtain that some are forced to trade without cover or stop supplying customers completely.

According to a survey carried out by the Construction Products Association the government's credit insurance 'top-up' scheme has had little effect, with one third of the companies surveyed having closed or reduced accounts.

Out of the 100 companies from across the industry that participated in the survey, just one had taken advantage of the government's credit insurance 'top-up' scheme over the last three months and they had found it expensive with limited cover.

Almost all of the firms had seen credit insurance totally withdrawn from at least some of the companies they supply. Where it had been maintained the average reduction in cover was more than 30%.

Construction Products Association chief executive Michael Ankers said: "Along with other representative bodies, we fought hard to persuade government to introduce a top-up scheme, but it is clear that by the time this was announced in the April Budget, much of the damage had already been done.

"It is clear from this survey that the scope of the scheme and its cost has made it unattractive to all but very few companies in the construction products industry.

"Looking forward, we are particularly concerned that the absence of an adequate system of trade credit insurance will not only slow down the recovery of the industry – companies being reluctant to supply their products without appropriate credit insurance, but also delay the much needed boost to the economy that construction brings.’