CECA calls on government to help SMEs

The Civil Engineering Contractors Association (CECA) is urging the government to help relieve the pressure on small construction firms' cash flow.

Chancellor Alistair Darling and Business Secretary Lord Mandelson are today meeting with banks in a bid to persuade them to maintain lending levels to small businesses at 2007 levels.

CECA warned it was vital that the government secured a deal that had a positive impact on contractors, who are suffering from falling workloads and a squeeze on their credit facilities.

CECA director Rosemary Beales said: "With workload falling in nearly every sector, especially housing, the impact is being felt disproportionately by SMEs who may struggle to diversify. With their credit facilities being squeezed by banks, the inevitable result will be redundancies and small contracting firms going under.

"The Government has spent £37bn of taxpayers' money bailing out banks who are failing to keep their part of the bargain by not lending at 2007 levels. If the cost of this is the loss of some of the most enterprising small firms in the country, with the knock-on losses in employment and skills and the future cost of construction with the absence of a vibrant SME market, then the cost to the taxpayer will be far greater than the initial bailout."