Scotland's builders in plea for Covid-19 lifeline as cash flow dries up

Construction has been branded Scotland’s “forgotten” industry amid the coronavirus crisis after a new survey revealed that more than three-quarters of businesses have seen all cash flow stop.

Trade body the Scottish Building Federation (SBF) has called on the UK and Scottish governments to offer support similar to that given to other sectors forced to close due to the Covid-19 pandemic.

It comes after a survey of its members revealed that more than three-quarters have seen all cash flow stop, while 95 per cent have furloughed at least 80 per cent of their staff.

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Most construction and building work deemed non-essential has ground to a halt north of the Border as a result of lockdown restrictions.

Most construction and building work deemed non-essential has ground to a halt north of the Border as a result of lockdown restrictions. Picture: Jane Barlow/PA Wire

The SBF argued that while the retail, hospitality and leisure sectors have been designated “heavily-impacted” sectors which benefit from 100 per cent rates relief, and further grant funding, the construction sector has received no specific support.

Construction firms employ more than 170,000 people in Scotland and the sector accounts for as much as 10 per cent of the country’s economic output.

The SBF survey also indicated that just 36 per cent of its members are eligible for the £10,000 grant funding offered through the Small Business Bonus Scheme (SBBS) and Rural Rate Relief (RRR).

The trade body said that unlike the retail sector, the construction industry could not adopt alternative measures of getting its product to market, meaning that it has no other means to generate revenue and bring cash into businesses while sites remain shut.

It also noted where cash flow would return to the retail sector rapidly as soon as customers buy products or services, cash would not start to flow into construction businesses immediately after the sites reopened. The SBF warned that cash would only begin to flow into businesses around two months following a return to work.

Vaughan Hart, managing director of the SBF, said: “Most of our members are Scottish-based SMEs and have heeded the Scottish Government’s advice to stop working to protect both their staff and the wider community.

“We welcome the Scottish Government’s second phase of funding which includes a fund of £100 million to support businesses in financial distress due to Covid-19.

“Other heavily-impacted sectors which were initially advised to close have rightly received significant support and other industries have now received bespoke support packages from the Scottish Government. Construction seems to have been forgotten despite being one of the most crucial sectors to the Scottish economy.

“Our sector employs over 170,000 people and is 10 per cent of the Scottish economy but many of our members are struggling. They urgently need specific support from government if they are to survive the current crisis.”

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