CONSTRUCTION CORONAVIRUS LOCKDOWN REBELLION
April 16, 2020 | 4years | News
As the UK Coronavirus lockdown continues the mixed messages that are being reported are continuing to cause confusion within the construction sector. The different approaches adopted vary not only from site to site, but more concerningly the approach between the UK and the Scottish Governments’ differ significantly, ultimately creating a North-South divide.
Questions are starting to now be asked whether business rescue packages promised almost four weeks ago are specifically designed to omit small and medium sized construction organisations from being eligible to access much needed lifesaving cash. Desperate businesses are reporting a constant stream of rejections from mainstream banking based on the failure to meet strict lending conditions that the Chancellor did not state as a prerequisite to obtain financial support.
In an industry plagued with poor cashflow, extended payment terms and low margins it is hard to conceive that any civil servant designing a support package would not have the knowledge to know that this industry even in a normal a year would not meet COVID 19 Business Loan Interruption Scheme criteria, let alone one which is overwhelmed with a global pandemic.
Today we are hearing first-hand accounts from Santander, Bank of Scotland and an Independent Financial broker that the basic criteria set out by the Government is leaving banks no alternative but to reject claims from organisations that operate normally within the construction business environment. These rejections are creating an emotional reaction which businesses heap blame and criticism on the banking sector rather than the Scheme design.
With a growing backdrop of increased desperation, the industry response is one that has limited options, torn between relinquishing their business to support the plea to stay at home to protect the NHS or rebel.
By this sector rebelling against the lockdown the impact to wider society could significantly affect the fight against controlling the spread of the virus. However, disruption that completely removes the livelihood and long-term viability of many small and medium businesses, as a result of a poorly managed and executed plan may just be a step too far for many construction companies.
So where do we go from here. Well any responsible Government must give clear guidance to the banks and reduce the eligibility criteria for this sector. By adopting a one-size fits all approach to support packages will have a devastating effect on the construction sector and must be addressed immediately. Support packages must be flexible to allow banks the ability to tailor financial support specifically to meet the needs based on normal operating parameters within each sector of the economy. This will then allow business who should be praised for being able to operate with turbulent market norms the lifeline to keep doing what they do best and build Britain out of troubled times when this lockdown has ended.
Dr Alex Reid
Apsis Founder and CEO
Questions are starting to now be asked whether business rescue packages promised almost four weeks ago are specifically designed to omit small and medium sized construction organisations from being eligible to access much needed lifesaving cash. Desperate businesses are reporting a constant stream of rejections from mainstream banking based on the failure to meet strict lending conditions that the Chancellor did not state as a prerequisite to obtain financial support.
In an industry plagued with poor cashflow, extended payment terms and low margins it is hard to conceive that any civil servant designing a support package would not have the knowledge to know that this industry even in a normal a year would not meet COVID 19 Business Loan Interruption Scheme criteria, let alone one which is overwhelmed with a global pandemic.
Today we are hearing first-hand accounts from Santander, Bank of Scotland and an Independent Financial broker that the basic criteria set out by the Government is leaving banks no alternative but to reject claims from organisations that operate normally within the construction business environment. These rejections are creating an emotional reaction which businesses heap blame and criticism on the banking sector rather than the Scheme design.
With a growing backdrop of increased desperation, the industry response is one that has limited options, torn between relinquishing their business to support the plea to stay at home to protect the NHS or rebel.
By this sector rebelling against the lockdown the impact to wider society could significantly affect the fight against controlling the spread of the virus. However, disruption that completely removes the livelihood and long-term viability of many small and medium businesses, as a result of a poorly managed and executed plan may just be a step too far for many construction companies.
So where do we go from here. Well any responsible Government must give clear guidance to the banks and reduce the eligibility criteria for this sector. By adopting a one-size fits all approach to support packages will have a devastating effect on the construction sector and must be addressed immediately. Support packages must be flexible to allow banks the ability to tailor financial support specifically to meet the needs based on normal operating parameters within each sector of the economy. This will then allow business who should be praised for being able to operate with turbulent market norms the lifeline to keep doing what they do best and build Britain out of troubled times when this lockdown has ended.
Dr Alex Reid
Apsis Founder and CEO
