Specialists fight back against late payments and retentions
When times get tough it is those furthest down the food chain who suffer most, which is why it is taking longer for specialist sub-contractors to get paid and more of the money they are owed is being withheld.
The posts at Barry Ashmore’s Streetwise Subbie LinkedIn group and on his Streetwise Subbie website and Twitter feed show how fed up specialists in all areas of construction are becoming at the way they are being abused by the larger contractors they work for.
One glazing specialist, Dortech, made headlines in the Telegraph and Building before Christmas when it decided to stop working for Balfour Beatty, even though £5million (40%) of its turnover came from the main contractor.
One contributor to Barry’s Streetwise Subbie group on LinkedIn says it has also started taking a stronger stance on debt. “From our own point of view we were always hesitant about confronting our main contractors (big nationals) about payment issues because we felt we had established a positive working relationship with them over the years and that if we rocked the boat (sure we're not alone on that one) then they had the power to strike us off their ‘preferred supplier’ lists and even blacklist us with other main contractors.
“Then we decided what the hell, we have the right to our money and [are] taking a stronger stance (eg interest added, passing to collection agency). We've been reasonably successful with our strategy and we'll just have to take the consequences if they choose not to work with us… but no point working for nothing!”
Meanwhile, companies seem to have begun to take notice of the Prompt Payment Code following Business Minister Michael Fallon’s announcement in November that companies that do not sign up will be named and shamed. Aggreko, Morrisons and Sainsbury’s are said to be looking at ways they can adopt the Code.