Construction News

Sun May 31 2020

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Rishi’s rescue package may be too late to save builders

2 Apr When chancellor Rishi Sunak announced his coronavirus job retention scheme, employers across the country breathed a sigh of relief. Now they are holding their breath trying to survive long enough for the aid to arrive.

Chancellor of the exchequer Rishi Sunak during a recent daily briefing broadcast
Chancellor of the exchequer Rishi Sunak during a recent daily briefing broadcast

The coronavirus job retention scheme (CJRS), announced by Rishi Sunak on 20th March, will enable employers to use an online portal to claim for 80% of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on that wage. It has the potential to save many businesses unable to trade during the lockdown – or so it was thought.

But now the National Federation of Builders (NFB) is warning that many of its members are likely to run out of money before the Treasury gets it act together to get the scheme started.

The Treasury had previously pledged that the portal would open the week beginning 30th March 2020. However, the portal is still not operational and is now not scheduled to be so until the end of April, with no date as to when payments will be made.

Richard Beresford, chief executive of the NFB, said: “The government must speed up the opening of the CJRS otherwise those in the construction industry who have had to shut down and furlough staff will face a cash-flow crisis that will lead to closures. At the very least we must have clarity as to when the scheme will become operational and make payments”

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The government’s position is that construction sites can remain open but the NFB is calling on members “to take a values-led, risk-managed approach” in continuing to operate sites.

Richard Beresford said: “Construction sites remaining open should have the support of the client, and where a site or contractor wishes to suspend construction, the client should support closure and remobilisation costs. No contracting business wants to suspend activity but the safety of staff and their families is paramount.”

He added: “Where sites wish or need to remain open and operational, they must operate in a safe manner by following Public Health England (PHE) guidance, the Site Operating Procedures (SOP) and ensure the use of personal protective equipment (PPE).”

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