SEC Group Scotland
Three-points manifesto for a thriving Built Environment supply chain in Scotland
The Specialist Engineering Contractors’ (SEC) Group Scotland represents the largest sector in the Scottish construction industry by value. It is an umbrella body comprising the UK industry’s premier trade associations:
- British Constructional Steelwork Association
- Electrical Contractors’ Association
- Building & Engineering Services Association
- Lift and Escalator Industry Association
- SELECT (Electrical Contractors’ Association of Scotland)
- Scottish and Northern Ireland Plumbing Employers’ Federation)
A future Government and Parliament should commit to three-points for a world-leading UK specialist engineering supply chain in the built environment:
- Bring legislation to protect all retention monies in a ring-fenced account, as first step towards zero retentions by 2025, and prioritise review of the ‘Construction Act’. From 2021, following the example in Scotland and Northern Ireland, all publicly-funded built environment work over £1 million should be paid using Project Bank Accounts. Payment security will guarantee a sustainable supply chain of SMEs.
- By 2022 all publicity-funded infrastructure and building works should adopt smarter procurement methods as a pre-condition to the availability of funding. Best models of practice in public procurement contracts will drive positive change across the industry.
- Establish a joint government/industry task group with a remit to develop proposals for a statutory licensing scheme for contracting companies. Building on current initiatives, incentivise the industry to aim for greater efficiency and best quality standards that will create a level-playing field for competition.
Professor Rudi Klein, SEC Group’s CEO, said that the challenge for the industry was to become leaner and fitter and government policy can be the catalyst for this change.
He added: “We urge all political parties in Scotland to adopt these points in their business & industry policies as they are essential levers for economic growth and increased productivity.”
Full Manifesto document: AManifestofromSpecialistContractorsBuiltEnvironment-April2017
For SEC Group Scotland 2016 Election Manifesto priorities see here.
- The built environment industry’s annual output is £120 billion representing a 6.5% contribution to GDP (ten times that of the automotive industry). The industry employs over 2.1 million people. Almost 99% of the 270,000 firms in the industry are SMEs.
- In the UK, the devolved governments have been using project bank accounts (PBAs) as a method of ensuring that all project participants are paid simultaneously and in a timely manner – their use is mandatory in Scotland and Northern Ireland. Through using PBAs Highways England, for example, has been able to ensure that firms at the 3rd tier of contracting are paid within 19 days.
- The 200 year old system of cash retentions in the construction industry exists – ostensibly – as security in case a firm does not return to rectify defects. Thousands of SMEs in the industry wait for over 2/3 years to recover their outstanding retentions. In 2015 small firms lost between £40m and £50m worth of retention monies as a result of insolvencies up the supply chain.
- Achieving zero retentions is the target in the Government/Industry co-signed Construction Supply Chain Payment Charter.
- New models that modernise procurement with savings to the public purse are already been trialled. This work is now coordinated by Constructing Excellence with an industry-wide working group.