Leading Construction Body Comments on the latest news on Interserve

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Leading Construction Body Comments on the latest news on Interserve

The Specialist Engineering Contractors’ (SEC) Group represents the largest sector in UK construction (by value). The specialist engineering sector mainly comprises SMEs  operating as sub-contractors in construction supply chains.

Professor Rudi Klein, CEO of SEC Group commented on the latest news on Interserve:

At present the outcome of any pre-pack administration insofar as Interserve’s supply chain is concerned remains unclear. But, yet again, the financial models adopted by these large outsourcers pose an ever-present and potentially very damaging risk to their supply chains. Following Carillion’s collapse, it was generally assumed that there would be a radical re-appraisal of the public sector’s approach to construction/infrastructure procurement. This hasn’t happened. Again, we urge the Government to: 

  1. Abandon the policy of letting high value contracts to outsourcers and, instead, break down  contracts into smaller lots to facilitate greater SME participation in the procurement process.
  2. Insist on the use of new model procurement options that foster greater teamworking amongst all those involved in the delivery of construction /infrastructure works.
  3. Insist on greater payment security for construction supply chains including the use of project bank accounts (ring-fenced bank accounts through which sub-contractors are paid) and/ or direct payment from public sector clients to subcontractors; if used, cash retentions should also be protected.

Notes for Editors

  1. SEC Group is an umbrella body representing the largest sector in UK construction (by value). The specialist engineering sector comprises mainly SMEs.  SEC Group members are: British Constructional Steelwork Association, Building Engineering Services Association, ECA -Electrotechnical and engineering services trade body, Lift and Escalator Industry Association, SELECT (Electrical Contractors Association of Scotland), SNIPEF (Scottish and Northern Ireland Plumbing Employers’ Federation) and Scaffolding Association.
  2. Project bank accounts provide a secure “pot” out of which all construction project participants receive their payments; the monies do not have to pass through the hierarchical layers of sub-contracting.
  3. Peter Aldous MP have put forward the Construction (Retention Deposit Schemes) Bill which asks for cash retentions in the supply chain to be protected.
  4. For further information please contact Maria Balermpa, SEC Group Operations and Public Affairs Manager on 07508 559 231 (Email: contact@secgroup.org.uk)