The Specialist Engineering Contractors’ (SEC) Group submitted their response to the Government’s Green Paper on the industrial strategy in April 2017.
Our response concentrates on actions that can create and maintain a healthy supply chain, ensuring the growth of firms in the specialist engineering sector and facilitating a fertile environment for innovation, support for skills development and increased productivity.
We believe that the UK specialist engineering sector could be a world-leading one – and this is the vision that SEC Group and its member associations aspire to achieve.
But first we need to address the industrial strategy ‘pillars’ for supporting business to start and grow, upgrading infrastructure, improving procurement, driving growth across the whole country and cultivating world-leading sectors.
- Government should pay special attention to improving procurement and upgrading infrastructure. We are encouraged that Pillar 5 aims to “use strategic government procurement to drive innovation and enable the development of UK supply chains.”
- Creating healthy and sustainable supply chains that can consistently deliver best value is key to improving productivity and generating
- We hope that Government will support further trialling of innovative procurement options such as the Integrated Project Insurance (IPI) as the savings (for the public purse) are significant, it can attract private sector investment and helps grow a local healthy SME supply chain. We suggest that innovative procurement models could be adopted under flagship Government infrastructure projects.
- The major barrier for SMEs in our sector (especially the sub-contractors in the supply chain) is the lack of payment security. Government should drive compliance with the 30-days payment rule.
- Furthermore project bank accounts (PBAs) should be made mandatory on all public sector projects.
- We need to end the out-dated practice of cash retentions – first step towards it: ring-fence them to protect contractor SMEs from upstream insolvencies.
- There must be a greater drive to ensure that the pre-qualification process is fully standardised up and down the supply chain and pre-qualification data is available through accessible platforms; the Safety Schemes in Procurement initiative (SSIP – supported by HSE) is a very good model.
- A sector deal for construction should promote a level playing field for competition through a process of “badging” or accrediting firms as having the required levels of technical capability and expertise and rewarding companies that invest in their skills and their business. We should promote the use of quality accredited firms.
- We would welcome further clarity on the Industrial Strategy’s approach to evaluation and data collection. This is important to ensure whether initiatives are successful or not, or whether they need revising.
We would like therefore to work with Government on prioritising solutions that could minimise risks and help unlock the potential of firms in the sector. In fact, solutions exist; the challenge is to put in place an effective implementation plan. You can read our full response here.