Level playing field needed for SMEs, says FMB

Following the publication of the Government’s consultation response to the ‘Creating a responsible payment culture’ call for evidence, the Federation of Master Builders (FMB) calls on the public sector to lead by example in order to tackle the scourge of late payments.

Brian Berry, Chief Executive of the Federation of Master Builders, said: “The Government’s acceptance there is a serious imbalance of power between small and large companies when it comes to securing fair payment terms is a step in the right direction. FMB members are telling me that more than three-quarters of their payments are late, which is clearly unacceptable.

“What is needed is a culture change in the construction industry so that late payment is no longer standard practice. Fundamentally, to rebalance market power for small to medium-sized companies (SMEs), the public sector should lead by example by breaking up contracts into smaller ‘lots’ and desist from the wholesale ‘bundling’ of contracts. This will help SMEs to act as the principle contractor.

“By introducing more competition into public sector procurement in this way, payment terms will improve as the balance of power is restored. What is encouraging is that the consultation responses echo what we already know from FMB members, that the Small Business Commissioner isn’t being marketed enough. The FMB would be willing to work with the Government to help raise the Commissioner’s profile amongst construction SMEs.”

The Federation of Master Builders (FMB) is the largest trade association in the UK construction industry representing thousands of firms in England, Scotland, Wales and Northern Ireland. Established in 1941 to protect the interests of small and medium-sized (SME) construction firms, the FMB is independent and non-profit making, lobbying for members’ interests at both the national and local level.