Chancellor Urged Offer More Support Small Subcontractors Missing Out National Infrastructure Pr

According to new Bibby Financial Services research, small businesses are missing out on national infrastructure contacts, with 78 percent of UK subcontractors not benefiting (BFS).

According to the company’s latest Subcontracting Growth report, fiscal stimulus through large-scale infrastructure projects has a direct multiplier effect on smaller construction firms across the country.

“Despite the sound of claxons from the government every time a large scale infrastructure project is announced, it is clear that any benefits to the construction industry are swallowed up by the large and the few,” said Helen Wheeler, managing director of construction finance at BFS.

“Our research indicates that there are few signs of contracts and work trickling down to smaller businesses for these multibillion-pound projects.” In recent years, we’ve seen the Northern Powerhouse take shape, as well as the approval of Hinkley Point and Heathrow’s third runway. What is lacking, however, is evidence that these projects are bringing trade and jobs to a broader range of businesses across the construction industry.”

When asked about opportunities to secure more work, more than two-fifths of subcontractors (45%) said commercial contracts were the most beneficial, while a quarter (24%) mentioned housebuilding. Only 4% of subcontractors saw national infrastructure projects as an opportunity to secure more work.

“Small subcontractors are looking to the commercial and residential sectors for work,” said Peter Vinden, managing director of construction specialists The Vinden Partnership. “However, we must make the process of tendering and winning contracts for national infrastructure projects simpler and fairer.” Large-scale projects like the Midlands Engine and Hinkley Point will not be able to stimulate supply chains as effectively if this is not done.”

The government announced its National Infrastructure Delivery Plan in March 2016, which compiled all national infrastructure plans. Improvements to the procurement process for national infrastructure projects were a key component of the plan, with a focus on levelling the playing field for both national and regional subcontractors.

According to the Subcontracting Growth report, nearly a third of firms (31 percent) want assistance in tendering for national contracts, trailing only those who want assistance with employment law and legislation.

“The new Chancellor has set the Government’s economic course by abandoning his predecessor’s deficit target in favour of a focus on fiscal stimulus, such as spending on housing and transportation,” Wheeler added. “While such fiscal measures are welcome, our research indicates that not all businesses in the construction supply chain will benefit.” Subcontractors are pleading for help, and the Government should heed this warning and take action to address this issue ahead of the Autumn Statement.”

In terms of the current pipeline of construction projects and their potential benefit to the industry, more than half (52 percent) of subcontractors believed that local authority contracts offered the greatest benefit. Almost a quarter (23 percent) believe the Northern Powerhouse will benefit the sector. Hinkley Point, HS2, and South East airport expansion (all 21 percent) were also singled out as important projects.

Last Updated on December 29, 2021


Author: Indra Gupta

Indra is an in-house writer with a love of Newcastle United and all things sustainable.

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