黑洞社区

Construction firms treat each other with 鈥渃ontempt and discourtesy鈥� over payments the deputy-chair into a review of construction procurement in Scotland has said.

Speaking to 黑洞社区, Ken Lewandowski, deputy chair of the Scottish government review into procurement in construction, said the industry had one of the worst payment environments he had seen.

Lewandowski, who has held senior positions in firms from across UK industry, including manufacturing and construction, and was most recently chair of Clydesdale Bank, said: 鈥淚 have never ever seen an industry where people treat each other with such contempt and discourtesy.鈥�

He raged against company bosses that 鈥渦se their sub contractors as an overdraft鈥� and said they should 鈥渞un their business as though they are capable businessmen鈥�.

Lewandowski said he did not support the UK government鈥檚 introduction of supply chain finance where sub-contractors are able to get paid from the bank quicker than their usual payment terms in exchange for a fee.

Carillion鈥檚 version of the scheme, which it rolled-out earlier this year, caused angry reactions from sub-contractor bodies because the contractor also extended firm鈥檚 payment terms to 20 days under the system. Although Carillion pledged that no firm would be worse off.

Lewandowski said: 鈥淲hy should a sub-contractor have to borrow his own money effectively to be paid on time? At the end of the day the main contractor ought to pay their bills on time.鈥�

He said he wanted to see legislation introduced to make it illegal to fail to pay invoices within 30 days.

鈥淚t costs the government nothing it鈥檚 something that would regenerate the economy people would then have to pay because it鈥檚 the law,鈥� he said.

When asked if he was concerned that might damage the businesses of main contractors which rely on controlling cash flows to make profit margins he added: 鈥淨uite frankly they are running their businesses wrongly. They must be inefficient.

鈥淭hey cannot build into their budget that they need someone else鈥檚 money to run their business. That鈥檚 what other businesses have to do.鈥�

Lewandowski鈥檚 comments followed a seminar on the Scottish government鈥檚 trial of project bank accounts, announced in April, as a means of improving payment practices hosted by the Special Engineering Contractors Group Scotland.