Guest post from Barry Ashmore, managing director of StreetwiseSubbie.com.
Trade Associations, are by definition “organisations that represent the interests of the member firms of an industry”.
But when I look at what some of the trade associations in the UK construction industry are doing, or rather not doing, I begin to question the extent to which they are matching up to this definition.
Take for example this quote from one of their leading lights;
“Subbies are up in arms over [late payment] and are calling for the government to act. The public sector has an opportunity to play a very important role in making sure fair payment performance goes right the way down the line. This surely is an area where the industry has to perform well.”
What’s wrong with that I hear you say? What’s wrong with it, is that it’s a quote from August 2002. That’s right 12 long years ago.
The report went on to quote them as saying “The cash flow problems caused by slow payment and retentions make it harder for specialists to fund the improvements the government and industry want to see. It also leaves them at greater financial risk of upstream insolvencies.”
Sadly, thousands of firms (and trade association members), have gone to the wall in those 12 years.
For all the talk, the payment situation is even worse now than it was then.
As Albert Einstein said “Insanity is doing the same thing over and over again and expecting different results.”
We need a new and radically different approach!
The ‘Construction Supply Chain Fair Payment Charter’ launched in April this year, sets out an aim to reduce standard payment terms in construction to 30 days by 2018. “It’s a work in progress” says Suzannah Nichol of the NSCC.
Sorry for being cynical, but if the last 12 years are anything to go by “work in progress” is the last thing Specialist Contractors want to hear. And I’m not the only one who feels short changed by the Charter, judging by the responses in our recent survey of 216 Specialist Contractors;
“Worthless piece of paper that all the major main contractor payment abusers have ignored.”
“…in reality hardly ever works the way it’s intended to.”
“Supply chains are rarely monitored and clients that may question it are normally fobbed off with meaningless guarantees from main contractors.”
Indeed other industry bodies have also been critical of the Charter;
“Only a supreme, and poorly informed, optimist would take the view that the Charter is the panacea of all payment ills within the industry. It is not.”