Construction industry must rally to support of Carillion sub-contractors

A Birmingham construction firm has called on the sector to rally around exposed subcontractors and consider paying up early to keep them in business in the wake of Carillion’s collapse.

Colmore Tang Construction (CTC) said it was vital for subcontractors to receive support as this was vital for the overall wellbeing of the construction industry.

Such support would help vulnerable firms avoid the risk of additional problems at what was already, a very difficult time for them, it added.

The firm said companies had a vested interest in ensuring skilled workers remained accessible to the industry.

“No one can afford for skilled and talented subcontractors to go bust because of Carillion. The whole industry needs their skills and there are still jobs to be done and projects to be finished,” said CTC CEO Andy Robinson.

“Subcontractors are understandably worried about their businesses, the experienced tradespeople they employ, and about what lies ahead. We think the industry should do what it can to offer a sense of stability, and where it can, practical support.

“Subcontractors are the least protected, yet they are the people who employ most apprentices and collectively deliver the most training throughout the industry – we can’t afford for the Carillon crisis to add to the problem with the skills gap, so it is up to contractors to offer reassurance.”

CTC, which was established in 2013 and has grown rapidly into a company with an £80m turnover, said paying subcontractors on time was key to building successful partnerships in the industry.

“When we started out we were adamant we would always offer our supply chain attractive payment terms and guarantee they would be paid on time,” added Mr Robinson.

“We have always promised to pay our subcontractors within 30 days of receiving an appropriate invoice.”

Now, at a time when subcontractors may be facing financial difficulty in the wake of Carillion’s downfall, CTC hopes more contractors will follow in its footsteps.

“Unfortunately, in our industry late payments are not uncommon, but now more than ever subcontractors will be relying on us as contractors to keep the cash flowing,” he added.

“We understand that Carillion’s collapse will result in a period of disruption and we are prepared to have conversations with any of our subcontractors who might be struggling and perhaps need to be paid earlier than our 30-day agreement.

“The projects that Carillion had committed to still need to be built and there’s no denying that the construction sector is booming. It’s therefore up to us to make sure subcontractors are still in work and that there are as few job losses as possible – if any.”