Coronavirus business support - Two important letters

Just before Easter, two open letters were published that have important messages for our industry, our supply chain and our customers.

The first was a letter by the Construction Leadership Council (CLC) setting out its position on payments and contracts during this period of disruption.

Its message to the industry was that all construction businesses should continue to pay in accordance with agreed contractual terms. Similarly, firms should not be threatening to invoke penalty or other contractual clauses, when it should be the priority of all clients and firms to sustain the industry.

"Our actions at this time will be remembered.  All firms should think hard about how their reputation could be damaged by not doing the right thing," it stated.

Citing the example of the instruction from the Cabinet Office to public sector clients to keep public sector payments and contracts running as normal, the letter says:

"In our letter to the Prime Minister, we highlighted the importance of maintaining cashflow to ensure the financial health of our industry. This applies to all businesses in the sector, including those in the materials and products distribution supply chain. As a result, every business, large and small, has a critical role in the making sure that cash continues to flow throughout the industry. However, our Construction Industry Task Force colleagues have brought to our attention that there are number of businesses that have chosen to unilaterally delay payment or extend credit terms. We do not believe this is acceptable or appropriate – particularly at this time of great stress...

"Our common enemy is Covid19, and we need to unite, and work collaboratively to resolve shared problems. We owe it to our sector and the country to take all steps necessary to ensure that the industry is in good health to support the recovery, when it comes. It is everyone’s responsibility to keep money moving in the sector and vital that all businesses play their part by maintaining payment and by managing contracts responsibly."

Read the full CLC letter on payments and contracts here.

A thank you to the manufacturing sector

Another key communication last week came in the form of a letter from the business minister Alok Sharma MP to all those working in British manufacturing and industry.

In the letter the Minister paid tribute to those working to keep the economy going, and restated current guidance: "Manufacturing is a critical part of our economy and I would like to be clear that there is no restriction on manufacturing continuing under the current rules. Guidelines from Public Health England provide best practice advice on how this can be done safely."

He also restated the Government's support package for business and determination to support manufacturing sectors:

"As you know, the Chancellor has announced a far-reaching package to support businesses including government-backed and guaranteed loans, making available an initial £330bn of guarantees during the COVID-19 pandemic, as well as the Coronavirus Job Retention and VAT deferral schemes. I have also recently announced changes to insolvency rules, to help UK businesses which need financial rescue or restructuring to keep trading, and want to reassure you that we are working round the clock to protect our people and businesses."

You can find out more about these support schemes on the Government's Business Support website.