SMES must talk to ease stress
Small and medium-sized enterprises are firmly in the firing line during this coronavirus pandemic and nearly a fifth operate in the construction industry.
The UK government’s furlough scheme, where employers can apply for 80 per cent of an employee’s salary up to £2,500, has been a real lifeline for some. Other measures, such as rates relief, are not quite as accessible. Unlike Germany or Switzerland, which have adopted a more pragmatic approach to helping companies, the UK continues to be bogged down in unnecessary bureaucracy.
Ashwood Scotland was recently refused its application for grant support by its local authority. This was despite meeting the requisite criteria and having closed all our sites, leaving us unable to generate any income. The outcome was even more galling when I consider how ingrained we are in the West Lothian economy, with 76 staff and having supported jobs in the area for more than two decades. There will be many others in a similar position.
Construction firms are suffering a cash crisis and already we’ve seen Glasgow’s Central Building Contractors go into administration. It further highlights the need to accelerate the government’s coronavirus business interruption loan scheme (CBILS).
A recent survey by the Association of Practising Accountants has found that more than half of the owner-managed businesses it contacted will run out of cash in 12 weeks. Will financial support reach these companies before it’s too late? Allowing frontline bank managers more flexibility in implementing CBILS would help.
It’s not just the state of balance sheets where building firms should be concerned, but also the psychological toll lockdown will be having. In an industry where more than one worker a day on average takes their own life, three times higher than the national average according to the Office for National Statistics, it is a deeply worrying time. I fear this shameful figure will increase as the danger to trades personnel will be fears over where their next wage will come from.
Ashwood adopted a policy a few years ago of directly employing our staff on proper contracts, providing them with security. We believe the rewards have been reciprocal but, sadly, 50 per cent of construction workers are self-employed and were already subject to the vagaries of short-term, insecure project work even before the current crisis.
I am fortunate because I have a team of talented directors and professional advisers to talk through matters. However, not all owners are in the same position, with many suffering in silence. I would urge people to speak to their peer group or business mentor. It may not solve the problem but talking is an important release valve during these times of social isolation. As the government keeps on reminding us, we’re all in this together. •Archie Meikle, MD, Ashwood Scotland