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SME payment times improved due to pandemic

Shorter payment times for SMEs, greater collaboration and empathy, better hygiene, and prioritising mental health, are just some of the beneficial changes that have emerged from the pandemic.

The Chartered Institute of Building (CIOB) has highlighted some of the positive new ways of doing things within construction in a new report, Covid-19 and Construction: Learning lessons to strengthen the construction industry.

It argued these lessons should be taken forward to strengthen the industry and that this is “good news” for end uses who can benefit from projects potentially being completed more quickly and efficiently.

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CIOB policy and public affairs officer Daisie Rees-Evans said: “Covid-19 had a monumental impact on people’s lives and livelihoods with businesses needing to adapt how they operate to keep their workers safe while staying financially afloat.

“Since the outbreak of the virus in the UK, we have seen a shift in business practices with construction seeing large improvements in supply-chain collaboration, access to hygiene facilities and provision for worker wellbeing.

The CIOB report says the quick nine-day build of the Nightingale Hospitals, for Covid patients, showed better flexible working, collaboration and communication.

CIOB also found of the 1,400 construction SMEs it spoke to, more than half reported improved hygiene facilities and mental health support, with some of these temporary measures continuing post-pandemic.

Some 52% of SMEs told the CIOB payment times had improved, with more than half saying payment was settled within 40 days or less.

CIOB says this is encouraging but more work was needed to get all payments made within 30 days, which is a “priority” for SMEs, and that the Government’s voluntary Prompt Payment Code with just 3,500 signatories needed revisiting.

Rees-Evans added: “Our report reflects on the progress that’s already been made and what further opportunities can be harnessed to deliver change that positively impacts construction businesses, workers and the communities they build for.

"With the UK Government committing to procuring for social value, the publication of our report is timely in its approach to seek true cultural change.”

Commercial director Paul Singh, at project and programme management consultancy EEDN, said: “The pandemic has definitely increased collaboration and empathy within the industry from clients to consultants and contractors, opening up dialogue and reducing the adversarial approach.

“Construction has really taken note of the need to prioritise mental health and wellbeing. Projects are now defined with a new, hybrid way of working in mind and spaces have wellbeing built right into them.

“We have also seen greater proactivity when it comes to invoicing and payments, with invoices often being settled before the payment period is up. There is undoubtedly still a lot of work to be done but the signs are certainly encouraging.”