According to the Electrical Contractors Association (ECA) the recent government failed to tackle the main reasons for low investment and productivity in construction skills – Fair and prompt payment.
A government consultation on skills in the construction industry (Held in February 2016) concluded with the ECA stating that the review “Unfortunately fails to tackle the main reason for low investment and productivity, which is fair and prompt payment”.
The government has been very vocal in urging the construction industry to address the skills gap and other constraints that are limiting house building and infrastructure development. We have seen pressure on UK skills grow over the last couple of years, holding up construction projects and having a negative effect on growth.
The Electrical Contractors Association director of Business, Paul Reeve said:
“It’s widely known that engineering is inherently innovative, but while there are innovation hotspots in the wider construction industry, it is hardly endemic.
This is mainly due to the prevailing industry approach to payment, which works against investment. This problem affects building services engineering, and many of the other sectors it works with.
“Skilled staff is definitely one way to achieve better productivity and innovation, but in a business environment where the priority for contractors is to be paid what they are owed, the investment tap is almost entirely turned off.
“Unfortunately, the review does not focus on the main reason for low industry investment and productivity – which is fair and prompt payment.
Ending the practice of ‘cash retentions’ would be an important next step. This would help to boost the balance sheets of smaller businesses in particular, allowing them to invest in the skilled workforce that this consultation is looking for.”
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