Why is poor payment still an issue?

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

For me, the big news in the industry last week were plans to charge subcontractors 1.5% of package turnovers to become closer strategic partners. The controversial (to say the least) new plans were announced to overhaul and promote better supply chain relationships across the group. Is this encouraging greater collaboration and alignment with subcontractors or is it just pushing the ‘pay to get paid’ culture that I desperately hoped we’d stay away from?

The Prompt Payment Code was launched 11 years ago in an effort to help SMEs get paid faster. While support from the government has only increased over the years, it still hasn’t helped PPC be more successful. The government have always threatened to name and shame those that fail to pay promptly, but never followed through. Despite many being members of the PPC, which expects businesses to pay 95% of their invoices within 60 days, there are still a number of companies who take more time than this to pay their own invoices. How can you expect one thing but do another? It’s especially important that money is paid on time in our industry; on a construction site there could be 20 different trades that participated, and money could be held back because of anyone else in the project chain.  Until recently, there were no financial penalties for not sticking to the PPC, the only punishment was the risk of having the PPC ‘badge of honour’ taken away. The PPC was intended to be a driver for change but it has struggled to have an impact due to a lack of funding and unrealistic expectations. Given that Carillion were still signed up until the day it collapsed, it clearly wasn’t working.

Last week, the Cabinet Office minister wrote to government suppliers reminding them that a new late payment crackdown is on the way. Unlike other efforts to change the culture, this one actually comes with a business incentive that might work. From September, firms that don’t pay at least 95% of undisputed invoices within 60 days face being barred from public sector contracts worth more than £5m, this will ensure the government only does business with companies who pay their suppliers on time, many of which are small businesses.

Finance is a huge problem for our industry and one I don’t think we’ve taken seriously enough in the past. In everyday life you pay for things immediately, whether that be goods or services, you also wouldn’t expect your boss to ask you for money to ensure you got paid on time or earlier – so why should our industry be any different? We saw the same thing happen with Carillion and look how that turned out!

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 500 7880 or email catriona@cene.org.uk.

Stress Awareness Month – mental health in the workplace

By Emily Pearson, Founder & Managing Director, Our Mind’s Work

This month is Stress Awareness Month, need I say it, to increase public awareness about stress. For me, we’re already fairly aware of stress and the more aware we become, the higher the numbers climb for stress-related absence in the workplace.

Like many industries, construction has its pressures. Our industry has and always will be a stressful industry, with workload, client demands and budget concerns being a daily worry. According to statistics from safety barrier manufacturer, A-SAFE, 48% of workers are kept awake as a result of workplace stress with some losing more than 10 hours of sleep a week.

In October last year, the Health and Safety Executive (HSE) released their report ‘Work-related stress depression or anxiety statistics in Great Britain’. The data showed that 2018 saw the highest rates of self-reported work-related stress, anxiety and depression since data began in 2003/04. The rates were quite stable until around 2015 when we started to see them steadily increase. This increase seems to correlate with how much we’ve ramped up awareness of “mental health in the workplace”. The more awareness we have raised has reduced sigma and therefore impacted the confidence to self-report. Add this to an increase in workplace demands and pressures and we are seeing a definite upward trend, which in 2018 accounted for 15.4 million working days lost.

This isn’t news to the HSE, as they have been interested in the impacts of work-related stress since they ran their Stress Priority Programme (SPP) between 2004-2009. The SPP identified a number of industries that had the highest incidence and prevalence of work-related stress and were defined as high priority and subject to proactive inspections. As far as I am aware, I have not seen nor heard of proactive inspections related to work-related stress in high-risk industries. Unsurprisingly, these industries are still, 15 years later, the industries with the highest levels of work-related stress and continue to increase.

Under Section Three of the Management of Health & Safety at Work Regulations 1999 an employer (including managers) are legally responsible for completing a risk assessment and acting on it to reduce work-related stress. The HSE have not been doing enough to actively enforce this, if they were proactively going in to workplaces and inspecting as per their Topic Inspection Pack, we might see some changes.

Morally, preventing a psychological injury caused by the workplace is the right thing to do, but the legal responsibility is there too. The HSE shouldn’t have to enforce this to keep people mentally well, but it looks like this is the route that they will have go down soon. Don’t wait till your company ends up in the court room, act now, the solution is simple.

To hear more about work-place stress and Our Mind’s Work’s solutions for your workplace, contact Emily.Pearson@ourmindswork.com