Counting the cost  

by John Newcomb, BMF CEO
27 February 2018

John NewcombWhat a start to the year!  I’m writing this in the week that Carillion went into liquidation.  By the time you read this, the impact on the building materials supply chain – as well as on thousands of Carillion employees and hundreds of sub-contractors – will no doubt be clearer.  

Within days of the collapse we were asked to gather information from members to help inform the Department of Business, Energy and Industrial Strategy (BEIS) on the level of exposure to Carillion and potential issues that may arise across the supply chain.  

Our initial survey indicated that few merchants are directly affected, but some are likely to be indirectly exposed through customers who are, or were, Carillion sub-contractors.  It is well-known that Carillion operated on 120 day payment terms and most of their sub-contractors are owed money for work carried out prior to the liquidation.  It may, therefore, take time to discover the full effect on our sector, and the greatest impact may well be felt in the longer term and not in the first days, or weeks, following Carillion’s collapse.  

Leading on from this, we are calling on the Government to take immediate steps to promote and enforce the Construction Supply Chain Payment Charter (CSCPC), which is designed to ensure that payments are made to the supply chain within 30 days.   

We have also made it clear that there are great opportunities available for Carillion apprentices, and other staff, to move into the building materials industry. Through our own Apprenticeships Training Agency and our dedicated recruitment portal we can offer recruitment options to former Carillion employees who would like to find out more about furthering their career in the materials supply sector.  

Political profile  

In recent years, the BMF has placed a priority on raising our profile in parliamentary circles, developing policy papers to influence the parties, their strategists & spokesmen, and building relationships with parliamentarians and their advisors.  Our overriding aim is to develop their understanding of the role, value and importance of the building materials’ supply chain within the wider construction industry.  

It is highly appropriate that the first event we are holding to celebrate our landmark anniversary year is a Parliamentary Reception at the House of Commons. This takes place on 24 April and will bring together an invited audience of BMF members, MPs and Peers.  The event celebrates the BMF’s 110th anniversary as a trade association and its 40th anniversary as a Federation by looking to the future and highlighting the talents and opportunity of the next generation of merchants, and the vibrancy and resilience of the industry.  Speakers at the event will include a representative of the BMF Young Merchants’ Group and the Minister for Apprenticeships and Skills.  

The importance the BMF places on building relationships throughout parliament is also evidenced by our regular programme of MP visits to merchants around the country. The most recent was a visit by Rupa Huq MP for Ealing Central & Acton, to Lords Builders Merchants in Park Royal, Ealing, in the lead up to local elections in all London Boroughs in May. With affordable housing a key concern for many Londoners, Dr Huq heard how the building materials supply chain is responding to today’s housing challenges.  

A year of anniversaries  

Finally, the BMF is not alone in marking significant milestones.  Several of our members also have important anniversaries to celebrate.  Our congratulations to them all, but prizes for longevity must surely go to Elliotts for their 175th anniversary last year, and Bradfords, who served their first customer in 1770 and are rapidly approaching 250 years supporting local trades.  That surely takes some beating! 

This article appeared in the February edition of Builders' Merchants News (BMN)