Leicestershire building boss Chris Beighton pleads to Chancellor George Osborne
The boss of a leading building firm has called on the Chancellor to give the beleaguered construction sector a much-needed cash injection.
The plea comes less than two weeks after well-known business Hallam Contracts, of Oadby, was forced into administration.
Chris Beighton, managing director of Westleigh Developments, in Whetstone, said increased investment in infrastructure projects and social housing was crucial to economic growth.
He called on George Osborne for an announcement aimed at boosting the industry in tomorrow's autumn statement.
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"I think the construction industry has got to lead the recovery," said Mr Beighton.
"Yes, there's got to be savings and cutbacks. But investment in social housing and infrastructure is much-needed to kick-start the economy.
"There's huge demand for housing, it's never been greater."
The construction sector has been severely hit by the tough economic climate, with annual sales falling by almost a fifth in the past four years.
There have been around 2,000 construction company failures nationally in 2012.
Hallam, which carried out many public sector contracts, became one of the latest at the end of last month when it collapsed, owing £4 million to 300 sub-contractors and suppliers.
Mr Beighton, who founded Westleigh in 1987, said some of the comments about Hallam's management following its collapse had been unfair.
"It's been very, very difficult," he said.
Westleigh, whose turnover has fallen by around a fifth since 2008, is involved in both commercial building and housing development.
Mr Beighton also called on the Government for a shake-up in planning regulations, saying inconsistencies in rules between different planning authorities was partly to blame for the slump.
Ben Delaney, Midlands operations executive at the National Federation of Builders (NFB), said Hallam's collapse highlighted the need for a change in public sector procurement policy when it came to building projects.
"The increasingly prohibitive costs of bidding for public work mean many SME contractors are unable to compete against larger companies which can devote resources to the time-consuming and costly pre-qualification process," he said.
"Our procurement survey found that 40 per cent of SMEs spend one month each year simply filling in questionnaires for local authorities.
"Long tender lists incur costs and put companies off bidding for work because they turn the process into more of a lottery than a competition.
"By trying to get the lowest price for the project, procurers miss the point – a smaller contractor is more likely to employ local workers, train a local apprentice, generate local spending that stimulates other sectors and produce a lower carbon footprint.
"Sustainable social and economic value is not always achieved with the lowest price."
John Kelly, regional managing partner at insolvency practitioner of Begbies Traynor and joint administrator of Hallam, said the building industry needed major reforms.
"The sector has been dogged by disputed accounts, poor payments and bad debts, clients get locked into endless arguments about final accounts and sub-contractors go bust because they cannot survive without being paid," said Mr Kelly.