Construction minister Michael Fallon has threatened to “name and shame” banks who do not “step up” and lend to construction companies.
In an exclusive interview with Construction News, Mr Fallon said he shared concerns that banks are not lending to the industry.
“Access to finance is absolutely critical,” he said. “I’m losing patience with the banks.”
The minister has written to banks’ chief executives and the British Bankers’ Association to insist they lend more.
“If I do not see progress soon, I’m going to name and shame those who are not stepping up,” he said.
“The banks have had a lot of help through quantitative easing and funding for lending in reducing the cost of money and that’s not being passed through.
“Construction should be leading us out of this flat period – and [it] will,” he said.
In his first face-to-face interview with the construction press since replacing Mark Prisk as the business minister in last month’s Cabinet reshuffle, Mr Fallon said he wants to do more to ensure prompt payment for contractors, and warned large companies with long payment periods to improve their terms.
He said he wanted to see more large firms in all sectors sign up to the government’s code of conduct, warning that they too could be outed for poor practices.
“We need a reverse league table, a table of shame,” he said.
So far about 100 construction firms have signed up to the government’s Prompt Payment Code, but only a few of the big players are among them.
He pledged to improve access to business support for SMEs, saying he felt the proliferation of schemes could be confusing.
“There are probably too many [schemes]. I want small companies to understand how they can access help if they have a particular issue.”
Mr Fallon said he would “do everything I can to push my colleagues across Whitehall to deliver the government side of procurement”, adding that the government “has got to crack on with its own programmes”.
He said the schools building programme is now on track, and committed to look into the delays to the Defence Infrastructure Organisation contracts. “Anything the Ministry of Defence does takes forever,” he added.
In a former role Mr Fallon helped build out fitness clubs and day nurseries as development director for Dragons’ Den businessman Duncan Bannatyne. He said he knows what it is like “when you are out on the front line working with other developers trying to get planning, dealing with subcontractors”.
Mr Fallon has held meetings with main contractors including Laing O’Rourke, Skanska and Willmott Dixon, and has been talking to other industry figures.
But he said he wanted to see how the government “can talk to the sector better”, saying he felt the relationship with the industry had been “a little fragmented”.
“In the automotive industry there’s an Automotive Council; in aerospace we have a very strong aerospace partnership,” he said. “[In construction] there are lots of different bodies, trade associations.
“It’s early days but I just wonder if we need to see if we can put the partnership on a more coherent framework that includes SMEs as well as the large companies.”
Mr Fallon was a member of the Treasury select committee when it published a report in January warning that PFI should not be reintroduced “by the back door”.
He told CN that PFI would survive “in a new form”, saying there had been some problems over the relationship between risks and costs in the original PFI, but added: “We can’t do without some form of PFI.”
He stressed that there is funding and support available now for major infrastructure projects and through the UK Guarantees scheme.
Chairman of the Olympic Delivery Authority Sir John Armitt was announced as the head of an independent infrastructure commission at the Labour Party conference last week, with an aim of achieving cross-party consensus on infrastructure projects. Commenting on the commission, Mr Fallon said: “We will have to see whether it’s a political gimmick or whether it’s useful.”
He criticised the legacy on infrastructure investment that he said had been left behind by the Labour government. “It would have been nice if we had inherited from the last government a major programme of renewing our energy capacity,” he said. “We are having to rebuild some of the technological expertise that we have lost and start again.”