Tier one contractors defend their positions after government calls for shake up

Tier one contractors in the UK have dug up their own research to prove that they are giving SMEs at least 64 pence per the pound, challenging calls by the government for more money to be given directly to smaller suppliers to help out SMEs.

According to the UK Contractors Group in a survey that included its tier one members last October, about 64p of every pound that is contracted on a project ends up going right into the pockets of SMEs. The group is going to send its research results over to many prominent government ministers including Michael Fallon the construction minister and the Cabinet Office minister Francis Maude. In addition, it will also pass the information onto its main client departments.

About half of the tier one contractors that participated in the project stated that they subcontracted over 70p with the SMEs that they work with. In addition, the report also showed that there are 18 tier one members that support as many as 30,000 SMEs as part of their large supply chains via contracts that are made for onsite labour, material supplies, and specialist services.

Stephen Ratcliffe, the UKCG director, stated that the new data proves that construction projects are really in reality just a large partnership that takes place between SMEs and main contractors. Therefore, to try and skip either member of the chain would be a financial disaster as they both depend on each other. Money that is given to contractors does not stay in their accounts according to Ratcliffe, but instead gets passed onto the next group of SMEs who work for them.