Finishes and Interiors Sector (FIS) has supported a recent Telegraph investigation that highlights mounting pressure within the UK housebuilding sector and the growing consequences for specialist supply chains. 

The article focuses on Vistry Homes, one of the UK’s largest housebuilders. While headlines have focused on balance‑sheet risk and market uncertainty, the Telegraph also draws attention to a persistent and systemic issue: late payment and cashflow pressure being pushed down the supply chain. This mirrors long‑standing concerns raised by FIS members and repeatedly escalated by FIS to Government. 

Government‑published payment data referenced in the article shows Vistry pay 50% of invoices late and the value of late and disputed payments exceeds a staggering £220m. Contractors report extended delays, repeated chasing, administrative barriers and requests for payment deferrals, issues that directly weaken business resilience and increase financial risk across the sector. 

Commenting in the article, Iain McIlwee, Chief Executive of FIS, said the scale of the problem was “concerning”: 

“We have had contact with a number of companies reporting payment concerns associated with Vistry, blaming ‘administration problems’, ‘missed applications’ and the old ‘sorry, forgot to process your invoice’,” he said. “These are companies working across multiple sites that have incurred significant costs and are not being paid despite chasing multiple times.”

FIS is clear that treating the supply chain as a source of working capital is not sustainable. It undermines confidence, weakens delivery capacity and ultimately threatens the viability of housing programmes themselves. It also adds to mental health issues in the sector with more than four in ten specialist supplying the housebuilding sector feeling stressed about cashflow “most or all of the time”. 

As Government moves to tighten enforcement on late payment and improve payment transparency, FIS is calling for immediate improvements in commercial discipline, early engagement and realistic cost management to prevent financial pressure being passed downstream.

 The Telegraph investigation reinforces FIS’s long‑standing position: a credible and sustainable housing programme depends on a fair, well‑funded and promptly paid supply chain.

 Vistry have warned investors that rising construction costs could significantly undermine its financial position. Vistry has acknowledged that, under a “severe but plausible” scenario, continued cost inflation could result in it exceeding its committed borrowing facilities.

 As Government move to clamp down on poor payment, FIS is calling for a greater focus in procurement on commercial behaviour to prevent financial stress and risk being passed downstream.

 The Telegraph coverage reinforces FIS’s long‑standing position: a sustainable housing programme depends on a fair, well‑funded, and promptly paid supply chain.

 You can download the latest FIS Research on Procurement, Contracts and Payment Practices in the Housebuilding Supply Chain here. 

You can read the full article in the Telegraph here (subscription required).

 https://www.telegraph.co.uk/business/2026/04/05/iran-war-threatens-housebuilding-giant-with-fresh-trouble

A new report published today sets out how Scotland can strengthen the flow of new entrants into the construction and built environment workforce, helping ensure the sector has the people and skills needed to deliver against the country’s future ambitions.

The report, Pathways to Productivity, commissioned by Skills Development Scotland on behalf of the Skills and Workforce Group of the Construction Accord and delivered by BE-ST, explores how the industry can attract, recruit, develop, train and retain a new generation of skilled workers.

The research draws on engagement with employers, representative bodies, education and training providers and public sector partners across Scotland. The focus is on exploring what conditions are needed to ensure employers within the sector can recruit and train the future workforce it needs. It provides insight into how the current system supporting workforce entry operates and identifies how to strengthen and scale these pathways in the years ahead, creating more opportunities for employers to recruit and overcome skills imbalances.

Construction plays a vital role in Scotland’s economic, environmental and social priorities, from delivering homes and hospitals to upgrading infrastructure and supporting the transition to net zero. Ensuring the sector has a strong and resilient workforce will be key to delivering these ambitions.

Forecasts suggest the construction workforce could grow to around 214,500 by 2029. However, with the Construction Industry Training Board estimating that around 8% of the workforce must be replaced each year due to natural attrition, continued focus on attracting and developing new entrants will remain essential.

At the same time, the sector is evolving rapidly, with increasing demand for skills linked to digitalisation, modern methods of construction and new performance standards. This creates an opportunity to design workforce pathways that not only increase participation in the sector but also support the development of the competencies required for a modern built environment.

The report highlights the importance of strengthening collaboration across the construction skills ecosystem including employers, training providers, representative bodies and public partners to ensure pathways into the industry are accessible, flexible and aligned with future workforce needs.

It identifies six shared measures of success that stakeholders see as central to strengthening the flow of new entrants: workforce capacity, competence, employer confidence, sector culture, workforce composition, and long-term continuity in workforce planning.

The findings form part of wider work under the Construction Leadership Forum’s Skills and Workforce Mission to support workforce development and strengthen the long-term resilience of Scotland’s construction industry.

The research was informed by sector engagement events delivered in partnership with Skills Development Scotland and the Construction Leadership Forum’s Skills and Workforce Group, alongside a survey distributed through networks including BE-ST and the Construction Leadership Forum.

The Executive Summary for Pathways to Productivity is available to read now.

Douglas Morrison, Deputy CEO at BE-ST said:

“Scotland’s construction sector faces long term challenges in both workforce capacity and capability, set against rapidly evolving client and industry requirements. Through engagement with stakeholders across the system, there is clear motivation to increase the flow of new entrants and strengthen lifelong learning.

“However, while there is broad agreement on the challenges, perspectives on solutions vary significantly. This report does not seek to prescribe a single answer but instead sets out a range of practical levers to transform and optimise how we recruit, develop and sustain the workforce for the future. We intend for it to inform longer term discussions on evolving our approach and to encourage active engagement from all those involved across the system.”

Elaine Ellis, Skills Planning Manager (Construction and Net Zero) at Skills Development Scotland, said:

“Workforce and skill shortages persist across many key roles in construction, yet individuals wishing to train for these positions encounter significant barriers to entry and often struggle to secure the new entrant roles necessary for developing competence.

“This research explores some of the reasons behind this paradox. Its aim is to act as a catalyst for change and to set out some of the barriers that need to be addressed. Supporting people to enter the sector – and, crucially, ensuring they can develop the skills required for the future – is not only a win for those aspiring to join a sector rich with opportunity, but also a win for the sector itself and our wider built environment.”

Iain McIlwee, CEO Finishes and Interiors Sector said:

“This report is excellent – it captures the essence of the skills challenge for construction clearly and vitally makes some practical recommendation. Encouraginly too findings are consistent with conversations that have happened through the Contruction Skills Mission Board. Whilst it remains a challenge, I am encouraged that the industry across the UK is starting to pull together and that the support we need is being mobilised. In the backdrop of all that is going on in the world, it is easy for skills to slip down the agenda, but we can’t let this happen or we find ourselves lurching from crisis to crisis and transformation is forever on tomorrow’s list.”

A copy of the report Pathways to Productivity is available here.

To find out how FIS is helping members manage competency and support recruitment, visit FIS Skills Hub here.

If you want to put questions about Skills that you want to put to the runners and riders in the Scottish Elections, why not attend the construction virtual hustings on the 25th March – secure your spot here.

Last week (3rd March) FIS attended the Wales Industry Stakeholders Meeting. This year is a big one in the Principality with the Building Safety Regulations Wales coming into force in July (an FIS training course is currently being completed to support compliance) and the Assembley Elections in May.

The meeting opened with a reminder that the purpose of the session was to gather views from the construction sector to shape discussions of Welsh Construction Forum.

1. Mission Statement – Governance and Next Steps

A recently published industry–government Mission Statement formed the basis for early discussions. The Mission Statement recognises the importance of the sector to Wales and reaffirms a collaborative commitment to supporting a built environment sector that delivers value for Wales – economically, socially and environmentally.

The next phase of tihs work involves establishing a steering group and several Task & Finish groups to drive delivery. A strong theme emerged around governance: participants questioned whether existing models could be adopted rather than creating new structures, stressing the importance of clarity, continuity, and avoiding duplication.

A consistent message was the need for full engagement across the supply chain and client bodies. Success will require an “all in it together” approach, with shared responsibility for driving change. The key areas identified for focus were:

• Pipelines

• Procurement

• Skills and training

• Planning

This Mission Statement also continues to champion the use of Project Bank Accounts (PBAs) to ensure fair and prompt payment across public sector construction supply chains. Planning challenges featured prominently in the discussion, with attendees noting recurring delays and capability concerns. Case studies are being gathered to help diagnose issues and inform future discussions with the planning policy team.

2. Pipelines – Visibility, Data Quality, and Client Engagement

Pipelines remain a long-standing and unresolved challenge. Contributors referenced several past attempts to collate pipeline data, with progress described as slow and inconsistent.

A recurring theme was the need for stronger client involvement: contractors are willing to participate, but progress is limited when public sector clients are not consistently engaged or resourced.

Digital infrastructure also surfaced as a concern, particularly whether existing procurement platforms could evolve to match more advanced UK‑wide systems.

Attendees welcomed news that:

• Welsh Government is actively reviewing recommendations from a recent pipelines report.

• Comparative models, such as the Scottish Futures Trust, have been explored.

• Dedicated resource is being allocated to improve pipeline development and data quality.

• Trialling improvements at a small scale could help test feasibility and industry appetite.

The group emphasised the need for rapid, tangible progress rather than further review or slow iteration.

3. Construction Forum – Purpose, Resourcing, and Sector Priorities

There was broad support for holding a Construction Forum meeting with officials ahead of the election period, even without ministerial attendance (due to restrictions associated with purdah in the pre-election period.

Concerns were raised about limited government resource dedicated to construction policy. There was interest in exploring a more structured unit or team—similar to approaches in other nations—that could tackle issues like pipelines more consistently.

The sector was invited to set out clear, actionable priorities that could be presented to the incoming administration. Attendees urged discipline in this process, noting a history of shifting focus without completing earlier work.

4. Additional Themes Raised

Several additional issues were flagged:

• Utilities delays: Long lead‑times (12–24 months) for grid and service connections pose a major early‑stage risk for projects.

• Planning system: A request for stronger government support and cross‑agency leverage.

• Tendering quality: Concerns around poor tender information and unrealistic tender periods.

• Skills and local investment: A desire for procurement processes to reward demonstrable, proven investment in local employment and skills—not vague commitments or box‑ticking.

There was also a recommendation to ensure housing remains part of future discussions and that sector priorities are shared with senior officials and political leaders.

Members can find out more about the Built Environment Mission Statement and Digital Action Plan for Construction here

FIS continues to campaign for a better construction sector based on the principles set down in a A Blueprint for Better Construction: Delivering Change in the Finishes and Interiors Sector.

UK government has announced that it is scrapping the long-awaited Audit and Corporate Governance Reform Bill saying that the rule changes would be too costly for large companies. This is a blow to the construction supply chain who bore the brunt of the failure of Carillion, has been impacted by persistently high levels of insolvency, the recent news of the escalating exposure to ISG and serious governancee failings being investigated following the failure of Henry Construction,

The Bill had, among other reforms, aimed to hold company directors to account for existing corporate reporting responsibilities and to create a new regulator with stronger powers. According to Department of Business and Trade the decision to scrap the Bill was made to “avoid significant new costs” for large organisations.

A letter from the Minister for Small Business and Economic Transformation, Blair McDougall, to the Chair of the parliamentary Business and Trade Committee, has also been published and further explains the change of direction.

McDougall confirms that with the government’s key priority being to promote growth and reduce administrative burdens, that it would “not be right” to prioritise the introduction of measures that would increase costs on businesses.

“We intend to focus instead on the simplification and modernisation of corporate reporting. We want to make the UK’s reporting regime the most streamlined and proportionate in the world,”

he wrote.

Another key factor in the decision, according to McDougall, was supposed progress in audit quality and regulation since the collapse of Carillion.

Reacting to the news ICAEW’s Chief Executive, Alan Vallance, has stated:

“We cannot hide our disappointment that after many false dawns, the government has decided to scrap the Audit and Corporate Governance Bill. The government had itself recognised that an Audit Reform Bill would increase global investor confidence in UK companies and increase the prospects of growth.”

FIS Chief, Iain McIlwee added his concerns to this decision reflecting:

“We continue to underestimate from a policy perspective how important the construction supply chain is to delivery and growth at our peril. It is all very well to consider the cost to large corporations, but SMEs are the backbone of the construction sector and economy and there is little consideration here to them.  The uncertainty added by the risk of insolvency further undermines our ability to innovate, and to invest in skills and does not take into account the confidence of investors who will be taking a view on the viability of projects based on the resilience of the supply chain.  The backdrop to all of this is that failure to build protection also impacts confidence in the loan, bond and credit insurance market, further removing much needed support from the supply chain..

Almost 8 years after the failure of Carillion it is a disgrace that nothing tangible has been done to protect our supply chain from exposure here. This announcement comes at a time when our community continues to deal with the fall-out from ISG, the evident lack of controls were in place and frankly this another kick in the teeth to those that are footing the bill for the failure of others. We need stability to support growth. Whilst I remain optimistic about the interventions proposed to improve payment and put a nail in the coffin of retentions, we have missed a huge opportunity here to help stabalise the sector. FIS has fed these views into the Construction Minister.”

Build UK has updated its payment performance table to include data on the value of invoices paid within 60 days for the first time. Following the introduction of new reporting requirements from 1 January 2025, large companies are now required to report on both the value and number of invoices paid within 0 – 30, 31 – 60 and over 60 days to provide even greater transparency for the supply chain around payment performance.

Information on the value of invoices paid within 60 days is currently available in the Build UK table for 16 out of 21 tier one Contractor members that are required to report.  The full set of results will be available in May 2026 when the remainder have submitted their first reports.

On average, Build UK tier one Contractor members paid 97% of invoices within 60 days by value compared to 96% by number, which highlights consistency of payment performance within 60 days whether measured by value or number of invoices.

In terms of payment performance it remains a concern that on average 16% of invoices are not paid on time and particularly concerning to see three house builders topping the league for percentage of invoices not paid within terms (Countryside Property – 53%, Vistry – 47% and Crest Nicholson – 39%).  Due to the way that companies are required to report on the value of invoices not paid within the agreed terms, Build UK is not able to include this data in its table at this stage, but report that they are in discussion with the Department for Business and Trade about what can be done to collect and present this data in a meaningful way.  In the meantime, businesses in the supply chain can check data by linking through to the detailed reports provided on the Government Website.

Commenting on the numbers, FIS CEO Iain McIlwee stated:

“We don’t have a full set of data yet and whilst it is positive that value and volume of invoices paid over 60 days does seem to align closely, the devil remains in the detail.  It is a concern that close to a quarter of companies on the list are paying over 20% of their invoices outside of terms. Delve further and it gets worse.  Two national house builders top the table in terms of not paying invoices within the agreed period, averaging half their invoices being paid outside of terms.  Withheld payments from just these two businesses (categorised late and disputed) equates to an eye watering amount – in excess of £0.5 billion.  This for me is scandalous.  This isn’t free credit, it comes at a premium, it impacts viability, productivity and the ability of the supply chain to invest.  This behaviour is at the root of the construction challenge, beyond the business argument it places a huge burden on a beleaguered supply chain, it isn’t just crippling the industry, it is destroying lives.”

The Government has also laid draft legislation to require companies to include their payment results in their Directors’ reports from 1 January 2026 and is consulting on further measures to improve payment practices as part of its Small Business Plan.  FIS is urging members to attend a webinar hosted on the 9th September with the Department for Business and Trade that is supporting the consultation process.

Construction News has today reported that a group of specialist contractors working for ISG have formally threatened the Ministry of Justice with legal action following payments not being forthcoming for works completed and certified undertaken as part of prison construction at the time ISG entered administration.

These contractors and a wider group have been supported throughout by FIS who held a town hall meeting for impacted businesses in November last year when it became apparent that specialist contractors in the community were not going to get the protection expected from the Project Bank Accounts.  There were 17 contractors involved in this first meeting and the group ballooned to 40 from across the construction sector that have been directly impacted.  FIS introduced Hill Dickinson to the conversation and they have been advising the group since.  On 11 August, Hill Dickinson, sent a pre-action letter to the department on behalf of six of these firms, demanding payment of unpaid money that was expected in August last year – the month before ISG’s collapse.

Commenting on the case, FIS CEO Iain McIlwee stated:

“We remain very concerned about how the supply chain of ISG have been treated and what we perceive to be a failing in the protection that should have been afforded through the administration of Project Bank Accounts.  Specialist Contractors did an honest days work and for no fault of their own find themselves again carrying the can for others.  We have tried to use all channels available to us to secure payment for this group of SMEs and are grateful to Hill Dickinson and Len Bunton for their advice throughout the process and to Lord Aberdare for championing the cause of these contractors in Government by raising key questions formally through the house.

Finishes and Interiors Sector will continue to do all we can to try to get some justice for these contractors and to ensure that lessons are not just learned, but changes are made.”.

Hill Dickinson partner Kate Kenneally, who is working on the case, said: “As the ultimate client and a party to the PBA Trust Deed, the MoJ is contractually obliged to ensure these payments are made. The failure to do so constitutes a breach of both the PBA and the associated contractual framework.”

The full article and a detailed analysis of the Prison PBA Scandal is available via Construction News here.

The consultation recognises that late payment impacts 1.5 billion businesses and ultimately costs the UK economy almost £11 billion per year and closes down 38 UK businesses every day.  Commenting on the launch of this consultation on 30th July, the Prime Minister, Kier Starmer stated:

“From builders and electricians to freelance designers and manufacturers—too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses.

“It’s unfair, it’s exhausting, and it’s holding Britain back. So, our message is clear: it’s time to pay up.

“Through our Small Business Plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive, driving growth across the country through our Plan for Change.”

The consultation proposes the following package of legislative measures:

Commenting on the consultation FIS CEO Iain McIlwee stated.

“This is a very welcome piece of work to get our teeth into over the summer, but on the surface is a very good set of measures and encouragingly consistent with the asks in our Blueprint for Better Construction.  Greater scrutiny and tougher sanctions are needed.  Point 8 really jumps off the page when we think about reform in the context of construction.  Mismanagement of Retention remains a contentious and concerning problem that undermines trust, liquidity and with it the wider improvements in culture, investment and productivity that we need to see in construction.

FIS, along with a chorus of associations across construction, has long advocated for reform, but we have seen little action, just roadmaps and bluster. Tackling this in the Construction Act is the only way we will realistically see change.  Our position remains that the Act  should be amended to ensure retentions are automatically released at a defined date. They should not require additional applications from contractors or relate to dates that are not explicit to the completion of their works and events beyond their control.  Additionally, the UK should seek to replicate the recent developments in New Zealand where it has been legislated that retentions are held in trust.  When Collateral Warranties are implemented, retentions should be immediately and automatically returned.”

The consultation will run from 31 July 2025 to 23 October 2025. We are encouraging businesses to have their say. You can respond directly, but please feed in your views to FIS so that they can incorporate your views into their collective response.   Please email any comments to iainmcilwee@thefis.org