The Scottish Building Federation has raised concerns about latest preliminary UK insolvency figures which indicate that the number of Scottish construction firms either forced into compulsory insolvency or subject to creditors’ voluntary liquidations has doubled between the last quarter of 2009 and the first quarter of 2010.

The organisation is calling for a rapid conclusion to ongoing negotiations to form a UK Government at Westminster in order to give certainty that decisive action will be taken to give the industry a more certain future.

Preliminary figures from the Office of National Statistics, published by the UK Insolvency Service, show that the number of construction companies in Scotland entering compulsory insolvency jumped from 22 in the last three months of 2009 to 42 in the first three months of this year.

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Meanwhile, for the same period, the number of Scottish firms in the construction sector subject to creditors’ voluntary liquidations rose from five to ten.

SBF Chief Executive Michael Levack suggested the harsh winter might be partially to blame but warned of further bankruptcies in the construction sector during the balance of 2010.

He said: “The very harsh winter we have suffered this year will have done nothing to help those construction firms already badly affected by the economic recession. I would suggest that has been an important contributing factor which lies behind the jump in insolvencies we have seen at the beginning of this year. But there is a real risk that we may see many more Scottish building firms becoming insolvent over the coming months.

“Uncertainty is a natural breeding ground for company insolvencies in the construction industry. That is why I am very concerned that negotiations to create a new Government at Westminster cannot be allowed to drag on and need to reach a swift and positive conclusion.

“As soon as possible, politicians across the political spectrum need to re-focus their attention towards getting on with the business of building a sustainable recovery for our economy. And as we have always said, a consistent and comprehensive programme of capital investment must be one of the cornerstones of that recovery – coupled with concerted action to get the banks lending again.”

(GK)