Construction costs and subcontractors
Michael Fitzmaurice raised rising construction costs and the plight of subcontractors left unpaid when main contractors go into liquidation. The Taoiseach pointed to strong employment and said the Government would review the law and regulations governing subcontractor payments.
The Taoiseach is well aware of the housing situation and the construction sector around the country. There is a dire need to get work done and to get houses built. I know the Government is bringing Bills forward in the coming weeks. Regarding the construction sector, I acknowledge the Minister, Deputy Michael McGrath, revised figures for what we would call Government jobs that contractors would do, but there is a serious problem around the country where houses are being built and other works that are not Government related are ongoing and the price of materials and of doing the job has gone up. Battles are going on. Looking at the statistics, the number of companies ceasing business or going into liquidation is worrying. The Taoiseach saw earlier this year what happened to one of our biggest road contractors, Roadbridge. We see this week after week, especially in the Dublin area. Unfortunately, many of the companies that are ceasing are from Northern Ireland. The big problem is that smaller subcontractors, whether brickie or a person with excavators to do groundwork or people who do other phases of work, are being left high and dry. This has a knock-on effect on those subcontractors. In fairness to him, former Senator Feargal Quinn tabled a Bill that required a certificate which contractors could later go into court with.
We have to try to nip this in the bud. If a client employs a main contractor, the subcontractor who works for the client should have a signature or certification before the client gives the main contractor the money to make sure that subcontractor is paid. I know the Taoiseach will move positions in the next week. I do not know where he will go. Whether he has the trade portfolio, or in whatever part of government this is required, I ask that a regulation or legislation be brought in so that where the client is paying the main contractor, there is a certification system so that every subcontractor is paid on-site. It is not complicated. Revenue has all the details of any subcontractor who works on-site. It is not a long list to have to go through. I urge Government to do this because there are many small employers who have two, three or four people working for them and they are being left high and dry. It will put them to the wall. Will the Government look at that in the coming months?
Comment on this
I thank the Deputy for raising the issue. Capacity in the construction industry and the economy more generally has expanded significantly in the past year. Some 416,000 more people are working in the economy now than in 2020, so the bounceback from Covid was significant. Many people lost jobs as a result of Covid but it is still an extraordinary figure. We set a target of 2.5 million people in employment for 2024. It has already been exceeded in 2022; we are now at 2.55 million people working in the economy. That is notwithstanding Brexit, the pandemic or the war in Ukraine, all of which have had significant impacts on the cost of building materials and so on. It is interesting to see that approximately 40,000 more people are working in the construction sector than last year and approximately 20,000 more than in 2019. Capacity is being built up and we are trying to build more.
The Deputy raised specifics about subcontractors. He referred to the Construction Contracts Act 2013, which provides for the regulation of payments to subcontractors in particular. This is an issue that was raised at that time. He is right that former Senator Feargal Quinn piloted it through the Seanad and then the Oireachtas. In light of what the Deputy said, we will undertake to review that Act. I will ask the Minister for Public Expenditure and Reform to review it to see if it can be improved. If the Deputy has any input and potential amendments to make, it could help to get the balance right. I recall much discussion of that Bill at the time. We are open to such reviews.
Comment on this
I thank the Taoiseach for his reply. I acknowledge the additional people working in the economy. I am talking about when a client, be it the State or a private client, hires a main contractor. At the moment, some of those are going into liquidation. Unfortunately, many seem to be coming from Northern Ireland, from the trend I have observed. The subcontractor, a smaller outfit, is then left high and dry for the money. That is the big problem. I acknowledge the great work of Feargal Quinn. Given time, the then Government brought it in. However, subcontractors need a certificate and it is only after the event that they can try to go to court. It is not much good if the main contractor has gone into liquidation. I welcome that the Taoiseach is open to reviewing this again. I am proposing that before the main client, whether the State or the client who is building something privately, pays the main contractor, there should be some type of certification that the subcontractors on the site have signed to make sure that their payments are kept up to date.
We have seen significant fallout from what happened with Roadbridge over the past six or eight months. Smaller subcontractors are being put to the wall because they cannot withstand the hit that they must take by not getting paid, whether for a month or two months. Generally, it runs to three months. If they have machines or people hired for different work, the figure builds up. Subcontractors do not have the capacity to withstand the belt from that. It is okay for whoever has gone into liquidation. They are a different story.
However, these people have to face everything and try to survive it, which is impossible. I welcome what the Taoiseach said about being open to reviewing it.
Comment on this
I again thank the Deputy for raising the issue. He might feed through some of the individual examples to the Minister, Deputy Michael McGrath, or me. That is one aspect of it. On the second aspect, we will give this further consideration in the form of a review of the existing Act and the regulations that govern this area of payment of subcontractors, to see if we can get the balance right.