The UK Government’s new strategy, Backing Your Business, sets out a bold and comprehensive roadmap to support small and medium-sized enterprises (SMEs)—with construction firms poised to benefit significantly.
Construction represents 16% of the UK’s SME sector, making it one of the most vital contributors to employment and economic output. The plan’s commitment to “fixing the fundamentals” directly addresses long-standing challenges in the industry. Most notably, the government will legislate to end late payments—a chronic issue that undermines cash flow and business stability. This includes stricter payment terms, mandatory interest on overdue invoices, and potential reforms to cash retentions in construction contracts. These measures could dramatically improve financial predictability for builders, subcontractors, and tradespeople.
Planning reform is another major win. The new Planning and Infrastructure Bill aims to streamline approvals for smaller sites and fast-track brownfield developments. Combined with funding for 300 new planning officers and digitalisation of local authority services, this could accelerate project timelines and reduce administrative bottlenecks.
Energy efficiency and retrofit skills are also in focus. With £9 million earmarked for training up to 18,000 workers in heat pump installation, solar panel fitting, and insulation, construction SMEs will be better equipped to meet growing demand in the green building sector. This aligns with broader goals to decarbonise the built environment and reduce energy costs.
The plan also tackles high street decline and tool theft—issues that affect tradespeople and small contractors. Enhanced policing, new crime prevention initiatives, and reforms to commercial leasing (including banning Upward Only Rent Review clauses) will help create safer, more affordable environments for construction-related businesses.
The plan’s commitment to “fixing the fundamentals” directly addresses long-standing challenges in the industry. Most notably, the government will legislate to end late payments—a chronic issue that undermines cash flow and business stability
Access to finance is another cornerstone of the strategy. The expansion of Start-Up Loans, the Growth Guarantee Scheme, and the ENABLE programme will make it easier for construction SMEs to invest in equipment, hire staff, and scale operations. The plan also includes a mandatory Code of Conduct for lenders using personal guarantees, ensuring fairer treatment of borrowers.
Digital adoption is encouraged through initiatives like the Made Smarter programme and support for AI and electronic invoicing. These tools can help construction firms streamline operations, reduce errors, and improve productivity.
A Timely Innovation: Saible’s DiPPA
As the government moves to disrupt the poor payment culture in construction, innovative solutions like Saible’s DiPPA (Digital Parallel Payment Account), launched in January this year, are arriving at just the right moment. DiPPA is a digitalised evolution of the traditional Project Bank Account (PBA), designed to enhance transparency, efficiency, and security across the supply chain. Unlike PBAs, which can be complex and costly to implement, DiPPAs offer real-time transaction tracking, reduced processing times, and deeper data insights—all while meeting UK Government requirements for PBAs.
By separating payment flows from authorisation flows, DiPPA enables each tier of the supply chain to operate within its existing contractual relationships, creating a full audit trail and reducing disputes. Since 2023, The Save Construction Initiative has been instrumental in supporting Saible’s market entry—championing digital innovation to tackle payment delays and promote financial fairness in construction.
As legislation tightens and expectations rise, tools like DiPPA will be essential for ensuring accountability and trust—helping firms not only comply but thrive in a more equitable business environment.