Housebuilders copy Wimpey with invoice cuts

Housebuilders across the UK have introduced a range of emergency cost-cutting measures as market conditions brought about by the credit crunch worsen.

Several firms have held crisis talks with their supply chains, reported Building magazine. Barratt Homes has said it will cut costs by up to 5%, with the precise figure varying between regions and Bellway Homes has asked for a 2.5% discount on all subcontractor and supplier accounts. Meanwhile, other housebuilders including Redrow and Crest Nicholson told Building there were in talks with suppliers and Persimmon said it's planning to close three regional offices.

The news comes as the industry struggles to deal with Taylor Wimpey's announcement that its Bryant Homes arm will knock 5% off subcontractors' previously submitted bills due to concerns over the market.

Furious trade contractors are already launching a fight back in a campaign co-ordinated by the National Specialist Contractors Council (NSCC), reported Contract Journal (CJ).

NSCC CEO Suzannah Nichol is urging trade contractors to officially reject the cuts by writing to Taylor Wimpey using a standard template drawn up by the council's legal department. 'Every member of the supply chain must tell them to clear off because its unacceptable bullying ... they must write to Taylor Wimpey rejecting this move because if they don't respond they could be deemed to have accepted the cuts,' CJ quoted Nichol as saying.

Construction News (CN) said the move by Wimpey is a key test of recently announced fair payment initiatives. It said some suppliers are already threatening Wimpey with legal action if money is deducted. 'We have told them that if any money is taken off, we will go straight to court,' Graham Wren, MD of foundations firm Stent told CN. The paper also quoted Nichol, who said Wimpey had no legal right to make changes to contracts already signed. 'It has completely misjudged the mood of the industry and the direction it's going,' she said. 'There's lots of work about at the moment. A lot of contractors can afford to say 'we're doing fine without you' and just go.'