Bank lending to small building firms through a Government lending scheme has dwindled to almost nothing, according to a new report.
Accounting firm Wilkins Kennedy said that money from the Enterprise Finance Guarantee (EFG) scheme fell by 86% to £3.5 million in the three months to June, compared with a record high of £25 million in the same period three years ago.
Nick Parrett, of Wilkins Kennedy, said: "The lack of funding for small construction businesses has had serious implications on the construction industry as a whole, as well as for the wider economy.
"In 2011 alone, over 3,500 construction companies went bust. Problems with funding and the financial stability of small suppliers can hit the entire supply chain and have led to many building projects stalling.
"A lot of jobs have disappeared or are at risk. These figures show the EFG scheme is now essentially meaningless for getting funding to small businesses in the construction sector."