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Government promises action after subcontractors reveal payment delays

The Government is working with subcontractors on ways to increase enforcement of prompt payment guidelines to keep down the cost of public sector projects, H&V News understands.

The National Specialist Contractors Council and the Forum for Private Business have raised the pressure on Whitehall to ensure its supply chain is paid on time.

Former chancellor Alistair Darling this year introduced a requirement for all central government departments to include a clause in their contracts to ensure that all tiers of the supply chain were paid within 30 days.

But the NSCC said this week that 90 per cent of its members were waiting longer than this. The body is in talks with the Cabinet Office, which said an announcement would be made shortly.

NSCC chief executive Suzannah Nichol told H&V News: “Main contractors are getting paid within 10 to 18 days and not passing it on. This is inexcusable and contractors found to be withholding money should not be getting on future public sector frameworks.”

She added that if late payment was monitored effectively, subcontractors would not have to build the costs of chasing money into margins.

Meanwhile, the FPB spoke to defence minister Peter Luff about the case of Glasgow-based member EG Heating and Plumbing, which claims it had to wait 60 days to be paid by a contractor working on a defence job.

FPB head of policy Matt Goodman said: “What is the point in main contractors being paid within 10 days if firms further along the supply chain have to wait considerably longer?”

The MoD said latest figures showed that 97.5 per cent of invoices submitted directly to it were paid within 10 days.

 

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