NSCC chief executive Suzannah Nichol has called on government to “take a close look” at contractors it is working with who are continuing to use retentions to the detriment of supply chains.
The NSCC’s 2012 Q2 state of trade survey shows that 84 per cent of respondents have monies withheld against them in retentions at an average of £90,767 per respondent.
Of the monies withheld, an average of £27,116 per respondent is overdue for release. This equates to 29 per cent of all retention monies withheld from specialists being overdue for release compared to 32 per cent from 2012 Q1.
However, while just 5 per cent of specialist contractors are being paid within 30 days (3 per cent in Q1 2012), almost half the specialists who carried out work in the public sector in the last quarter report being paid within 30 days on all contracts.
This follows the government’s decision in December 2010 to make 30-day payment throughout the supply chain a contractual requirement on central government contracts.
Ms Nichol said this showed fair payment terms improving, as not all public sector contracts would fall under the government’s fair payment initiative depending on when contracts commenced, so 100 per cent figure would not be currently achievable.
However, she insisted that more needed to be done, and said government needed to play a part in improving main contractor performance.
Ms Nichol said: “Government has an obligation to decide who it wants to work with. If these companies are not contributing to growth in the economy then they should be choosing [between them].
“They won’t knock someone off the list for just one thing but we have said all along, where there are companies not working with government to deliver efficiencies we expect them to take a close look.
“I was with a client and main contractor recently who pay within 30 days and they are delivering their project so much faster than the industry average.
“The client is happy getting the project completed faster than competitors and the contractor knows that he can phone a supplier on Christmas Eve and they’ll work for them because they have their loyalty and respect.”
The NSCC state of trade survey shows positive sentiment in parts with an increase in orders of 7 per cent and 40 per cent expect an increase in workload over the next three months, compared to 30 per cent in Q1.
However, there is a drop in enquiries of 10 per cent.
Specialists are continuing to focus on short-term workstreams however, with the majority looking ahead less than three months (56 per cent) and 29 per cent planning their work between 3 and 6 months into the future.
Market demand, material costs and the availability of labour and finance are the top factors that are currently influencing these plans.
The average percentage of the total workforce possessing CSCS cards was 90 per cent.
Over the next 12 months, 32 per cent expect workload increases with 21 per cent expecting less work.