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SME late payment debt fears raised in BEIS consultation

The Association of Plumbing and Heating Contractors (APHC) has argued that existing mechanisms to encourage prompt payments in the building services sector have failed to get meaningful results

The Association of Plumbing and Heating Contractors (APHC) has warned that the scope of late payments still owed to SMEs working in the building services sector remains too high, with smaller companies in the industry often being forced onto unfair terms.

The claims have been made in response to a call for evidence launched by the Department for Business, Energy and Industrial Strategy (BEIS) earlier this month that seeks methods to improve payment performance across different industries.

APHC chief executive John Thompson said that government had undertaken a number of commitments to tackle late payments. The association pointed to the introduction of mechanisms such as the Payment Practices Reporting Regulations as one example.

However, Mr Thompson argued that initiatives such as those requiring larger companies to publish statistics on their payment performance had not appeared to drastically tackle late payment debt.

He said, “BEIS’ open consultation states that the government is committed to creating a more responsible payment culture and it details a set of new proposals designed to clampdown on late payments. But are these measures enough to deliver practical improvements? In my view a responsible payment culture has to bring a stop to long payment terms of over 120 days which is far too common in the construction sector”.

APHC said that it members and industry stakeholders can take part in the consultation to help steer government policy around where changes may be welcomed in trying to ensure more responsible payments.

Responses to the consultation will be accepted until November 29.

A number of trade bodies working the building services sector have identified prompt payments, and introducing clear mechanisms of enforcement as being among five key priorities industry hopes to see in the upcoming state Budget.

Chancellor Philip Hammond will set out the latest Budget and potential funding intiatives on Monday October 29.

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