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Universities must do more to improve payment practices, says construction group

A survey of English universities’ construction procurement, carried out by the Specialist Engineering Contractors’ (SEC) Group using the Freedom of Information Act, has revealed major concerns over payment and pre-qualification practices. 

Highlights of the survey include that:

  • just 15% of English universities have monitoring arrangements in place to track payment performance in the supply chain;
  • 60% do not take any measures to ensure payment protection in the supply chain;
  • 95% still apply cash retentions and most use them to finance their other activities; and
  • only 8% of universities use PAS 91 – the standard pre-qualification questionnaire.

SEC Group chief executive Professor Rudi Klein said: “While most universities pay their tier 1 suppliers within 30 days, this performance is not necessarily being replicated along the supply chain. However, there are a small number of university estates departments that have been very proactive in getting supply chain feedback on payment performance.”

“It is also very disappointing that there is little attempt to standardise the pre-qualification process in the university sector.  This is costing industry millions of pounds”.

The Public Contracts Regulations 2015 now require that universities ensure that 30-day payments are made along the supply chain to tier 3 contractors and that they use the standard pre-qualification questionnaire.

Last November, H&V News backed an amendment to the Small Business, Enterprise and Employment Act 2015 to require that all cash retentions be placed in trust. 

The amendment was introduced by fair payment campaigner Debbie Abrahams MP, who also received the Gold Award at the H&V News Awards dinner in April.

A refined version of the amendment was considered by the House of Lords at the beginning of the year.

It was opposed by the coalition government for reasons that were not clear.  Part of the problem was the poor briefing given to business minister Baroness Neville-Rolfe in the House of Lords. 

We now have a chance to have another go and we urge readers to contact their MPs to seek their support.

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