Despite attempts at enlightened payment practice, subcontractors are still being battered by late payment, according to the latest State of Trade report from the National Specialist Contractor’s Council (NSCC).
The report shows that the percentage of specialist contractors waiting 60-90 days for payment has risen sharply to 21 per cent this quarter from 5 per cent last quarter.
Rudi Klein, chief executive of the Specialist Engineering Contractors Group said the survey gives an answer to those who think payment problems in the construction industry are in the past.
He put the figures down to a tightening of the economy in certain areas, although the cautioned that it was not a massive downturn.
“The comprehensive spending review has tightened spending in the public sector expect in health, education and social housing.
“This tightening is encouraging contractors to hold on to money longer than is necessary. When there was plenty of business, things were more favourable.
“The only way to tackle the payment problem in the long term is to create project bank accounts. That way there is no incentive for anyone to hold on to the money.”
The NSCC survey is carried out quarterly among 28 specialist contractors.
A full copy of the report can be downloaded from the NSCC’s website.