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Sat August 18 2018

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Build UK exposes poor payment record of main contractors

31 Jul Build UK, the trade association for UK main contractors, has exposed its own members for failing to pay suppliers in time.

None of the Tier 1 members of Build UK pays its supplier within 30 days average, despite them all having committed to doing so.

Build UK has published information on the payment performance of its contractor members using data submitted under the Duty to Report on Payment Practices and Performance.

Identified as a specific action within the recently published Construction Sector Deal, Build UK members have collectively agreed for Build UK to benchmark them on both the average time they take to pay invoices and the percentage of their invoices paid beyond terms.

Build UK said that exposing the poor performance “demonstrated a real commitment to addressing this long-standing issue and will help to drive good practice”.

Murphy comes out as the consistently slowest payer, taking an average of 66 days to pay invoices. Willmott Dixon is the best on this basis, taking 33 days.

However, when judged by percentage of invoices paid late, Interserve comes out as the worst, paying only 17% of its invoices within agreed terms.

Contractors ranked by average time taken to pay invoices

Company Name

Percentage (%) of Invoices not paid within agreed terms

Average Time Taken to Pay Invoices (Days)

Murphy Group

66

66

Engie

1

61

Balfour Beatty

54

54

Kier

48

54

John Sisk & Son

64

52

Vinci

36

52

William Hare

29

51

Interserve

83

50

Sir Robert McAlpine

70

49

Galliford Try

26

47

Keltbray

11

47

BAM Construct

49

45

Mace

43

45

Morgan Sindall

24

44

Seddon

7

44

Wates

62

44

Multiplex

47

43

ISG

48

42

Skanska

11

41

Aecom

52

40

Bouygues

31

40

VolkerWessels

19

35

Canary Wharf Contractors

8

34

Willmott Dixon

8

33

Build UK chief executive Suzannah Nichol said: “The creation of Build UK offered the industry the opportunity to sit around the same table and work together to tackle the issue of payment, which continues to hold the industry back from realising its true potential. Transparency is essential to changing the industry culture around payment and the Duty to Report has provided a consistent means of comparing performance. This bold first step by Build UK and its members shows that the leaders within the sector are serious about changing the way they do business.”

However, the National Federation of Builders (NFB), whose members not only suffer at the hands of the slow paying majors but effectively subsidise them, dismissed all this as cant. It said that the data published by Build UK showed not only its members' failure to follow best practice and fulfil a legal requirement to pay clients within 30 days but also an utter disregard for small and medium-sized (SME) businesses and regional contractors.

Neil Walters, national chair of the NFB, said: “Fair practice is essential to changing the industry culture around payment, not transparency. Transparency is a legal requirement, not a bold step. Procurement regulations already require 30-day payment terms down the supply chain, but the first thing tier one contractors do is change the contract terms to suit their interests and all but force SMEs to sign the amended terms to get paid.

“Seeing Build UK portray tier one contractors like industry pioneers is the ultimate insult. Build UK members, who make up less than 1% of the construction industry, are failing the 99%.”

However, the government welcomed Build UK's initiative in collating the data. Cabinet Office minister Oliver Dowden said: “Government is leading by example in fair payment practices. All public sector organisations are required to pay undisputed invoices in 30 days and ensure this payment term is passed down the supply chain. Build UK is leading the industry by publishing its members’ payment performance. I hope to see more of these initiatives being led by industry to help us drive a positive change in culture and help eliminate poor payment practices.”

Contractors ranked by percentage of invoices paid late

Company Name

Percentage (%) of Invoices not paid within agreed terms

Average Time Taken to Pay Invoices (Days)

Interserve

83

50

Sir Robert McAlpine

70

49

Murphy Group

66

66

John Sisk & Son

64

52

Wates

62

44

Balfour Beatty

54

54

Aecom

52

40

BAM Construct

49

45

Kier

48

54

ISG

48

42

Multiplex

47

43

Mace

43

45

Vinci

36

52

Bouygues

31

40

William Hare

29

51

Galliford Try

26

47

Morgan Sindall

24

44

VolkerWessels

19

35

Keltbray

11

47

Skanska

11

41

Canary Wharf Contractors

8

34

Willmott Dixon

8

33

Seddon

7

44

Engie

1

61

Information is currently available for 24 out of 27 Build UK contractor members in scope of the Duty to Report. The full set of results will be published by Build UK in October once the remainder have submitted their first reports.

MPU

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