In response to the Covid-19 pandemic and concerns about the impact on the cash flow within the construction industry, HS2 says that it is accelerating payments to all companies directly in its supply chain.
It is processing approved payments immediately rather than on the contracted payment terms – although it does add the significant proviso ‘when funds are available’.
Tier one contractors in the HS2 supply chain are expected to mirror this and to ensure the approach is followed through all tiers of the supply chain.
HS2 has written to all its direct suppliers requiring that faster payments are made to all companies in its supply chain in all tiers.
The hope is that this will help alleviate some of the financial concerns across the construction sector. An estimated 400,000 supply chain contract opportunities for UK businesses will be created during Phase One of HS2.
HS2 Ltd commercial and procurement director David Poole said: “As we emerge from the pandemic, HS2 will play a crucial role in the recovery of the UK economy and provide a much-needed boost to the construction industry and the many jobs that industry supports. By taking these steps to speed up supplier payments, and by requiring this to continue throughout the supply chain, businesses large or small within the whole HS2 supply chain can feel confident they will be supported by HS2 Ltd.”