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Mon November 29 2021

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Nine out of 10 councils breach payment rules

17 Jul 18 Almost nine out of 10 (89%) local authorities are failing to check their supply chain is getting paid within 30 days for construction work, it has been revealed.

The revelation that 89% of councils are in breach of the Public Contracts Regulations 2015 has emerged from a freedom of information request submitted by the Electrical Contractors Association (ECA) and the Building Engineering Services Association (BESA).

It is also revealed that 49% of local authorities do not have, or do not know whether they have, a built-in contractual requirement for 30-day payment. In fact, 18% of councils say they have no absolutely no intention of building in contractual requirements for 30 day payment.

This is despite the fact that the Public Contracts Regulations 2015 state that 30 day payment down the supply chain is mandatory, and that public bodies should take steps to ensure this takes place.

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BESA public affairs manager Alexi Ozioro said: “There has been much talk of the payment culture change needed in the industry, and public bodies need to lead by example. The industrial strategy calls for a fairer payment system, the Chancellor has highlighted the need to tackle late payments and a Crown Commercial Services consultation even poses excluding bad payers from public contracts. We applaud the government for engaging with the poor payment debate, but it is about time action matched words.”

ECA deputy director Rob Driscoll added: “Non-compliance by the public sector with the Public Contracts Regulations is unacceptable. This is especially significant given the cautionary tale of the collapse of Carillion – one of the key strategic suppliers to government – which ultimately had a wider impact on SMEs. If government purports to support fairer payment practices, these findings show that there is work to be done. ECA and BESA will continue to work with industry and government to deliver a fairer payments system in construction.”

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