A freedom of information request by the Electrical Contractors Association (ECA) and the Building Engineering Services Association (BESA) reveals that despite regulations stating a 30-day payment down the supply chain is mandatory, 89% of local authorities are not monitoring if their supply chain is getting paid within this time frame for work carried out
In addition, data also revealed almost half (49%) of councils do not have, or don't know whether they have, a built in contractual requirement for 30-day payment.
Almost one in five (18%) of councils also say they have no intention of building in contractual requirements for 30 day payment, despite the Public Contracts Regulations 2015 state stating that a 30 day payment down the supply chain is mandatory.
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The findings emerge six months on from the collapse of industry services firm Carillion, which revealed the company owed suppliers tens of millions of pounds in unpaid fees and cash retentions.
Alexi Ozioro, Public Affairs and Policy Manager at the BESA, 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."
Rob Driscoll, Deputy Director of Business and Policy at ECA, 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."
(LM/MH)
