National Specialist Contractors Council (NSCC) has submitted a comprehensive response to the Government’s discussion paper, Building a Responsible Payment Culture, and has proposed that late payers are barred from public sector contracts and named and shamed.
The discussion paper recognised that poor payment practices are endemic across the industry and extended payment terms, unfair withholding of money and deliberate late payment are fundamental issues which have to be addressed. This is in spite of the fact that the Government has previously put in place various legislation and policies to combat these problems.
The NSCC response highlighted that legislation alone is not always the best driver for changing behaviour and it is the continued acceptance of poor behaviour which allows late payment to continue. Main contractors need to accept that their actions have a huge effect throughout the entire supply chain and that, by withholding money and paying late, they are stifling innovation and growth in an industry which is currently fighting its way out of the deepest recession in living memory.
NSCC put forward a number of recommendations to address the issue of late payment including the Government supporting a construction supply chain payment charter which sets out the minimum payment requirements that businesses should implement, companies being publicly ‘named and shamed’ on poor payment performance, and those that are found not to comply with the construction supply chain payment charter being made ineligible for public sector work.
The NSCC response was supported by personal letters from a wide range of Specialist Contractors highlighting the damaging impact that late payment has on their businesses, which shows the extent of this issue and the need for an effective response from Government.
NSCC Chief Executive Suzannah Nichol said: “As long as late payment is socially acceptable and public sector contracts are awarded to companies known for poor payment, then this will remain a huge ongoing problem for the industry. We urge the Government to listen to the voices of the Specialist Contractors who have spoken out on this issue and to take this opportunity to change the payment culture of the UK business community for good.”
The full response submitted by NSCC can be viewed on the NSCC website.