Industry

31 JUL 2018

SMALLER FIRMS ATTACK INDUSTRY BODY’S LATE PAYMENT FIGURES AS THE “ULTIMATE INSULT”

A leading representative organisation for the UK construction industry has been lambasted for “portraying tier one contractors like industry pioneers” after Build UK published details concerning the payment performance of its members.

The trade association for UK main contractors had hailed a “bold step” in revealing that none of its Tier 1 members pays its supplier within the 30-day average, despite them all previously committing to doing so after signing up to the Construction Supply Chain Payment Charter, aimed at ensuring standard payment terms of 30 days and abolishing retentions.

Build UK chief executive Suzannah Nichol (pictured above) claimed that the first of its kind exposure represented increased transparency surrounding the industry’s payment culture and showed firms were “serious about changing the way they do business”.

“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,” she added. “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, this prompted an angry response by the National Federation of Builders, which represents small and medium-sized (SME) businesses and regional contractors. The federation said data published showed “utter disregard” by Build UK members for their failure to follow best practice and fulfil a legal requirement.

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%.”

Despite the claims made by the FMB, cabinet office minister Oliver Dowden also supported Build UK and built up the role government played in ensuring payment rules were adhered to.

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.”

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