Majority of councils flout payment laws

UK: The majority of local authorities are breaching rules on payment practices, according to the Building Engineering Services Association (BESA).

A recent freedom of information request conducted with the Electrical Contractors’ Association (ECA) is said to have revealed that 89% of local authorities are not monitoring if their supply chain is getting paid within 30 days for construction work.

The FoI request also revealed that 49% of local authorities do not have, or don’t know whether they have, a built in contractual requirement for 30-day payment. Worryingly, 18% of councils said they have no intention of building in such contractual requirements.

BESA and the ECA argue 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.

“There has been much talk of the payment culture change needed in the industry, and public bodies need to lead by example,” commented BESA’s public affairs and policy manager Alexi Ozioro. “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,” he added.

Rob Driscoll, deputy director of business and policy at ECA, described the non-compliance with the public contracts regulations as “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,” he added.