The Construction Industry Council (CIC) is the representative forum for the professional bodies, research organisations and specialist business associations in the construction industry.

Government and Industry agree new construction payment charter

A Construction Supply Chain Payment Charter that sets out payment terms of 30 days has been agreed by the Construction Leadership Council (CLC), the body set up to deliver the Government’s industrial strategy for construction.

The Charter sets out 11 “Fair Payment Commitments”. These include a commitment to reduce payment terms to a supply chain to 30 days from January 2018. The Charter also sets out stages before this: terms of 45 days from June 2015, and 60 days with immediate effect.

Other commitments made in the Charter include not withholding cash retentions, not delaying or withholding payment, and making payments electronically.

Any organisation that becomes a signatory to the Charter agrees to apply the fair payment commitments in its dealings with its supply chain; to be monitored for the purposes of compliance by reporting against a set of agreed key performance indicators (KPIs); and to consider the performance of its supply chain against those KPIs when awarding contracts.

Philip King, CEO of the Institute of Credit Management, will now lead work on the development of monitoring arrangements for the commitments made by signatories to the Charter.

Companies represented on the Construction Leadership Council that have agreed to sign up to the Charter are:

  • Barratt Developments
  • Berkeley Group
  • British Land
  • Imtech UK
  • Kier
  • Laing O'Rourke
  • Skanska
  • Stanford Industrial Concrete Flooring
  • Stepnell

Peter Hansford, the Government’s Chief Construction Adviser, said:

“This Charter signifies the Construction Leadership Council’s commitment to small and medium-sized business, and the important role they play in the construction industry.

“Through the Council, the Government is working very closely with industry to give businesses of all sizes the confidence to invest – securing high skilled jobs and a stronger economy for everyone.”