The Construction Industry Council (CIC) welcomes MP James Frith’s early day motion on public sector payment. Frith, MP for Bury North tabled the motion on 23 January stating that; “small businesses must not be punished for the misdeeds of a failed large company; the collapse of Carillion highlights the payment abuse suffered by sub-contractors engaged in the delivery of public contracts for a Prime contractor; 30-day payment regulations for public sector contracts are routinely ignored by Prime contractors and left unenforced, which facilitate practices such as Carillion's 126-day payment terms, leaving thousands of SMEs exposed”.
He calls on the Government to, “take action to enforce public sector 30-day payment regulations with consequences including the disqualification of those that do not comply from winning public contracts; and calls on the Government to introduce new legislative proposals to place construction retentions into secure and independently held deposit protection schemes and tougher measures to limit borrowing against public contracts”.
The CIC Chairman, Professor John Nolan, welcomes James Frith’s early day motion on public-sector payment. He said that “despite the Construction Supply Chain Payment Charter being in place since 2014 most public sector clients are not enforcing it and it clearly lacks teeth. It is essential that compliance with the Payment Charter is mandatory for all public sector contractors and that this should also extend to their private sector contracts. Failure to comply should result in the contractors’ exclusion from all public sector works. In order to make this work it will be necessary for a central registry to be set up that monitors compliance and facilitates whistleblowing.”
Professor Nolan went on to say that “with regard to retention the Payment Charter states the ambition to move to zero retentions by 2025. There is no reason why this should not be enacted as soon as practicable and retentions banned on all future public sector contracts.”