| Payment Misery for Specialist Contractors |
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Payment periods are getting worse according to the latest NSCC State of Trade Survey, which is adding to the misery for specialist contractors in the current economic downturn. In the last quarter of 2008, only 2% of specialist contractors were paid within 30 days and there was a sharp rise in the number reporting payment periods of more than 60 days (a record high of 41% compared with 27% in the previous quarter). This is in spite of the Government’s Fair Payment Charter which requires payment within 30 days on all projects in the public sector, which accounts for almost 40% of construction work in the UK. The results of the survey also show no improvement in either the number of enquiries or the number of orders being received by specialist contractors. Low levels of enquiries and orders combined with decreasing tender prices is putting further downward pressure on margins. Only a third of specialist contractors are now working at over 90% capacity, the lowest level of activity reported by the specialist sector since 1998. A number of respondents to this quarter’s survey called for tougher legislation to prevent late payment with a member of the Contract Flooring Association (CFA) stating that the Construction Act “does not appear to be respected”. This reinforces the need for changes to the existing legislation, and NSCC strongly supports the proposals to amend the Act’s payment and adjudication provisions published in the Local Democracy, Economic Development and Construction Bill at the end of last year. NSCC continues to run its Fair Payment Campaign to improve payment practices throughout the construction industry, and anyone committed to fair payment is urged to support the campaign by signing up at www.fairpaymentcampaign.co.uk. |
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