THE Specialist Engineering Contractors (SEC) Group Scotland has called for the Scottish Government to appoint a construction regulator to oversee compliance in public sector procurement and improve supply chain payments.
In April last year, contracting authorities in Scotland with large annual procurement budgets became statutorily bound to declare in their procurement strategies how they intended to ensure 30-day payments along their supply chains.
SEC Group Scotland decided to investigate how strictly this has been adhered to. The organisation surveyed contracting authorities, other than local authorities. Responses received from 29 contracting authorities, including universities and NHS bodies, revealed that only 31% of authorities were considered to be compliant. 45% were not considered to be compliant, 10% were taking steps to comply, while it “wasn’t absolutely clear” on the evidence provided whether the remaining 14% were compliant.
SEC Group Scotland said the “primary reasons” for non-compliance were: a lack of evidence demonstrating that 30-day payments were required in tiers 2 and tier 3 contracts; no indication of measures such as performance monitoring to ensure compliance along the supply chain; and failure to accurately reflect the requirement in the legislation that the 30 days starts from presentation of invoice or similar claim.
Eddie Myles, SEC Group Scotland’s chairman said, “Anecdotal evidence from SMEs in our sector suggests that little has changed. The easiest way to ensure compliance in many cases is to use project bank accounts as suggested in the statutory guidance accompanying the legislation.”
SEC Group has included the results of its findings in a report to the Cabinet Secretary for Finance and the Constitution and the Minister for Business, Innovation and Energy.
The report features a number of recommendations including the appointment of a construction regulator with powers to challenge non-compliance and the setting up of compliance hotlines from contracting authorities to deal with complaints.