ENGINEERING services alliance, Actuate UK, has welcomed the UK Government’s Prompt Payment reporting review announcement.
The move formed part of the chancellor’s Autumn Statement last week.
Actuate UK said SMEs represent 99% of the sector and the organisation has campaigned for actions that can eliminate the practice of delayed or late payment. The body added that it can now see that the Government intends to proceed with plans to better payment reporting and strengthening prompt payment through public procurement and a stronger role for the Office of the Small Business Commissioner.
As it is summarised in the Prompt Payment Review report and following consultations, Government has agreed to legislate to extend payment performance reporting obligations that will include a value metric for reporting, so businesses can see the value of invoices, including invoices paid late, and a disputed invoices metric.
They will also introduce reporting on retention payments for businesses in the construction sector and strengthen the Office of the Small Business Commissioner and integrate it with other late payment functions, such as the Prompt Payment Code.
The new Procurement Act introduces 30-day payment as a statutory implied term into public sector contracts at tiers 1, 2 and 3 of the supply chain and ensure the public sector have to report on identical terms to the private sector on payment performance
Rob Driscoll, ECA director of legal & business, commented on behalf of the business group of Actuate UK: “This Autumn Statement represents a milestone acknowledgement in our longstanding campaign with Actuate UK and an alliance of a dozen trade bodies to improve the commercial environment in for our members, and the wider engineering services industry. It clearly demonstrates that Government understands that liquidity of supply chains and cash-flow are priorities also for economic growth and productivity.”
Debbie Petfor, BESA’s director of legal and commercial affairs and member of the Actuate UK business group, added, “It’s heartening to see that the chancellor recognises the importance of healthy cash flow in construction supply chains, especially at a time when high interest rates and slow economic growth have delayed projects and put further pressure on profit margins.
“We have had many false dawns so he really must follow through this time. Late payment continues to blight our sector and, although we have made significant strides in recent years, ultimately this will come down to enforcement and a realisation among larger firms that they will be barred from lucrative contracts if they do not treat their suppliers fairly.
“We now have the digital technology to enable full payment transparency in supply chains so it is easier than it has ever been to hold people to account – and as the industry’s biggest client, the government can make this stick.”
