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Councils: 90% 'failing to monitor 30-day payment rule’

Local authorities have come under fire from trade bodies for not monitoring whether construction firms are paying supply chains within 30 days.

The Building Engineering Services Association (BESA) and the Electrical Contractors’ Association (ECA) claimed that the majority of councils were not monitoring whether suppliers were meeting the 30-day terms mandated by the Public Contracts Regulations 2015.

The trade bodies said 90 per cent of the 195 councils that responded to their freedom of information requests were not monitoring whether supply chains were being paid within 30 days.

Almost half (49 per cent) told the trade groups they did not have, or did not know if they had, a contractual requirement to pay in this timeframe.

One in five (18 per cent) said they had no intention of including this in future contracts.

BESA public affairs and policy manager Alexi Ozioro said: “Public bodies need to lead by example.

“The industrial strategy calls for a fairer payment system, the chancellor has highlighted the need to tackle late payments, and a Crown Commercial Services consultation even poses excluding bad payers from public contracts.

“We applaud the government for engaging with the poor payment debate, but it is about time action matched words.”

ECA deputy director of business and policy Rob Driscoll said: “Non-compliance by the public sector with the Public Contracts Regulations is unacceptable.

“This is especially significant given the cautionary tale of the collapse of Carillion – one of the key strategic suppliers to government – which ultimately had a wider impact on SMEs.

“If government purports to support fairer payment practices, these findings show that there is work to be done.”

The construction sector deal published at the start of this month featured a pledge from government to work with the Construction Leadership Council to improve payment practices in the industry.

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