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89% of electrical subcontractors see 'no improvement' in payment on public sector jobs

Almost nine in ten electrical contractors saw no improvement in payment on public sector contracts in 2014, the Electrical Contractors Association has revealed.

A survey of members by the ECA found that building services contractors continue to receive late payments on public sector work, despite the requirement that tier one contractors pay their supply chain within 30 days.

The survey found that 89 per cent had seen “no improvement” in payment by main or higher tier contractors in 2014, despite government initiatives to improve supply chain payment in construction.

The majority of building services contractors (62 per cent) had less than 40 per cent of their invoices paid within 30 days by the main or higher tier contractor.

ECA director of business services Paul Reeve said that voluntary payment initiatives were not having the intended effect.

He said: “This situation highlights why the new Public Contracts Regulations 2015 – which seek to ensure prompt payment throughout public sector supply chains – are an important part of the solution for contractors.”

The new regulations make it a legal requirement to pay suppliers in less than 30 days all the way through the public sector supply chain.

Mr Reeve said the regulations could be a “game changer”, but that the ECA would work with the next government to ensure the legislation works for suppliers in the construction industry.

He said: “Late and withheld payment is a blight on small and growing businesses.

“The Public Contracts Regulations are a good start, but they fall short of being the solution in construction.

“We expect plans to eradicate poor payment practice to be above party politics and we look forward to working with the next government to monitor and further improve the payment situation for contractors.”

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