A quarter of specialist contractors say they are now waiting more than two months to get paid for work they have done.
The National Specialist Contractors’ Council launched a Fair Payment Campaign in September, calling for 30-day payment periods on all contracts.
But in its latest State of Trade report, the number of contractors saying they have waited more than 60 days to get paid rose to 25 per cent in the three months to September, up from 10 per cent the previous quarter. The average payment period remains well over 30 days.
The NSCC said ‘pay-when-paid’, retentions and valuation abuse all remain a significant problem for specialists.
The Office of Government Commerce’s Fair Payment Charter is due to take effect in less than six weeks. This will insist on 30-day payment.
But NSCC chief executive Suzannah Nichol said: “Our survey provides evidence that payment periods are lengthening.”
The survey also reveals that one-fifth of contractors have not been able to bid for jobs in the past three months because they lack skilled staff and 17 per cent say they are finding it more difficult to recruit people with the required trades.
John Nelson, executive secretary of the Specialist Engineering Contractors Group, said cashflow problems caused by late payments meant firms were quitting the industry.
He said: “It is a serious business. Sons aren’t taking over from their fathers because they’ve watched their dad spending the whole time chasing round after money.”
The survey reveals half are planning on expanding in the next year, one-third are expecting more work to become available and more expect margins to go up rather than down.