CFA Is Helping Drive For Faster Payment
THANKS in no small part to the efforts of NSCC, our umbrella organisation, the government, through the department of Business Innovation and Skills (BIS)has recently undertaken a consultation with the construction industry on ‘building a responsible payment culture’.
This is a significant next step in moving ours, and other specialist sectors forward, in overcoming the problem of late and no payment. With the support of the CFA and individual members, NSCC has submitted a comprehensive response. The full document can be viewed at: www.nscc.org.uk/documents/NSCCResponse-BuildingaResponsible PaymentCulture.pdf
The document makes very good reading and I have to congratulate NSCC on another excellent piece of work. It makes eight very pointed recommendations.
These include that payment should be within 30 days on all contracts and that no cash retention should be withheld.
It suggests that these principles along with measures to counter some of the tactics employed to withhold payment should be outlined within a robust construction supply chain payment charter as mentioned in the Industrial Strategy for Construction 2025.
Part of the significance of this consultation lies in the fact that at its heart there is finally an acknowledgement from government that poor payment practices remain a serious issue for the construction industry and recognition that this is a problem for UK plc. Whilst it remains a consultation on a culture change and ‘how we (government) can help small businesses to help themselves to reduce the risk of late payment’ one of the recommendations from NSCC counters with:
‘Legislation should be considered as a sanction if the business community does not change its culture within a specified time period once the parameters for fair payment have been established.’
CFA have lobbied for some time for this type of approach and language to be included and to the benefit of those working in the public and private sectors. Our members work in both.
Whilst we accept that there is an element of culture involved, SME’s ideally need a simple method to seek redress when, for example, main contractors seem particularly adept at bending the rules. As NSCC point out when commenting one main contactors supply chain finance mechanism that extends payment terms to 120 days;
‘On behalf of its members, NSCC investigated this contractor’s payment mechanism, which took over two months and cost more than £3,000 in legal fees, in order to understand and explain it to those Specialist Contractors asked to sign up to it.
Guidance published by NSCC, which demonstrates just how complicated and contrary to the idea of fair payment it is, can be found at www.nscc.org.uk/documents/InformationforSpecialistContractors-CarillionEarlyPaymentFacility-September2013.pdf
I really can’t think of another business model or even example in private life where basic payment or trading principles are so blatantly and successfully disregarded. Can you? Eventually it comes down to a very simple equation. If a job has been successfully completed as per the specification and contract, payment should follow. No further discussion.
Join us to receive the not insignificant support we can currently offer and add your voice to the growing momentum for real and substantial change. As is obvious, it’s a marathon not a sprint but the CFA continues to spear head this battle on behalf of our members and the flooring sector.
The CFA is a leading trade association representing the Flooring Industry. If you would like an application pack or further information on the benefits of membership, please visit our website www.cfa.org.uk or contact the CFA offices on
T: 0115 941 1126
or email firstname.lastname@example.org
This article has been reproduced from the Contract Flooring Journal website. You can find them at www.contractflooringjournal.co.uk.