Payment: A top priority for construction

Payment remains the top priority for specialist contractors. Many are only too aware of the stain on our reputation that poor payment records have brought and the damage caused. Without the steady and reliable flow of payments for work done, your business will grind to a halt, and could potentially crash.

Thumbs up, in principle, for government plans to ban slow-payers from public contracts. However, how will slow-payers be defined? We all know that Carillion were awful payers, but before they went bust they were adamant that they paid the majority of their bills on time. Herein lies the challenge to legislators; we don’t know just how many construction contracts end in dispute, but it’s plain to see the sector is far more prone to legal wrangling than other spheres of business, and delaying payment until disputes are settled puts the supply chain under immense pressure. Anything to encourage a new payment culture is very welcome.

We should counsel caution about creating a rigid bureaucratic process in construction. While safety remains a top priority, we need to encourage creativity and flair. The industry’s lacklustre productivity levels and need for radical productivity improvements are well known. During the last decade, output per worker has remained flat in construction yet output in manufacturing has rocketed by more than 50 per cent. To boost productivity, the right skills and resources are essential. But it all has to be paid for somewhere, and starving the supply chain of cash is not the way to raise standards of performance and quality.

The Aldous Bill receives its second reading next week. It is the first step to protect money owed to contractors in a post-Carillion era. With more that 100 MPs supporting the private members bill will the government give it a boost and support it? New week we’ll find out just what the government really thinks about protecting money owed to contractors – is it the priority it should be, or just another fudge?

Adrian JG Marsh