Almost nine in 10 local authorities are not monitoring their supply chain and therefore ensuring getting paid within 30-days, breaching Whitehall regulations to ensure prompt payment.
The research has revealed the minimal effort that local authorities have focused on prompt payment. The research by construction trade body, the Electrical Contractors Association and Building Services Association (BESA), obtained Freedom of Information data concerning the powers of these local authorities. According to the data, almost half of local authorities do not have or don’t know whether they have, a built-in contractual requirement for 30-day payment.
Nearly one in five councils also said they had no intention of building in contractual requirements for 30-day payment. This is a direct contradiction of Public Contracts Regulations 2015 that state that 30-day payment down the supply chain is mandatory, illustrating the indifferent attitude some local authorities harbour towards prompt payment. This needs to be changed, and positive payment behaviour implemented.
Rob Driscoll, Deputy Director of Business and Policy at the Electrical Contractors Association 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.
Alexi Ozioro, Public Affairs and Policy Manager at the BESA, said “There has been much talk of the payment culture change needed in the industry, and public bodies need to lead by example.”