Roofers complain about poor late payment practices

The National Federation of Roofing Contractors (NFRC) is calling for ‘real consequences’ to help address the ‘endemic culture’ of late payment within the UK construction industry.

The NFRC’s latest State of the Roofing Industry report has revealed that 45% of respondents experienced delays getting paid in quarter three of 2024. The proportion of those not paid within 45 days of a job’s completion rose to 39% in quarter three, up from 29% in quarter two. This follows a worrying trend that has seen the proportion of Members not paid within 45 days steadily increase since this survey began in 2020.

The downsides of late payment are clear, and construction experienced more insolvencies in the year to September than any other sector, at 4,264, according to BCIS (The Building Cost Information Service). While this is a 0.7% decrease from the insolvencies to September 2023, construction insolvencies remain 32.5% above prepandemic levels.

NFRC Group CEO James Talman said “Late payments put firms at risk of never being paid and there are numerous NFRC Members who experienced heavy losses when ISG collapsed.

“The lack of accountability and consequences for late payment is exploited by some companies at the expense of those smaller businesses they subcontract to, and it is harming the sector’s productivity.

NFRC says it was encouraged by the launch of the new Fair Payment Code and its improvements on the Prompt Payment Code. Talman contined, “The government will have to go much further than a voluntary code and badges to combat endemic late payments that unfairly benefit those who exploit agreed terms”.

NFRC says that it will closely monitor the total amount of payments which are not made within a payment period and the percentage of invoices that are not paid within a period due to a dispute, data which will be included within new payment reporting requirements in 2025. Poor performance in these areas must have a direct impact on who is awarded government contracts.

Talman concluded “Poor payment practices continue to unfairly strain the finances of roofing and cladding businesses during a period of record insolvencies within construction.”