Build UK, a representative organisation for the UK construction industry says that its members are continuing to improve their payment performance based on data submitted under the Duty to Report on Payment Practices and Performance.
Build UK began publishing this information just 12 months ago, ahead of the Cabinet Office confirming its intention to take account of payment performance when awarding major public sector contracts. Since then, the average time taken to pay invoices by Contractor members has reduced by 5 days to 40 days, with the average percentage of invoices paid beyond terms falling from 34% to 25%.
Construction is the only sector that is benchmarking performance and the increased transparency is starting to change the industry’s culture and drive improved practices. Companies across the supply chain are taking action to improve their payment systems, creating the opportunity to tackle the wider issues associated with the high risk, low margin construction business model.
For the first time, Build UK has included within its table the percentage of invoices paid within 60 days, in order to reflect the increasing use of this metric within the industry. Build UK also continues to provide information on the payment performance of central Government departments. Across Government, 96% of invoices are paid within 30 days with 12 of the 16 departments paying over 95% of their invoices within 30 days.
Build UK Deputy Chief Executive Jo Fautley said “Over the past year, Build UK members have taken significant steps to improve payment performance within their organisations, demonstrating the value of increased transparency. Whilst there is still work to be done, with a number of companies recently being suspended from the Prompt Payment Code, this issue is now firmly under the spotlight at a senior level and these latest results show that the industry is serious about tackling it.”
Chair of the Construction Leadership Council Andy Mitchell said “I welcome the publication of the latest payment results of Build UK members. Construction remains the only sector that has taken the initiative to publish its results in this way and, with Build UK’s leadership, firms in the sector are changing the culture of late payment and improving payment performance.”