Government sending mixed messages on late payment
The Crown Commercial Service (CCS) will not be enforcing prompt payment on its £30 billion construction framework. The framework will be used by central government departments and local authorities.
Although the CCS has stated that 30-day payment terms would apply on its forthcoming framework, it confirmed there would be no sanctions on those who failed to meet them.
The NFB believes that this is cause for concern. The £30 billion framework will hoover up the potential work opportunities of many SMEs who will end up being frozen out of a lot of public work for the duration of the seven-year framework. If the supply chain is not paid promptly, it will have a detrimental effect on the health of those companies which no longer have a reliable pipeline of work outside the framework.
Richard Beresford, chief executive of the NFB, said: “This is a particularly puzzling stance from the Government which stated that, from the autumn of 2019, it will only do business with companies that pay suppliers on time.
“With the £30 billion construction framework launching in September, it would be an ideal time for the Government to side fully behind prompt payment by having its various initiatives working together.”