Half of subbies have to threaten legal action to get paid

Grant Prior 10 years ago

More than 50% of specialists have threatened legal action during the last year to get paid while nearly a third have refused to work for a main contractor because of their poor payment practices.

The shock figures followed an industry survey for the Enquirer by Constructionline.

Replies from nearly 900 firms revealed that 32.6% turned down jobs last year because of the late payment practices of main contractors offering them work.

And 50.4% of those quizzed said they had to resort to threatening legal action to get their bills paid.

But things are improving with 21% of construction companies claiming payment terms in the industry are getting better compared to just 2% six months ago.

The survey also highlighted the online shift in construction news as traditional magazines continued to fall out of favour.

It revealed that 82% of contractors use online sites for news and work leads while only 31% still look at old-fashioned print products.

Philip Prince, sales and marketing director at Constructionline, said: “Lengthy payment times are something our industry, unfortunately, is all too familiar with.

“Although our survey highlights the clear struggles construction companies are still facing over payment terms – from having to threaten clients with legal action, to refusing to work for clients – it also implies that payment terms in the last six months have improved.

“In September last year, just before Michael Fallon stepped in as the new construction minister, we interviewed construction companies exclusively for the Enquirer.

“Only two per cent said that payment terms were improving. Six months later, 29 per cent of firms said that payment terms were improving, suggesting that central government’s commitment to fair payment practices is indeed paying off.

“It’s clear that the need to campaign for better payment terms among clients must continue, but our survey should be a promising sign for the industry.

“We are already helping our clients and members find ways to deliver effective cost savings to their procurement practices and open up new opportunities to source work.

“Our priority is reducing the burden of pre-qualification within the construction industry by simplifying pre-qualification and promoting good practice.

“This is already helping our members and clients across the UK save millions in time and money.

“By working with buyers and suppliers to promote better buying practices and remove duplication, we hope to continue saving buyers and suppliers time and money, as well as improving efficiency and opportunities in order to get the industry moving.”



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