The latest survey from the ECA, the Building Engineering Services Association (BESA), and SELECT shows the public sector is getting slower at paying despite promises to be best practice clients.

The survey showed 63% of suppliers are facing payment delays from bodies like local authorities and NHS trusts.

The ECA said: “In many cases this directly contravenes government legislation on prompt public sector payment.”

Another 39% of firms said over three per cent of their turnover is being held in retentions by firms up the supply chain.

ECA CEO Steve Bratt said: “The engineering services sector continues to show resilience despite the ongoing challenges of late payment and cash retentions, and the increasing challenge of rising material and labour costs.”

SELECT Managing Director Newell McGuiness added: “Late payment can have a devastating effect on engineering businesses, as well as to the wider economy.

“Cash flow is vital to ensure apprentice recruitment, employment and up-skilling training continues to grow. In our view, improving the velocity of cash is vital to improving our industry.”