Opinion: Carillion legacy must be pay and procurement reform

Grant Prior 5 years ago
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Whenever construction hits the national headlines it’s seldom good news.

Enough analysis has been written about the demise of Carillion so now it’s time to take things forward with a few fundamental changes needed in our industry.

The first is fair payment for firms who actually carry out construction work.

Subcontractors are the backbone of the industry yet they are regularly shafted by the major players.

Everyone knows who the bad payers are – and they can’t be allowed to get away with it any more.

Carillion were infamous for years and look how that ended up.

Construction has failed to regulate itself despite lots of good intentions and discussions which ended up as just that – all talk.

The end result is always the same – main contractors and clients stop short of guaranteeing to pay on time.

So specialists are faced with a regular fight for cash as bills still go unpaid for months.

In effect the trade contractors are financing their employers who hold onto cash owed by them.

It’s a rotten system and totally dysfunctional.

The government needs to act immediately to bring in legal limits on payment terms.

The hated retentions system must also be reformed and eventually removed.

While they still hang around retentions must be put into a ring-fenced account to protect suppliers from another Carillion where their money goes down the plughole with the main contractor.

Opening up public contracts to a wider pool of firms is also an obvious move.

Using the same old faces creates complacency rather than the increased competition required to drive innovation.

Civil servants are also culpable for lazily handing out work to familiar names while whole tiers of suppliers are chomping at the bit to win government work and show what they can do.

None of this is ground-breaking. It’s basic stuff which should have been done years ago.

If it takes the collapse of Carillion to finally see a payment and procurement revolution then that will be a positive legacy from a very sad situation.

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