NAO launches probe into subcontractor payments

Aaron Morby 11 years ago
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The Government’s independent spending watchdog is launching its first official probe into whether subcontractors are really being paid on time on public contracts.

Since the 2010 Budget, all new central government contracts are required to include a provision requiring subcontractors’ invoices to be paid within 30 days.

But there have been several complaints that some main contractors have attempted to side-step prompt payment commitments.

Several frustrated subcontractors have resorted to complaining to the Government’s mystery shopper service, which allows firms to name and shame poor payers.

The National Audit Office has called on subcontractors with both good and bad experiences on jobs to complete a survey.

Its findings will inform an in-depth report to Parliament this Autumn and may be the subject of a hearing by the House of Commons Public Accounts Committee.

The main aim is to nail whether Government measures to speed payments down the supply chain on public works have been successful.

Auditors also hope to identify ruses that may be hindering prompt payment like disputes over value or quality of work.

It also aims to identify whether the Cabinet Office’s Mystery Shopper Service working as a way of naming slow paying main contractors.

The coalition Government has pledged to tackle late payment head-on.

But a lot of the threatened heat on the industry has been dispersed by the Construction Leadership Council’s voluntary industry payment charter covering private sector work.

This commits firms to reducing payment terms to 30 days from January 2018 with interim stages of 45 days from June 2015 and 60 days with immediate effect.

So far just two main contractors Laing O’Rourke and Skanska have signed up to the commitments. But major subcontractor trade bodies are backing the initiative.

A Government pledge to force large companies to publish their payment records has now been kicked into the long grass after Business Secretary Vince Cable admitted needed legislation would not be introduced before the next election.

Click for anonymous payment survey. To be completed by 18 July

 

 

 

 

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