Build UK reveals improving payment terms

Build UK has published the latest payment results submitted by its members under the Duty to Report on Payment Practices and Performance, which continues to drive greater transparency across the construction sector and is leading to improved payment practices.

Contractor members showed time taken to pay invoices has fallen to an average of 36 days, down from 45 days just 18 months ago. Over a third have actually improved their performance by 15 days or more during this period. On average, Contractor members now pay 91% of their invoices within 60 days, up from 80%.

Build UK has been benchmarking its members’ payment performance since July 2018, in line with the target set out in the Government’s Construction Sector Deal. Build UK also continues to provide information on the payment performance of central Government departments, with 13 of the 16 departments paying over 95% of their invoices within 30 days.

Compiling data in this way has presented a coherent picture of payment practices within construction, which has been welcomed by Government for driving culture change and enabling informed decision-making.

This initiative, alongside the recent publication of guidance to support the Build UK recommendation on contract terms, is part of Build UK’s wider strategy to promote collaboration in the supply chain and tackle the wider issues associated with the high risk, low margin construction business model.

Build UK Deputy Chief Executive Jo Fautley said: “We have seen consistent improvement from our members since Build UK began benchmarking their payment performance in 2018. Contractor members in particular have taken the opportunity to change the industry’s approach to late payment, recognising the importance of transparency to drive good practice. There is still work to be done but these latest results show that we are definitely heading in the right direction.”

The new figures a week after a Freedom of Information survey of Welsh health authorities revealed a lack of action in curbing payment abuse of SMEs in construction supply chains.  The survey was carried out by SEC Group during a period which saw the collapse of Dawnus Construction which left £40 million owing to SME trade contractors across Wales.