Improving the terms of contractor payments
Following consistent pressure from ECA over the past two years, draft legislation to amend the Reporting on Payment Practices and Performance Regulations has now been laid before Parliament for approval. As well as extending the Regulations until 6 April 2031 – a key ask from ECA - the draft legislation confirms that large companies will be required to report on the following additional metrics from 1 January 2025:
- The value of invoices paid within 30 days, between 30 and 60 days, and over 60 days
- The value of invoices not paid within agreed terms
- The percentage of invoices not paid due to a dispute.
The new metrics were designed by ECA to reconcile the picture painted by the payment reports -v- the reality of live experience as insolvencies sore.
The Department for Business and Trade has confirmed that further legislation introducing reporting on retentions should be laid later this year.
Payment League Table Performance
The data on large firms’ payment performance can be accessed here. League table on payment performance for construction can be access from Good Business Pays and Build UK.
The Reporting on Payment Practices and Performance (Amendment) Regulations 2024
"The Secretary of State makes these Regulations in exercise of the powers conferred by sections 3(1) and (4) and 161(2) of the Small Business, Enterprise and Employment Act 2015(1) and sections 15 and 17(3) of the Limited Liability Partnerships Act 2000(2).
In accordance with section 3(8) of the Small Business, Enterprise and Employment Act 2015, the Secretary of State has consulted such persons as the Secretary of State considered appropriate.
In accordance with sections 3(9) and 161(4) of the Small Business, Enterprise and Employment Act 2015 and section 17(4) of the Limited Liability Partnerships Act 2000, a draft of these Regulations has been laid before Parliament and approved by a resolution of each House of Parliament."
This article appears on the ECA news and blog site as "ECA success in improving contractor payment terms" dated February 14, 2024.
--ECA
[edit] Related articles on Designing Buildings
- Contract clauses.
- Fair payment practices.
- Fluctuation.
- Housing Grants, Construction and Regeneration Act.
- The Late Payment of Commercial Debts Regulations 2013.
- Payment notice.
- Payment terms.
- Project bank accounts.
- Prompt payment code.
- Retention.
- Scheme for construction contracts.
- Small Business, Enterprise and Employment Bill.
- The causes of late payment in construction.
- Variations.
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