PPN 021: Payment Spot Checks in Public Sub-Contracts

PPN 021: Payment Spot Checks in Public Sub-Contracts. This PPN sets out how contracting authorities can spot check their public contract supply chains to ensure suppliers meet the payment terms in the Procurement Act 2023.

After consultation with ECA’s leadership role on payment and in response to ECA’s call for more robust monitoring and enforcement of payment requirements, Cabinet Office has published PPN 021.

This PPN encourages contracting authorities to ‘spot check’ their suppliers to ensure that 30-day payment terms are being implemented throughout the supply chain on public sector contracts with a value over £5 million per annum. A term was made a requirement under the Procurement Act 2023 (implemented on 24 February 2025) after work by ECA to introduce mandatory 30-day payment in public sector contracts at tiers 1 and 2 of the supply chain.

From 1 October 2025, public sector authorities should include terms within their contracts to enable them to undertake payment spot checks and request the following information from suppliers at least once every six months:

• A copy of the payment terms for the contract.
• Details of procedures for resolving disputed invoices promptly and effectively and evidence that these have been shared with the supply chain.
• Evidence of payments made (and time taken to pay) in relation to the contract.

Most of this information will be easily extracted form digital payment management systems.

If it is discovered that a supplier is not complying with the requirement to pay within 30 days, a public sector contracting authority may take a number of actions.

This PPN sets out how contracting authorities can spot check their public contract supply chains to ensure suppliers meet the payment terms in the Procurement Act 2023.

This article appears on the ECA news and blogsite as 'ECA Influence: Monitoring Payment Performance' dated 1 May, 2025.

--ECA

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