Last edited 24 Jul 2019

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ECA Institute / association Website

Progress on poor payment practices

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[edit] Introduction

The Electrical Contractors Association (ECA) has long campaigned to improve payment practices for small businesses in the electrotechnical and engineering services industry.

Its view is that, if Government integrated its existing initiatives promoting transparency, opportunities in procurement and digital means of enforcement, the effect on business culture would be profound.

Thanks to continued work by ECA with the Cabinet Office, Small Business Minister, Small Business Commissioner and others, an ambitious new package of measures will help to level the playing field for the UK’s 5.7 million small businesses, delivering on the modern Industrial Strategy’s ambition to make Britain the best place to start and grow a business.

To combat unfair payment practices, the government has sought to implement several key initiatives. These include:

[edit] Linking payment performance to procurement opportunities

ECA has made its policy positions on prompt payment abundantly clear through its responses to many consultations, meetings and engagements with the Cabinet Office, the Minister for Small Business, the Small Business Commissioner, and engagements with the Industrial Strategy and Sector Deal.

That said, in recent months ECA has welcomed some encouraging developments, namely:

  • The announcement from Oliver Dowden in November 2018 of a new policy which will require bidders to answer a series of questions about their supply chain management and tracking systems in order to remain eligible for public sector opportunities;
  • Companies House adding a warning to its website that the information available on its site has not been independently verified. This is aimed at combatting short-term fraud, where companies file deliberately false accounts and use credit to fraudulently obtain goods that are delivered to third-party addresses;
  • The Small Business Commissioner Paul Uppal being appointed to the Prompt Payment Code Compliance Board in order to strengthen its monitoring and enforcement regime, and
  • Action on companies who fail to meet the standard of the Prompt Payment Code (PPC). This has so far seen 34 companies removed or suspended from the Prompt Payment Code during the past quarter

[edit] Creating a responsible payment culture

In her response to the consultation, Minister for Small Businesses Kelly Tolhurst announced several further measures. These include:

Ending the culture of late payment will boost SME productivity, break down barriers to growth and improve cash flow. By concentrating our collective efforts as government, industry and trade bodies united behind the above measures, the UK could become one of the most exciting places to do business – surely a positive outcome for all.

[edit] About this article

This article was written by Rob Driscoll, ECA Director of Legal & Business. It was previously published on the ECA website and can be accessed here.

Other articles by the ECA on Designing Buildings Wiki can be accessed here.

[edit] Related articles on Designing Buildings Wiki