The Civil Engineering Contractors Association (CECA) has welcomed the Government announcement of new measures to tackle poor payment practices.
Included in the announcement were a 60-day cap on payment terms for large firms paying smaller suppliers, mandatory statutory interest on late payments, increased powers for the Small Business Commissioner and action to prohibit withholding retention payments under construction contracts.
CECA stated that it has ‘consistently argued' that poor payment practice undermines cash-flow, confidence, and investment across the infrastructure supply chain, and following the announcement added that tackling this issue head-on will be ‘crucial' to ‘realising the UK's infrastructure ambitions'.
Business Secretary Peter Kyle said: 'Far too many businesses are forced to shut down because they have not been paid – that is simply unacceptable.
'We are unveiling the strongest, most robust changes to payment laws in over a generation – laws that will transform the fortunes of small businesses for years to come and make their day-to-day lives much easier.'
Ben Goodwin, CECA director of policy and public affairs, said: ‘Fair and timely payment is not a marginal issue for our members: it is fundamental to cash-flow, confidence, and the long-term health of the infrastructure supply chain.
‘CECA members have been clear that extended payment terms, the abuse of invoice disputes, and the unjustified withholding of retentions continue to place real strain on businesses, particularly SMEs.
‘The direction of travel is the right one. Government must now ensure these reforms are properly enforced and developed in close consultation with industry, so that they deliver a fairer and more sustainable payment culture across the sector.'
