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NEWS


We need move quickly to tackle late payment abuse says SEC


T


he Specialist Engineering Contractors’ (SEC) Group – representing the largest


value sector in the UK construction – welcomes Government’s efforts to address the practice of late payments and the commitment to change the culture of unfair treatment of SMEs and illegal practices, but there is still more to be done to ensure implementation and enforcement.


SEC Group is pleased to


s ee Government adopting the view that the role of the Small Business Commissioner should be strengthen with powers akin to the Groceries Code Adjudicator and taking responsibility for company compliance with the Prompt Payment Code.


This is something that SEC Group has strongly argued for and we will expect to see more detail on these proposals in the forthcoming consultation.


However, SEC Group had


hoped that BEIS would proceed further with mandatory Prompt Payment Code and reduce the maximum payment terms to 30 days (currently at 60 days), in accordance to the Public Contracts Regulations 2015.


SEC Group also agrees with the Government’s intention to bring greater transparency on how the supply chain finance is reported in company accounts, as this was


something we had suggested as one of the lessons to be learnt from Carillion’s collapse. We will be following with interest the guidance developed by BEIS and the Financial Reporting Council.


Against a background of a


worsening financial crisis in the construction industry – with the balance sheets of the largest construction companies showing increasing fragility – effective measures are now required to improve payment security. SEC Group believes it is now imperative that the Government legislates to mandate the use of project bank accounts (PBAs) and ensures that retention monies are secured in a separate trust account or scheme.


Rudi Klein, the SEC Group chief executive said: “We believe that Kelly Tolhurst (the Small Business Min ister) is sincere in wanting a change in payment culture. We are pleased that she intends to act on the issue of cash retentions in absence of industry agreement on a solution [Kelly Tolhurst MP responses in House of Commons, 19/06/2019]. We also know that she is very sympathetic to the notion of PBAs.


“Statutory protection of


retentions monies and mandating PBAs will transform the lives of the overwhelming majority of small firms in the industry. ”


Climate Controls


www.acr-news.com


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