Major contractors admit 20% of Invoices are paid late

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construction firms advise 20% of invoices paid late

A swathe of major contractors are still failing to pay invoices on time, according to their own payment data.

Build UK has compiled fresh payment-performance data on a range of tier one and specialist contractors, as well as clients, that have filed the information under the government’s Duty to Report on Payment Practices and Performance.

Of the companies included on the list, 49 out of 123 said they paid at least a fifth of their invoices late. The data shows contractors are routinely failing to follow contract terms, despite widespread scepticism over the reliability of the self-reported data.

Contractors affected are thought to be electricians, joiners, self employed tradesmen and plumbers who deal with boiler breakdown etc

Contractors paying invoices late

Major contractors that paid over a fifth of invoices late include Osborne (34 per cent of invoices), Tilbury Douglas, Bam Construct, Bowmer & Kirkland, Robertson and Skanska (28 per cent), and Kier (27 per cent).

Other late-paying builders include McLaren Construction (26 per cent of invoices), VolkerWessels (25 per cent), McLaughlin and Harvey and ISG (21 per cent) and Wates (20 per cent).

The worst-offending contractors are Northstone and Colas, which admitted they paid 68 per cent and 61 per cent of invoices late respectively.

Housebuilders on the list with late-payment times include Vistry Homes (40 per cent of invoices), Countryside Properties (28 per cent), Persimmon Homes (27 per cent) and Miller Homes (22 per cent).

Specialist companies featured include Taziker (74 per cent), Brown and Mason (43 per cent), Select Plant Hire (40 per cent), Briggs & Forrester (32 per cent), Carey Group (25 per cent) and Severfield (20 per cent).

Despite the large volume of invoices still paid late, tier one contractors have reduced the average time taken to pay invoices from 45 to 30 days, according to their own data, and now pay an average of 95 per cent of invoices within 60 days, which is the target for government contracts.

However, scepticism remains about the data. Rudi Klein, director of Klein Legal, said: “Build UK’s figures are not verified and therefore cannot be relied upon. Even they acknowledge the possibility that the stats could include all payments made whether in respect of a £1m subcontract or a packet of biscuits for the office.”

A Construction News editorial published in February also acknowledged “huge gaps in the data”, although it added that there was “no suggestion of deliberate dishonesty — but it is clear that the system is far from perfect”.

Lendlease best for no late payments

Top-performing companies included on the Build UK table include Lendlease with 0 per cent late payments, Morgan Sindall with 4 per cent late payments, Sir Robert McAlpine with 6 per cent late payments and Costain with 9 per cent late payments.

Small business commissioner Liz Barclay said the Build UK data was “a great example of a trade organisation positively influencing payment practices in its sector”.

She added: “This kind of thought leadership drives payment improvements that are so crucial to the survival of small businesses in construction and their ability to grow and thrive.”

Build UK deputy chief executive Jo Fautley added: “Since Build UK first began benchmarking payment performance five years ago, the construction sector has shown significant improvement. There is still more to do, but the value of transparency is clear to see, and our table has driven real change in behaviour led by Build UK members.”

Steve Bratt, who leads the Construction Leadership Council’s (CLC) business models and fair payment workstream, said that the work undertaken by Build UK had “built a solid foundation for further progress to be made”.

He added: “The CLC has recommended that the regulations are amended to incorporate reporting on the value of payments to support more successful and sustainable supply chain relationships.”

 

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