Belfast Telegraph

Saturday 20 December 2014

New laws set to speed up pay in building sector

New measures to speed up payment to sub-contractors in the construction industry have been welcomed by the sector.

Finance Minister Sammy Wilson has introduced legislation as part of an update of the Construction Contracts (Northern Ireland) Order 1997 which could see main contractors who fail to pay supply chain companies being banned from tendering for future government work.

Speaking in the Assembly, Mr Wilson said that construction accounts for more than £1.3bn of the total spend each year by the Executive with 96% of all construction contracts awarded by the Executive going to local companies.

He added that not all main contractors are holding up their side of the bargain in terms of passing on payment to the supply chain and that some sub-contractors still suffer as a consequence of unacceptable practice.

"I am determined that government policies such as prompt payment are passed down the supply chain," he said.

"Where contractors fail to deliver on this they will be prevented from tendering for future government work.

"The measures approved today will ensure a level playing field and help to provide a fair market in which our local companies can compete."

John Armstrong, managing director of the Construction Employers Federation (CEF) said that slow and non-payment is crushing smaller firms.

"The main contractor who unreasonably withholds payment from its supply chain gains a distinct commercial advantage over its competitors who pay promptly," he said.

"Whilst there is anecdotal evidence of incidents of poor payment practice it is currently difficult to establish the scale of the problem due to a lack of reporting.

"Cases of slow payment are a symptom of the extremely harsh market conditions that the construction industry continues to face.

"Desperation is pushing tender prices so low that pressures on cash flow during contracts are often critical," he added.

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