This week Kevin Hollinrake MP, Minister for Enterprise, Markets and Small Business Government opened a consultation into Payment Practices and Performance Regulations 2017. The consultation is looking primarily at whether the Regulations should be extended beyond their current expiry date of 6 April 2024. It also provides an opportunity to consult on other potential amendments and improvements to the Regulations resulting from the views expressed by those who responded to the recent statutory review.
The consultation sets out proposals on:
- amending the expiry date to extend the Regulations beyond 6 April 2024
- including an additional value reporting metric
- referencing payment reporting in a company’s director’s report
- a clarification of how supply chain finance is reported
- including a new metric on disputed invoices
- retention payments in the construction sector
FIS fed into the initial review via the Small Business Commissioner and will be responding to the consultation on behalf of our membership.
FIS continues to speak out on poor practice witnessed in construction (see recent article in Construction News – FIS CEO calls out Payment Practices). We will be also be drawing on research recently conducted with the University of Reading that has highlighted “46% of subcontractors reported waiting for 40-59 days in comparison to only 24% of main contractors. Perhaps most strikingly, only 6% of specialist subcontractors reported being paid within 30 days.”
Specifically on retentions the consultation is exploring:
Question 6: Do you agree that the Regulations should be amended so that payment practice and performance reports should include information on the standard retention payment terms in qualifying construction contracts?
Question 7: Do you agree that the Regulations should be amended so that payment practice and performance reports should include statistical information on retention payments?
But, it should open up an opportunity to raise more broadly concerns over retentions and our response will draw on questions raised in the research conducted with the University of Reading.
If you are interested in feeding directly into the consultation, you can access all the information here. Please do send a copy of any response or thoughts that you would like embraced in the FIS response to email@example.com. Equally if you want to talk through your views, don’t hesitate to call Iain on 0121 707 0077.
You can see the current FIS position on retentions here along with our wider approach to concerns over procurement and payment fairness in the sector.