Late payment continues to be a major issue for the construction industry, and the impact of the recent economic backdrop and the looming holiday season is making it worse. According to industry insiders, current measures to address the problem, including the Prompt Payment Code and Duty to Report, are insufficient. Many in the industry view Project Bank Accounts (PBAs) as a positive step, as they ensure payment is kept separate.
However, concerns remain regarding who will take responsibility for them. Other potential solutions include direct payment from clients and a digital alternative. The government already advocates for the use of PBAs in public sector contracts, but more transparency is required regarding what constitutes “compelling reasons” not to use them.
According to Iain McIlwee, the CEO of Finishes & Interiors Sector, the voluntary Prompt Payment Code and mandatory Duty to Report are insufficient to address the payment issue in the construction industry. In fact, the situation is worsening. Contractors tend to “fatten the books” and delay payments during the Christmas season, exacerbating the problem. McIlwee warns that this is the worst time of year for the issue, making it critical to address the problem with more effective measures.
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