In response to the Government’s consultation on tackling late payment and retention in the construction sector, FIS has submitted its formal response on the package of proposed legislative measures to address late, long and disputed business to business payments.
A copy of our collective response is available here.
Commenting on the response, FIS CEO, Iain McIlwee stated:
“For decades, FIS has fought tirelessly to expose and dismantle the broken payment and retention practices that plague the construction sector. Drawing on powerful evidence from the Reading Report and direct member testimony, FIS response paints a stark picture: specialist contractors are routinely forced to finance projects upfront, endure months without payment, confronted by routine undervaluation and weaponisation of cash flow issues and suffer devastating losses when retention monies vanish due to insolvency. The current system is adversarial, opaque, and punishes the very businesses that build our spaces. It undermines investment and impairs modernissation.
FIS supports bold reform—mandatory 60-day payment terms, statutory interest on late payments, and the abolition or protection of retention funds.
The message is clear: enough is enough. Reform is not optional—it is essential to protect livelihoods, restore trust, and unlock the full potential of UK construction.”
The consultation acknowledged that late payment costs the UK economy almost £11 billion per year and closes down 38 UK businesses every day. The proposed package of measures are claimed to be the most significant attempt to address late, long and disputed business to business (B2B) payments in over 25 years. They aim to improve cash flow through supply chains and support small businesses with payment disputes. There are also specific proposals referring to the use of retention clauses within construction contracts.
The consultation outcome will be published within 12 weeks of the close of the consultation, or an explanation will be published if this is not possible.