Will changes to the Prompt Payment Code do much to support reform in construction?

Will changes to the Prompt Payment Code do much to support reform in construction?

An overhaul of the Prompt Payment Code (PPC) to crack down on delayed invoices owed to small businesses has been announced by the government today (19 January).

Under new reforms, companies that have signed up to the Prompt Payment Code will be obliged to pay small businesses within 30 days – half the time outlined in the current Code.

Despite almost 3,000 companies signing the Code, poor payment practices are still rife, with many payments delayed well beyond the current 60-day target required for 95% of invoices. Currently, £23.4 billion worth of late invoices are owed to firms across Britain, impacting on businesses’ cash flow and ultimate survival.

To help tackle the problem, businesses owners, Finance Directors or CEOs will be required to take personal responsibility by signing the Code, acknowledging that suppliers can charge interest on late invoices under the Code and that breaches will be investigated. Those signed up to the Code will redouble their efforts to ensure payments are made on time and breaches will continue to be publicised by the government in order to encourage compliance.

The move comes as the government seeks to strengthen the powers of the Small Business Commissioner (SBC) to ensure larger companies pay their smaller partners on time. New powers proposed in a recently closed consultation include legally binding payment orders, launching investigations and levying fines.

Small Business Minister Paul Scully said:

Our incredible small businesses will be vital to our recovery from the coronavirus pandemic, supporting millions of livelihoods across the UK.

Today, we are relieving some of the pressure on small business owners by introducing significant reforms to the UK payments regime – pushing big businesses to pay their suppliers on time.

By signing up to the Prompt Payment Code and sticking to its rules, large firms can help Britain to build back better, protecting the jobs, innovation and growth which small businesses drive right across the UK.

Late payment continues to blight the construction sector with many main contractors reporting greater than 30% of invoices not paid within terms. Late payments impact their bottom line, which can hold back investment or job creation and, in the worst cases, lead to job losses and business closures.  The reforms aspire to help to build a culture of prompt payment between companies and challenge UK businesses to change their practices and stand by small partners at a critical time for the UK’s economic recovery.

The changes coming into effect immediately are:

  • requiring a company’s CEO or Finance Director, or the business owner where it is a small business, to personally sign the Code to ensure responsibility for payment practices is taken at the highest level of an organisation
  • introducing a new logo for signatories to use in external communications to show their commitment to the Code, making it more damaging to a company’s reputation to breach it
  • acknowledgement as a condition of signing the Code that suppliers can charge interest on late invoices
  • enabling administrators of the Code to investigate breaches based on third-party information

In addition, the new requirement for signatories to pay 95% of invoices from small businesses (those with less than 50 employees) within 30 days will be effective from 1 July 2021. The target for larger businesses will remain 95% of invoices within 60 days.

The PPC currently has over 2,800 signatories, who are required to pay 95% of their invoices within 60 days or else be publicly struck off the Code until substantial changes to their payment practices have been made.

FIS CEO Iain McIlwee said:

Ultimately anything that puts further pressure on companies to pay is good, but let’s not kid ourselves that this is anywhere near enough.  We have seen companies topping the league of contract awards whilst suspended from the Code and underhand tactics such as no December payments built into contracts to massage working capital figures.  We also know that late payment is just one tool in the box of the unscrupulous – how much time is wasted and angst caused whilst we quibble over tiny amounts as a thinly veiled excuse to withhold larger sums or companies imposing spurious penalties ostensibly because of a delay caused by the sub-contractor, but more typically because of poor programming.

Payment malpractices remain a cancer at the core of construction and until we really, wholesale, buy into the principles set down in the Construction Playbook and track payment within contracts, impose new tools like project bank accounts and scrap outmoded cash retentions through our “standard” contracts and stop rewarding those who choke the supply chain of vital cash with contracts, we won’t see the profound change and with it the modernisation of construction that we are all working towards.

When a company is struck off the Code for poor practice, this is publicly announced by the Small Business Commissioner’s Office. A record of signatories and struck-off companies is maintained on the Prompt Payment Code and SBC websites.

You can check any large companies payment terms here.


Rigorous new targets for green building revolution

Rigorous new targets for green building revolution

All homes and businesses will have to meet rigorous new energy efficiency standards to lower energy consumption and bills, helping to protect the environment, the Housing Minister Chris Pincher has announced.
Responding to a consultation on the Future Homes Standard, the government has set out plans to radically improve the energy performance of new homes, with all homes to be highly energy efficient, with low carbon heating and be zero carbon ready by 2025.These homes are expected to produce 75-80% lower carbon emissions compared to current levels. To ensure industry is ready to meet the new standards by 2025, new homes will be expected to produce 31% lower carbon emissions from 2021.

Existing homes will also be subject to higher standards – with a significant improvement on the standard for extensions, making homes warmer and reducing bills. The requirement for replacement, repairs and parts to be more energy efficient. This includes the replacement of windows and building services such as heat pumps, cooling systems, or fixed lighting.

Housing Minister Rt Hon Christopher Pincher MP said:

Improving the energy performance of buildings is vital to achieving net-zero emissions by 2050 and protecting the environment for future generations to come.

The radical new standards announced today will not only improve energy efficiency of existing homes and other buildings, but will also ensure our new homes are fit for the future, by reducing emissions from new homes by at least 75%.

This will help deliver greener homes and buildings, as well as reducing energy bills for hard-working families and businesses.

The government plans also include measures to tackle;

  • Ventilation – a new requirement for additional ventilation and indoor air quality monitoring in high-risk non-domestic buildings such as offices and gyms, reducing the risk of any potential infections being spread indoors.
  • Overheating in residential buildings – a new overheating mitigation requirement in the Building Regulations.

There will be stringent transitional arrangements in place to provide all developers with certainty about the standards they are building. These will last for one year and apply to individual homes, rather than an entire development.

The government has also announced a consultation on higher performance targets for non-domestic buildings which will mean they will be zero carbon ready by 2025.

Taken together these measures will help to lower the cost of energy bills for families, while helping to tackle our climate change goals.

The government is committed to reaching net-zero and is taking considerable action to address the emissions from buildings – with heating and powering buildings currently accounting for 40% of the UK’s total energy usage.

There has already been considerable progress made on emissions from homes, with overall total emissions reduced by about a fifth since 1990 despite there being approximately a quarter more homes.

In 2019 the government introduced a legally binding target to reduce greenhouse gas emissions to net zero by 2050 – making the UK the first major economy in the world to legislate a zero net emissions target. The measures announced today recognise the important role that the energy efficiency of buildings can play in achieving this goal.

New Guidance to help companies adhere to Scottish Site Operating Procedures

New Guidance to help companies adhere to Scottish Site Operating Procedures

To support members in dealing with COVID requirements and the latest edition of the Site Operating Procedures in Scotland (issued this month by Construction Scotland), new guidance has been issued by the CICV Forum Health and Safety Subcommittee, supported by FIS.  Whilst it is targeted at the Scottish Operating Procedures, this guidance is developed by a panel of experts and draws on the best available guidance, nationally and internationally. 

You can download the latest CICV SOP Guidance Book here 

You can access the FIS COVID-19 H&S Hub here.


Provision of testing expanded to smaller employers where people cannot work from home

Provision of testing expanded to smaller employers where people cannot work from home

Community testing an important strand of a wider plan to increase availability of asymptomatic testing. The ambition of that plan is that anyone that cannot work from home during periods of national restrictions has access to rapid asymptomatic testing through one of 3 delivery channels:

1. Institution/employer-led testing

NHS Test and Trace is working with government departments, institutions and employers across both public and private sectors to support delivery of asymptomatic testing to organisations with more than 250 employees, including those providing critical services. Delivery will be through on-site testing in the workplace, the option to refer employees to a particular testing site and rollout of testing at home to individuals (subject to further MHRA approvals). NHS Test and Trace will provide tests, other peripherals, standard operating procedures, training and other guidance (tests will be provided free to private institutions until the end of March). This franchise model builds on the rollouts that have already been undertaken for NHS staff, adult social care sector, universities and schools.

2. Community testing

Expanding the Community Testing Programme to all local authorities in England until at least end of March with establishment of asymptomatic testing sites (ATS) in communities focusing testing of those people that are permitted to leave home for essential reasons, including those unable to access asymptomatic testing through other routes. Community testing is the route through which staff of employers smaller than 250 people would access asymptomatic testing.

3. Home testing

Accessing testing through either a collection or postal model (once this is approved).

Government recognise that as each of these channels develop and are scaled up, there is potential for overlap and will therefore work closely with local authorities, regional convenors and NHS Test and Trace to ensure a common understanding of approach to ensure citizens are directed to the most appropriate asymptomatic testing channel for their needs. We will also ensure information on which employers are engaged in institutional testing is made available to local authorities to aid planning of their community testing programmes.

Find out more via online briefings

DHSC has (via BuildUK) provided the information below and is running a series of webinars daily 2-3pm from Wednesday 20 January – Friday 29 January detailing what the testing programme entails.

If you have suitable sites and would be interested in being considered for the programme please attend one of the webinars next week to get chapter and verse an if still keen to go ahead email iainmcilwee@thefis.org

Joining Instructions – MS Teams Link – active daily 2-3p, from Wednesday 20th January to Friday 29th January.

Join on your computer or mobile app  – Click here to join the meeting  

Or call in (audio only)  +44 20 3443 8728  – hone Conference ID: 192 073 409#  

If you have any questions please contact Communications@BuildUK.org.

Further information is available here

Please email communitytesting.centralops@dhsc.gov.uk with any queries.

To access the FIS COVID-19 Hub and the latest updates click here

Government develops new video explainers on doing business with Europe

Government develops new video explainers on doing business with Europe

The Department for Business, Energy and Industrial Strategy (BEIS) has launched a series of new, on demand videos to help businesses familiarise themselves with the new rules and the actions they should take. Businesses can find out more about 18 topics, including importing and exporting, trade, data, and audit and accounting.  There is even some construction specific content.

List of video explainers

  1. Businesses Engaged in Emissions Trading
  2. Businesses Hiring Overseas Staff
  3. Businesses Involved in the Horizon 2020 Funding Service
  4. Businesses Involved with Data
  5. Businesses Operating Online
  6. Businesses Preparing and Auditing Financial Accounts
  7. Businesses who Import and Export
  8. Businesses Providing Services to EU Markets
  9. Businesses Shipping Waste between GB and EU
  10. Businesses Working with Intellectual Property
  11. Chemical Regulations
  12. Moving Goods into, out of, or through Northern Ireland
  13. Placing and Selling Goods on the Market
  14. REACH Chemical Regulations
  15. Recognition of Professional Qualifications
  16. Rules of Origin
  17. Trade Tariffs
  18. Businesses and Trade Agreements (not yet available)

Content is split into 12 sectors with Construction and Housing an option to help refine information and help save time trawling through.  Highlights include a video dedicated to Moving Goods into, out of, or through Northern Ireland and a simple introduction to Rules of Origin, which have been flagged as a potential stumbling block for companies in our sector.

Register now to immediately access the video content.

To access the FIS Brexit Toolkit including all the latest updates click here.

FIS welcomes new regulator established to ensure construction materials are safe

FIS welcomes new regulator established to ensure construction materials are safe

Residents will be protected through the establishment of a national regulator which will ensure materials used to build homes will be made safer, the Housing Secretary Robert Jenrick has announced today (19 January 2021).

The regulator for construction products will have the power to remove any product from the market that presents a significant safety risk and prosecute any companies who flout the rules on product safety.  This follows recent testimony to the Grenfell Inquiry that shone a light on the dishonest practice by some manufacturers of construction products, including deliberate attempts to game the system and rig the results of safety tests.

The regulator will have strong enforcement powers including the ability to conduct its own product-testing when investigating concerns. Businesses must ensure that their products are safe before being sold in addition to testing products against safety standards.

This marks the next major chapter in the government’s fundamental overhaul of regulatory systems. The progress on regulatory reform includes the publication of an ambitious draft Building Safety Bill, representing the biggest improvements to regulations in 40 years, and a new Building Safety Regulator that is already up and running in shadow form.

Housing Secretary Rt Hon Robert Jenrick MP said:

The Grenfell Inquiry has heard deeply disturbing allegations of malpractice by some construction product manufacturers and their employees, and of the weaknesses of the present product testing regime.

We are establishing a national regulator to address these concerns and a review into testing to ensure our national approach is fit for purpose. We will continue to listen to the evidence emerging in the Inquiry, and await the judge’s ultimate recommendation – but it is already clear that action is required now and that is what we are doing.

Business Minister and Minister for London Paul Scully said:

We all remember the tragic scenes at Grenfell Tower, and the entirely justified anger which so many of us in London and throughout the UK continue to feel at the failings it exposed.

This must never happen again, which is why we are launching a new national regulator for construction materials, informed by the expertise that already exists within the Office for Product Safety and Standards.

Chair of the Independent Review of Building Regulations and Fire Safety Dame Judith Hackitt said:

This is another really important step in delivering the new regulatory system for building safety. The evidence of poor practice and lack of enforcement in the past has been laid bare. As the industry itself starts to address its shortcomings I see a real opportunity to make great progress in conjunction with the national regulator.

Iain McIlwee, CEO of Finishes and Interiors Sector (FIS) stated:

Bad enforcement is worse than bad regulation as it tilts the market in the favour of the unscrupulous.  At the heart of FIS strategy is the FIS Product Process People (PPP) Quality framework, it is no coincidence that the first P is Product.  We welcome the new regulator and the principles set down in the Building Safety Bill and look forward to working with all involved in helping to lead improvements in quality and safety in the market.

The regulator will operate within the Office for Product Safety and Standards (OPSS) which will be expanded and given up to £10 million in funding to establish the new function. It will work with the Building Safety Regulator and Trading Standards to encourage and enforce compliance.

The government has also commissioned an independent review to examine weaknesses in previous testing  regimes for construction products, and to recommend how abuse of the testing system can be prevented.

It will be led by a panel of experts with regulatory, technical and construction industry experience and will report later this year with recommendations.

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