Build UK has updated its payment performance table to include data on the value of invoices paid within 60 days for the first time. Following the introduction of new reporting requirements from 1 January 2025, large companies are now required to report on both the value and number of invoices paid within 0 – 30, 31 – 60 and over 60 days to provide even greater transparency for the supply chain around payment performance.

Information on the value of invoices paid within 60 days is currently available in the Build UK table for 16 out of 21 tier one Contractor members that are required to report.  The full set of results will be available in May 2026 when the remainder have submitted their first reports.

On average, Build UK tier one Contractor members paid 97% of invoices within 60 days by value compared to 96% by number, which highlights consistency of payment performance within 60 days whether measured by value or number of invoices.

In terms of payment performance it remains a concern that on average 16% of invoices are not paid on time and particularly concerning to see three house builders topping the league for percentage of invoices not paid within terms (Countryside Property – 53%, Vistry – 47% and Crest Nicholson – 39%).  Due to the way that companies are required to report on the value of invoices not paid within the agreed terms, Build UK is not able to include this data in its table at this stage, but report that they are in discussion with the Department for Business and Trade about what can be done to collect and present this data in a meaningful way.  In the meantime, businesses in the supply chain can check data by linking through to the detailed reports provided on the Government Website.

Commenting on the numbers, FIS CEO Iain McIlwee stated:

“We don’t have a full set of data yet and whilst it is positive that value and volume of invoices paid over 60 days does seem to align closely, the devil remains in the detail.  It is a concern that close to a quarter of companies on the list are paying over 20% of their invoices outside of terms. Delve further and it gets worse.  Two national house builders top the table in terms of not paying invoices within the agreed period, averaging half their invoices being paid outside of terms.  Withheld payments from just these two businesses (categorised late and disputed) equates to an eye watering amount – in excess of £0.5 billion.  This for me is scandalous.  This isn’t free credit, it comes at a premium, it impacts viability, productivity and the ability of the supply chain to invest.  This behaviour is at the root of the construction challenge, beyond the business argument it places a huge burden on a beleaguered supply chain, it isn’t just crippling the industry, it is destroying lives.”

The Government has also laid draft legislation to require companies to include their payment results in their Directors’ reports from 1 January 2026 and is consulting on further measures to improve payment practices as part of its Small Business Plan.  FIS is urging members to attend a webinar hosted on the 9th September with the Department for Business and Trade that is supporting the consultation process.

Construction News has today reported that a group of specialist contractors working for ISG have formally threatened the Ministry of Justice with legal action following payments not being forthcoming for works completed and certified undertaken as part of prison construction at the time ISG entered administration.

These contractors and a wider group have been supported throughout by FIS who held a town hall meeting for impacted businesses in November last year when it became apparent that specialist contractors in the community were not going to get the protection expected from the Project Bank Accounts.  There were 17 contractors involved in this first meeting and the group ballooned to 40 from across the construction sector that have been directly impacted.  FIS introduced Hill Dickinson to the conversation and they have been advising the group since.  On 11 August, Hill Dickinson, sent a pre-action letter to the department on behalf of six of these firms, demanding payment of unpaid money that was expected in August last year – the month before ISG’s collapse.

Commenting on the case, FIS CEO Iain McIlwee stated:

“We remain very concerned about how the supply chain of ISG have been treated and what we perceive to be a failing in the protection that should have been afforded through the administration of Project Bank Accounts.  Specialist Contractors did an honest days work and for no fault of their own find themselves again carrying the can for others.  We have tried to use all channels available to us to secure payment for this group of SMEs and are grateful to Hill Dickinson and Len Bunton for their advice throughout the process and to Lord Aberdare for championing the cause of these contractors in Government by raising key questions formally through the house.

Finishes and Interiors Sector will continue to do all we can to try to get some justice for these contractors and to ensure that lessons are not just learned, but changes are made.”.

Hill Dickinson partner Kate Kenneally, who is working on the case, said: “As the ultimate client and a party to the PBA Trust Deed, the MoJ is contractually obliged to ensure these payments are made. The failure to do so constitutes a breach of both the PBA and the associated contractual framework.”

The full article and a detailed analysis of the Prison PBA Scandal is available via Construction News here.

Government has backed up commitments to tackling the scourge of late payments and retention in the construction sector by seeking views on a package of proposed legislative measures.   The package of new measures is claimed to be the most significant attempt to address late, long and disputed business to business (B2B) payments in over 25 years.

The consultation recognises that late payment impacts 1.5 billion businesses and ultimately costs the UK economy almost £11 billion per year and closes down 38 UK businesses every day.  Commenting on the launch of this consultation on 30th July, the Prime Minister, Kier Starmer stated:

“From builders and electricians to freelance designers and manufacturers—too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses.

“It’s unfair, it’s exhausting, and it’s holding Britain back. So, our message is clear: it’s time to pay up.

“Through our Small Business Plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive, driving growth across the country through our Plan for Change.”

The consultation proposes the following package of legislative measures:

Policy	Description
1. Audit committees and board-level scrutiny of large company payment practices	In September 2024, the government reaffirmed commitments to legislate on audit committees and other board level responsibilities to improve payment practices. The government believes further positive change could be achieved by increasing discussion and scrutiny of large companies’ payment practices at board level.We would welcome views on how government could best achieve this in the future with proportionate regulatory burden. For example: A. Ensuring audit committees or company boards, where companies have them, provide commentary and make recommendations regarding payment performance to company directors before the data is submitted to government and included in the director’s report. This would include data provided as part of the Reporting on Payment Practices and Performance Regulations 2017, and any interest on late payment liabilities. B. Ensuring the Small Business Commissioner writes to audit committees and company boards, where companies have them, when i) undertaking payment performance reporting assurance and ii) when investigating any other matter relating to a companies’ payment practices. We would welcome views on these ideas, including the likely positive effects, costs, or any unintended negative consequences. We would also welcome other additional ideas to encourage greater discussion of payment practices at board level.
2. Maximum payment terms	The policy will amend The Late Payment of Commercial Debts (Interest) Act 1998, removing the exemption that allows businesses to agree to payment terms longer than 60 days if considered not ‘grossly unfair’. This will effectively limit payment terms between UK businesses to 60 days. Subject to further consultation, this policy may subsequently reduce this limit from 60 days to 45 days after 5 years.
3. A deadline for disputing invoices	The policy will amend The Late Payment of Commercial Debts (Interest) Act 1998, introducing a 30-day invoice verification period. Businesses who wish to raise a dispute will need to do so within 30 days of receiving an invoice, otherwise they will be liable to pay the invoice in full within the agreed payment terms, alongside any statutory interest or debt recovery costs if the invoice is paid late.
4. Mandatory statutory interest	The policy will amend The Late Payment of Commercial Debts (Interest) Act 1998, making the statutory interest rate payable on late payments mandatory. This will remove the ability to negotiate compensation rates lower than the statutory rate. This will increase existing financial incentives to pay invoices on time.
5. Additional reporting on statutory interest	The policy will amend The Reporting on Payment Practices and Performance Regulations 2017 to include additional reporting requirements around statutory interest liabilities. This will further increase transparency around poor B2B payment behaviour and informs other policies that aim to improve the utilisation and payment of statutory interest.
6. Financial penalties for persistent late payers	The policy will introduce new legislation, which gives the SBC powers to issue financial to businesses who persistently pay their suppliers late. The policy will use payment behaviour data submitted by businesses under The Reporting on Payment Practices and Performance Regulations (2017) to identify and issue financial penalties to persistently late-paying businesses, with penalties based on businesses’ unpaid statutory interest liability.
7. Additional powers for the SBC, including assurance of payment reporting data	The policy will amend The Enterprise Act 2016 to give additional powers to the SBC. The additional powers would improve the SBC’s ability to conduct investigations into poor B2B payment behaviour (beyond its current complaints scheme), allow it to provide legally binding arbitration in disputes, and impose financial penalties or make arbitration awards after an investigation or arbitration process.The policy will also enable the SBC to investigate the accuracy of the payment reporting data that large businesses provide under The Reporting on Payment Practices and Performance Regulations 2017. This will improve the quality of reporting data and support the reporting regulations original objectives of improving transparency around B2B payment behaviour.
8. Use of retention clauses in construction contracts	The policy will amend Part 2 of the Housing Grants, Construction and Regeneration Act (1996), to either prohibit the use of retentions or to introduce requirements to protect retention funds deducted and withheld from insolvency and late or non-payment.

Commenting on the consultation FIS CEO Iain McIlwee stated.

“This is a very welcome piece of work to get our teeth into over the summer, but on the surface is a very good set of measures and encouragingly consistent with the asks in our Blueprint for Better Construction.  Greater scrutiny and tougher sanctions are needed.  Point 8 really jumps off the page when we think about reform in the context of construction.  Mismanagement of Retention remains a contentious and concerning problem that undermines trust, liquidity and with it the wider improvements in culture, investment and productivity that we need to see in construction.

FIS, along with a chorus of associations across construction, has long advocated for reform, but we have seen little action, just roadmaps and bluster. Tackling this in the Construction Act is the only way we will realistically see change.  Our position remains that the Act  should be amended to ensure retentions are automatically released at a defined date. They should not require additional applications from contractors or relate to dates that are not explicit to the completion of their works and events beyond their control.  Additionally, the UK should seek to replicate the recent developments in New Zealand where it has been legislated that retentions are held in trust.  When Collateral Warranties are implemented, retentions should be immediately and automatically returned.”

The consultation will run from 31 July 2025 to 23 October 2025. We are encouraging businesses to have their say. You can respond directly, but please feed in your views to FIS so that they can incorporate your views into their collective response.   Please email any comments to iainmcilwee@thefis.org