Toughened prompt payment target
The Prompt Payment Code (PPC) has been toughened up, with signatories now required to pay small firms within 30 days.
The move comes in response to ECA’s request to government in November 2020 that Code signatories should commit to pay 95 per cent of invoices from smaller businesses within 30 days.
Furthermore, ECA’s submission also called for this approach to be backed up by an enhanced monitoring and reporting process.
Rob Driscoll, ECA director of legal and business, said: “The introduction of a new 30-day requirement for payments to smaller business could represent a fundamental shift in the balance of power and liquidity of SMEs, who form the backbone of the UK construction industry.”
“A reformed Code will transform it to becoming a champion of small business and fair commercial behaviour in these challenging times.”
Federation of Small Businesses (FSB) National Chairman, Mike Cherry, said in Construction Enquirer: “A late payment crisis was massively stifling the UK economy before Covid hit. The pandemic has deepened it.
“FSB has campaigned for good payment practice to become the norm across the UK economy, not least through a toughening of the Prompt Payment Code and the adoption of 30 days as the new maximum payment period.”
The Prompt Payment Code can be accessed here.