Most public sector jobs still paid alarmingly late
In Q4 2019, 65 per cent of direct public sector and 84 per cent of indirect public sector jobs were paid for after more than 30 days, according to the latest quarterly sector-wide Building Engineering Business Survey.
The survey, which included data from leading industry trade bodies ECA, BESA, SELECT and SNIPEF, also found that almost half (49 per cent) of respondents said that, in their organisation’s public sector work, clients typically inserted under-30-day payment clauses. Ensuring payment within this timeframe is mandated under public sector payment rules.
ECA Director of Legal & Business Rob Driscoll said: “It is hugely disappointing that, after all the great progress made by public sector in integrating payment initiatives, and in the face of challenges like Brexit, flooding, Coronavirus, IR35 and Reverse VAT, Government are unable to ensure their own payment data meets basic legal compliance obligations.”
In addition to consistent late payment, the survey also showed that almost two-thirds of respondents (64 per cent) were facing cash retentions.
BESA Director of Legal & Commercial Debbie Petford said: “In Q4 the industry once again demonstrated its resilience but as we face more turbulent economic headwinds from unexpected shocks like the Coronavirus, construction SMEs should be shielded from unnecessary burdens like systemic late payment or the abuse of cash retentions.
“The Government must prioritise establishing a retentions deposit scheme and ensure the public sector leads by example through mandatory prompt payment.”