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24 April 2014 | Gurjit Degun
Nine major construction companies have committed to ensuring their suppliers are paid within 30 days with no retentions, by 2025.
British Land, Berkeley Group, Barratt Developments, Skanska, Laing O’Rourke, Intec UK, Kier, Stanford Industrial Concrete Flooring and Stepnell are the first to sign up to the Construction Supply Chain Payment Charter.
The Charter comes from the Construction Leadership Council (CLC), the body set up to deliver the government’s industrial strategy for construction. It includes a commitment to reduce payment terms to 60 days with immediate effect, and 30 days from January 2018. Other commitments include not withholding cash retentions, not delaying or withholding payment, and making payments electronically.
All signatories agree “to apply the fair payment commitments in its dealings with its supply chain; to be monitored for the purposes of compliance by reporting against a set of agreed key performance indicators (KPIs); and to consider the performance of its supply chain against those KPIs when awarding contracts”.
The Institute of Credit Management (ICM) worked with the construction industry, the Department for Business, Innovation and Skills and the CLC to produce the charter.
Philip King, chief executive of the ICM, said: “The next step is to agree the key performance indicators by which signatories will be measured, and working to convey both the spirit and the actual meaning of this important new initiative to the widest possible audience.”