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Industry body supports government penalties for late payers

04 December 2018

Support for the Cabinet Office statement of its intention to exclude late payers from government contracts has received an enthusiastic reception from the Specialist Engineering Contractors' (SEC) Group.

Many of those affected by the late payment issue operate within the FM and construction supply chain, operating as service providers or contractors.

Following the government's announcement, the SEC said the measure was long overdue and urged the government to act upon its statement.

Chief executive officer Professor Rudi Klein said SEC had advocated the use of yellow and red cards within public sector procurement "for some years".

"In other words, poor payers should be warned about their payment performance and then banned from public sector contracts if their performance doesn't improve," he said.

Large companies have been required to report on their dealings with their supply chain since April 2017 by the Reporting of Payment Practices and Performance Regulations.

Companies are required to provide information about their standard payment terms and the proportion of invoices that are not paid on time, said the SEC.

Professor Klein says this data should give public sector procurers enough evidence to justify excluding those with poor payment records.

"Public sector procurers must also up their game to ensure they pay on time," said Professor Klein. "Furthermore, I now would expect the whole of the UK public sector to follow suit and proactively challenge payment abuse."

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