Professor Rudi Klein, CEO of the UK's Specialist Engineering Contractors鈥� (SEC) Group, applauded the measures. 鈥淭hose advocating unenforceable payment charters are living in dreamland,鈥� he said. 鈥淲e need to follow the example of Western Australia if we are serious about helping SMEs to invest in the skills and technologies desperately needed by the industry and its clients.鈥�
SEC Group comprises the Plumbing and Heating Contractors鈥� Alliance, British Constructional Steelwork Association, Electrical Contractors鈥� Association, Building and Engineering Services Association, Lift and Escalator Industry Association and Select 鈥� the Electrical Contractors鈥� Association for Scotland.
The Western Australian government has recently announced a series of measures designed to tackle the issue.From 30 September 2016 project bank accounts (PBAs) will become mandatory on all state government projects valued between AU$1.5m (拢860,000) and AU$100m (拢58m). SEC Group has been advocating the use of PBAs, which ensure that progress payments are held in one ring-fenced 鈥減ot鈥� to be discharged simultaneously to all supply chain firms. PBAs have been adopted by the UK Government and by the UK devolved governments.聽 They are mandatory in Northern Ireland for public sector projects over 拢2m.聽 PBAs are used on all Highways England projects; as a result third-tier contractors are receiving their payments within 19 days.
Another measure being introduced in Western Australia is a new code of conduct for tenderers will enable prospective tenderers to be barred from tendering for payment malpractice.聽 Consideration is also being given to legislation to fine companies guilty of repetitive payment abuse of their supply chains.
In addition, existing construction payment legislation will be amended to reduce payment times from 50 days to 30 days and there will be detailed statutory arrangements for ring-fencing retention monies will be introduced.
Klein said that the UK government and the devolved governments should take note of these developments. UK construction is the worst performing sector as far as payment is concerned, he said.
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