For decades ECA (Electrical Contractors’ Association) has been at the forefront of advising Government and the Construction Leadership Council, on how best to reconcile late and unfair payment practices. We have helped design, shape and improve payment codes and charters, payment reporting regulations, 30-day payment under the Procurement Act, the Construction Act and requirements that suppliers must pay fairly in order to win more public work.
ECA welcomes the new Government consultation on taking measures against late payments and reforming cash retentions as part of the new Small Business Strategy launched today. The consultation predominantly picks up ideas and strategies ECA has fed into Government over a number of years and goes further than any previous governments have, to date, gone.
The construction industry relies on excessively delayed payment periods, which disproportionally impacts the cashflow of small and medium sized businesses (SMEs), in particular those within the supply chain such as electrical contractors. ECA has been working to end the unfair practice of retentions for many years. ECA will respond to Government by recommending a solution that is fair, enforceable and sustainable.
The Government’s consultation is part of an economy-wide policy commitment to tackle late payments, support small businesses to thrive, and grow a skilled, competent workforce to deliver housing and infrastructure projects which meet net zero targets. Ninety-nine percent of construction companies are SMEs and poor cashflow is a major concern; construction still holds the unfortunate ‘first’ as the sector of the UK’s economy with more reported insolvencies than any other area of commerce.
The deadline for comments to the consultation is Thursday 23 October.
Rob Driscoll, ECA Director of Legal & Business, commented on behalf of Actuate UK’s Business Group:
“Finally, Government is consulting on how best to reconcile unfair and delayed payment practices. In recognition of the need to ‘go further, faster’, Government’s engagement on how to reform retentions marks a seminal once-in-a-generation moment for the industry to come together and shape reform in an area which has stifled growth, innovation and training, crippling supply-chain cash-flow and amplifying the repercussions of insolvency for over a century.
“Let’s hope industry can come together, give clients the comfort they need and suppliers the protection they need, in order to make our industry more resilient to deliver the UK’s built environment.”
ECA is also calling all trades at all levels of the supply chain, to share how late payments impacts their mental health. The findings from this survey will inform ECA’s thought leadership and present the human cost of late payment to Government.
Visit ECA’s website for more guidance and support on retentions and late payments.
Last updated 31 July 25