Laura Sharman 22 August 2017

Figures show decline in prompt payment by public sector

Figures show decline in prompt payment by public sector image

The number of public sector bodies failing to pay engineering services firms within 30 days has increased in the second quarter of this year, new research has shown.

A survey, conducted by ECA, the Building Engineering Services Association (BESA) and SELECT, found in the second quarter of this year, 63% of SMEs had not been paid within 30 days despite government legislation on prompt payment.

This is an increase from 55% in the first quarter of 2017.

The survey also found that four in ten firms (39%) said over 3% of their turnover is being held in retentions by firms up the supply chain.

CEO of the ECA, Steve Bratt, said: ‘With public sector support – including prompt payment – our sector can deliver key infrastructure projects and provide skilled technical employment. This would support of government objectives for growth and delivering whole-life asset value to the UK economy.’

SELECT managing director, Newell McGuiness, added: ‘Late payment can have a devastating effect on engineering businesses, as well as to the wider economy. Cash flow is vital to ensure apprentice recruitment, employment and up-skilling training continues to grow. In our view, improving the velocity of cash is vital in improving our industry.’

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