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SEC Group: Carillion treated suppliers with contempt

A joint report from the House of Commons Business and Works and Pensions Select Committee has highlighted Carillion’s abuse of its supply chains, stating that they were treated with “contempt”.

The Specialist Engineering Contractors’ (SEC) Group, representing the largest sector of UK construction by value, has welcomed the report.

Professor Rudi Klein, SEC Group’s chief executive, said that the Carillion saga has shone a light on the dark underbelly of construction, and added: “Unfortunately Carillion is not alone; payment and contractual abuse is rife in the construction industry.”

SEC Group has been urging the Government to act on the lessons from the Carillion debacle. It has drawn up a four-point plan for action:

  • All public sector projects should use project bank accounts so that everybody is paid within short timescales from the same 'pot'.
  • The Public Contracts Regulations 2015 should be amended to mandate 30-day payments on all public sector contracts and sub-contracts. Suppliers failing to pay within these timescales must be excluded from public sector works.
  • Retention monies should be ring-fenced in a protected scheme.
  • The Small Business Commissioner should have the power to fine large companies for poor treatment of their supply chains.

Professor Klein concluded: “Unless we act now, the risk is that we’ll end up with more Carillions”.

21 May 2018

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