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BESA welcomes progress on prompt payment

The Building Engineering Services Association (BESA) has welcomed the updated Prompt Payment guidance, recently published by the Government, clarifying what suppliers should take note of in their approach to payment in major procurement contracts.

This update reiterates the Government’s November 2018 announcement that from September 01 2019, any organisation that bids for a central government contract worth over £5 million a year will need to demonstrate it has effective payment systems in place to ensure a reliable supply chain.

The Government has set a standard of 95 per cent of all supply chain invoices to be paid within 60 days for organisations who want to do business with Government. Suppliers who do not comply with this standard could be prevented from winning government contracts.

BESA has urged businesses bidding for public sector procurement to ensure their organisation is publishing payment reports where required and to read latest piece of guidance, to understand how government departments will be implementing the changes from September and what is expected of them.

David Frise, BESA chief executive, said: “This is a very important step towards tackling late payment and retention abuse in the industry. For progress towards responsible payment practices to be made across the whole economy, the public sector must lead the way by example.

“The UK lags behind other countries that enacted legislation cracking down on retention abuse like Germany, France, Australia, Canada and New Zealand.

“BESA strongly backs the Aldous Bill to establish a retention deposit scheme and has played a crucial role in building a coalition of supporters for this important reform to deliver payment certainty for our members.

“BESA understands that maintaining the status quo is unacceptable and that retention reform is essential for small and medium businesses. This campaign still has a long way to go but it’s important that we acknowledge the positive efforts currently being rolled out in the public sector.”

31 July 2019

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