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Fair pay in public sector construction secured

Today, employer bodies and construction industry leaders signed a charter giving the thumbs up to fair payments throughout the building supply chain.
The Office of Government Commerce's (OGC) Fair Payment Charter could yield a £750m saving on public sector building work by committing public sector clients and their principal contractors and supply chain members to adopt fair payment principles for future construction projects.

The Fair Payment Charter commits clients, lead contractors and their supply chains to
1) Greater transparency
2) No unfair withholding of retentions
3)More efficient payment procedures
4)Payment periods not exceeding 30 days

Central government construction clients are expected to adopt the principles set out in the guide and the Fair Payment Charter by January 1st 2008.
Today at the OGC's offices, representatives from key industry bodies and the government put their names to the charter.

OGC will monitor the progress of implementing the Fair Payment Practice and the adoption of the Charter from January 2008.

The Construction Industry Council, Construction Clients Group, Construction Confederation, National Specialist Contractors Council, Local Government Task Force, Construction Products Association and Specialist Engineering Contractors Group all signed the charter. OGC and Department of Business Enterprise and Regulatory Reform signed on behalf of the government.

Speaking at today's charter-signing event, Stephen Timms, Minister for Competitiveness, said 'Over a third of the output of the construction industry is for the public sector. This means that on many issues government and the public sector can make also make a difference through its procurement function. 'I am delighted that the industry and government have been able to come together to agree what principles of fair payment should apply on government construction projects.'

The charter is part of the government's fair payment initiative which sought to get cross-industry agreement on fair payment best practice in public sector construction projects throughout the construction supply chain. The government believes this could save the public sector up to £750m a year by reducing financing and risk elements from project costs. The government's recently published a Guide to Best Fair Payment Practices.

The Guide To Best Fair Payment Practices including the Fair Payments Charter can be found at

19 September 2007


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