To improve payment security in the construction industry, HVCA members are being urged to get confirmation from their public sector clients that they will pay their suppliers within the ten-day period insisted by Peter Mandelson.
In a statement made in the House of Lords on October 22, Lord Mandelson, the secretary of state for Business, Enterprise and Regulatory Reform (BERR) said “Central government will aim to pay its suppliers as soon as possible, and within ten days at the latest”. Mandelson went on to confirm that regional development agencies had already committed to the same timetable and a similar policy was being adopted by other government agencies.
“Yesterday, the secretary of state for Communities and Local Government wrote to the Local Government Association, and the chief executive of the National Health Service wrote to the NHS trusts, asking these public bodies to review their payment performance and follow central government’s lead,” Lord Mandelson said.
HVCA vice president Martin Burton said “The Mandelson statement provides members with an ideal opportunity to challenge the payment practices adopted by their clients across the public sector”.
Whether working directly for the client or as a sub-contractor, the HVCA is urging its members to highlight the secretary of state’s message to their paymasters – and ask whether they were amending their payment policies as a result.
“What needs to be pointed out is that for HVCA members working as subcontractors in the public sector, this may not filter down to them”, said Rob Driscoll, a solicitor within the HVCA's commercial and legal department.
“Those members need to bring Mandelson’s statement to the attention of their direct clients. It’s also important to stress Mandelson's statement refers to existing as well as future contracts'.
HVCA members have been asked to keep the association informed of the actions they take and the responses they receive from clients, so that the Association can feed back the information to the secretary of state.
Aside from the HVCA’s response in relation to public sector contracts, the Association is one of several organisations lobbying the government to tighten up payment legislation in general (whether public or private) by pushing for this in an amendment to the Housing Grants Construction and Regeneration Act 1996.