On April 18 2016, Scottish contracting authorities with large annual procurement budgets became statutorily bound to declare how they intended to ensure 30 day payments along their supply chains.

The Specialist Engineering Contractors’ (SEC) Group Scotland has since surveyed contracting authorities to establish the extent of compliance with this requirement. Responses were received from 29 contracting authorities. 

The survey resulted in a number of key findings:

• 13 (45 percent) authorities were not considered to be compliant.
• From the evidence provided, it was not absolutely clear whether four (14 percent) authorities were compliant.
• Three (10 percent) authorities were taking steps to comply.
• Nine authorities (31 percent) were considered to be compliant.

According to SEC Group Scotland, the primary reasons for non-compliance were as follows:

• Lack of evidence demonstrating that 30 day payments were required in tier 2 and tier 3 contracts (i.e. sub-contracts and sub-sub-contracts).
• No indication of measures such as performance monitoring to ensure compliance along the supply chain.
• Failure to accurately reflect the requirement in the legislation – [Section 15 (5)(d), Procurement Reform (Scotland) Act 2014] – that the 30 days commences from presentation of invoice or similar claim.

Eddie Myles, SEC Group Scotland’s chairman, said that it was still “early days” but contracting authorities required clearer guidance on what they needed to do to ensure compliance. 

He added: “Anecdotal evidence from SMEs in our sector suggests that little has changed. The easiest way to ensure compliance in many cases is to use project bank accounts as suggested in the statutory guidance accompanying the legislation.”

SEC Group has incorporated the survey results in a report to the cabinet secretary for finance and the constitution and the minister for business, innovation and energy. 

The report holds a number of recommendations, including the appointment of a 'construction regulator' to oversee compliance and promote best practice in public sector procurement.