Contractors’ own figures show how far some have got to go to stave off Cabinet Office threat of losing public work
The scale of the task facing contractors to meet new government targets on payment records can be revealed with none of the country’s biggest firms meeting a threshold set by Cabinet Office minister Oliver Dowden.
Dowden said: “From September, if government contractors are late with supplier payments, they could be prevented from winning public contracts until they clean up their act.”
In his letter, Dowden tells firms to shape up over paying their suppliers, warning: “I expect to see you meeting the required standards and making improvements if necessary.”
Contractors by law must pay suppliers within 30 days on all public sector jobs.
Dowden said he was not prepared to give firms too much time to get their houses in order, telling them: “Many of you are due to publish your next report by the end of July and I expect to see you meeting the required standards and making improvements if necessary.”
From September, the government will begin assessing the last two six month reporting periods to see if firms are meeting its target.
| Is anyone close to the government target? | ||
|---|---|---|
|
Government has told suppliers it wants them to pay 95% of invoices on all private sector jobs within 60 days. Below is a round-up of the percentage of invoices on public and private sector jobs which contractors pay within 60 days |
||
|
Contractor1 |
Percentage of invoices paid in 60 days or less in the last payment reporting period2 |
Percentage of invoices paid in 60 days or less in the penultimate payment reporting period3 |
|
Balfour Beatty |
82% |
77% |
|
Kier Construction |
65% |
66% |
|
Interserve Construction |
86% |
76% |
|
Laing O’Rourke Construction |
59% |
Not reported |
|
Galliford Try Building |
75% |
75% |
|
Morgan Sindall Construction and Infrastructure |
78% |
76% |
|
Bam Construction UK |
89% |
82% |
|
Lendlease Construction UK |
90% |
91% |
|
Mace |
92% |
86% |
|
Costain Engineering and Construction |
68% |
72% |
|
ISG Construction |
90% |
89% |
|
Skanska Construction |
92% |
89% |
|
Wates Construction |
90% |
89% |
|
Sir Robert McAlpine |
90% |
83% |
|
Multiplex Construction Europe |
85% |
86% |
|
1Building looked at data for contractors’ construction units. However, three firms only reported payment data across their group: Balfour Beatty, Mace and Sir Robert McAlpine 2 This was the six months ending 31 December 2018 for all firms except Laing O’Rourke and Sir Robert McAlpine. Their figures are for the six months ending on 30 September 2018 and 31 October 2018 respectively 3This was the six months ending 30 June 2018, except for Sir Robert McAlpine. McAlpine’s figure is for the six months ending 30 April 2018 |
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From September, the government will begin assessing the last two six month reporting periods to see if firms are meeting its target.
But according to the payment records – which firms with more than 250 employees and an annual turnover of more than £36m are now required to publish every six months – of 15 of the UK’s largest contractors, all are falling short of the standard Dowden is now demanding they meet.
Building looked at the payment records of firms’ construction arms, with worst performers Kier and Laing O’Rourke paying only 65% and 59% respectively of their invoices within 60 days.
The best performer was Skanska, which paid 92% of its invoices within 60 days while Wates settled 90% of its bills in the timeframe.
The country’s largest contractor Balfour Beatty files its number as a group figure – rather than just construction – paying 82% within 60 days in the second half of 2018.
Mace and Sir Robert McAlpine also file their numbers as group figure, with the pair paying 92% and 90% respectively within the 60 days period.
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