Subcontractors are having to wait more than 120 days for payment as the downturn hits construction supply chains, it has emerged.

Julia Evans, the chief executive of the National Federation of Builders, said 44% of all calls to its advice lines were asking for assistance on chasing non-paying clients. “We’re hearing stories about 90-120 day payment periods. This has to stop.”

Peter Mandelson, the business secretary, launched a code of practice last week to increase the speed of payment to smaller businesses.

Evans said this should be made tougher: “We want to see greater legislative powers. Those who break terms repeatedly should be publically named and shamed, or fined.”

One managing director of an SME said he had experienced payment delays up to 120 days. He said a pledge made by Mandelson in October that public sector clients would pay small firms within 10 days was a “farce”.

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