Public sector fails to respond to call for ten-day payments

Research carried out by the HVCA among its members suggests that calls for the public sector to improve its payment regime to suppliers have fallen on deaf ears.

It was in October last year that business and enterprise secretary Lord Mandelson announced that “central Government will aim to pay its suppliers as soon as possible, and within 10 days at the latest”.

However, a survey carried out among HVCA members in the last quarter of 2008 and the first quarter of 2009 has revealed that public sector clients are coming nowhere near to settling their invoices within the 10 days proposed by Lord Mandelson.

Of the Association members that responded to the survey, only 12% of those who dealt directly with public sector clients received payment within ten days, while 39% had to wait at least 30 days and 8% in excess of 60 days.

Respondents that acted as subcontractors on public sector projects fared even less well – with only 10% receiving payment within ten days, 63% having to wait at least 30 days and 10% waiting more than 60 days.

“Our findings – which are themselves backed up by consistent anecdotal evidence – strongly suggest that Lord Mandelson’s edict has had very little effect so far on payment performance in our sector,” commented Martin Burton, HVCA vice president and chairman of the Association’s commercial and contractual committee.

“The secretary of state’s message is simply not being heard at local level.”

In a letter to construction minister Ian Pearson, HVCA chief executive Robert Higgs recalled that, at the beginning of 2009, the Department for Business, Enterprise and Regulatory Reform had asked all Government departments to compile quarterly statistics of their payments to contractors.

“I do not know whether it is possible for payments to the construction sector to be extracted from these statistics.

“But, either way, I should be grateful if you would provide me with the most recent departmental statements, and also any feedback on this issue, which is of crucial importance to our members,” Higgs wrote.

A response from Mr Pearson’s office remains outstanding.