The Latest Results of the BuildUK League Table of Reporting of Payment Practices and Performance Regulations indicates that Build UK tier one Contractor members have improved their payment performance again over the last six months despite the challenging market.
According to the data published, BuildUK Members are now taking an average of 29 days to pay invoices, down from 30 days a year ago and 45 days when Build UK first started benchmarking payment performance in 2018. The results show an average of 95% of invoices are paid within 60 days. The table also shows that all tier one Build UK Contractor members pay invoices within an average of 55 days, with more than two thirds now taking 30 days or less.
The reporting landscape is set to change. From 1 April 2024 PPN 10/23 takes effect. This Public Procurement Notices (PPN) applies to all Central Government Departments, their Executive Agencies and Non Departmental Public Bodies procuring goods and/or services and/or works with an anticipated contract value above £5 million per annum. The PPN requires bidders to demonstrate they are paying95% of invoices within 60 days (90% with an action plan), and also paying all their invoices within an average of 55 days.
In 2024, following extensive lobbying from FIS and a number of other specialist construction groups, Business and Trade (DBT) laid the Reporting on Payment Practices and Performance (Amendment) Regulations 2024. These Regulations amend the existing reporting regulations, on which the BuildUK League Table is based. These amends see a requirement for additional information to be reported by qualifying companies and LLPs. This includes requirements for qualifying companies to publish information on the value of payments made within a qualifying period and information on payments that were not paid under qualifying contracts. The more onerous reporting will come into force in 2025.
FIS CEO Iain McIlwee stated: “It is good to see league tables, but we shouldn’t be lulled into a sense of false security, we regularly test the market and nothing in our data tells us we are seeing any real shift in payment practices. In data collected in January only 4.7% of respondents amongst specialist contractors noted an improvement, 69.8% reported no change and 25.6% reported that it had gotten worse. The new reporting requirements are a cause for hope as there is less that can be done to hide the ground truths, but that is little consolation to a supply chain starved of cash in a tough credit environment.”
The BuildUK Leage Table shows the results for more than 125 of the industry’s largest companies, including contractors, clients and housebuilders, to provide a comprehensive picture of payment practices across the industry.
