Draft amendments to the Construction Act, published this week, could save the industry up to £1 billion by improving cash flow through the supply chain, the government claims.

The proposed amendments, unveiled by the Department for Business, Enterprise and Regulatory Reform, largely mirror measures detailed in the most recent consultation in June 2007 and include measures to reform disputes procedures.

Construction News (CN) said that if implemented, the amendments would make it easier for contractors and suppliers to establish what money is owed to them on completion of work by clarifying the statutory payment framework. In the case of a dispute, the proposals also make it easier to deal with the consequences, doing away with the requirement for a written contract to be in place to go to adjudication.

Building magazine reported mixed industry reaction to the amendments, which it said were unlikely to change substantially before becoming law during the next parliamentary session.

Construction Confederation chief executive Stephen Ratcliffe warned that the changes may 'actually bring more red tape and increased costs to the industry.' While National Specialist Contractors Council chief executive Suzannah Nichol called the changes 'a significant step in the right direction.'