Main contractors exploit loophole to dodge payment

Main contaractors are flouting the government's fair payment regulations by exploiting a loophole to delay payment of subcontractors, an industry trade body has warned.

Rudi Klein, chief executive of the Specialist Engineering Contractors' Group said there had been a sharp rise in suppliers reporting delayed payments from public and private sector clients.

The government charter requires public sector clients to ensure that the period between the date bills are due and and the final payment date does not exceed 30 days. But Klein claims main contractors are spinning out the payment process by delaying suppliers' applications for payment, which in turn pushes back the due date.

Contractors' tactics to put off the due date included asking subcontractors to resubmit documents supporting their bills and leaving three or four weeks between receiving an invoice and setting a due date.

Such incidents are only the tip of the iceberg however, said Klein: 'They are taking a week longer than a year ago, and this will get worse. It really is a concern at the moment.'