In an interim report on the Construction Act, which the CLG sent to construction minister Nick Raynsford, the group criticises bespoke clauses that allow main contractors to withhold payment until the main contract has been certified.
According to the CLG, the clause, known as pay-when-certified, falls foul of the 1998 act by preventing subcontractors from scheduling their payments. "The whole intention behind the act was to regulate payment so that all parties knew when they would be paid," said CLG legal adviser Rod Pettigrew.
The report also urges the government to amend the legislation to include supply contracts because of an increasing trend in prefabrication and off-site assembly. Pettigrew warned: "With the increase of prefabrication, there is bound to be an increase in silly practices."
In response, a spokeswoman for the DETR quoted from a letter that Raynsford sent to the CLG: "It is probably too early to fully assess how well the act is working, and it is certainly too early to introduce changes. I am pleased overall with the way the legislation is working in practice. Nevertheless, I remain open to changes in the longer term should they be necessary."
The CLG report was based on a pilot survey of its members' compliance with the Construction Act. A full report will be published next year.
