Contractors could be forced to shorten payment periods for their supply chains on public sector contracts after government clients signed up to a set of construction standards this week, writes Olivia Boyd.
The construction commitments, originally written for the 2012 Olympics, were rolled out by the Strategic Forum to address the whole industry on Wednesday. This coincided with the launch of the Department of Business, Enterprise and Regulatory Reform’s (BERR) Strategy for Sustainable Construction, which the commitments are intended to enforce.
The goals of the strategy, which were announced by construction minister Baroness Vadera (pictured), include:
• Recruiting 230,000 extra workers by 2010
• Cutting deaths at work by 10% year on year
• Ensuring a quarter of construction materials are responsibly sourced by 2012.
The Department of Health, the Office of Government Commerce and the Highways Agency are among the clients that have signed up to the commitments, which include a 30-day payment period (see box).
Although 30 days is meant to be standard practice, some public sector contractors, such as Carillion, have been known to operate far longer periods on some contracts. It is understood that government clients will insist on the clause in all future contracts.
We see little evidence of implementation. The industry is sick and tired of empty gestures.
Rudi Klein, SECG
A BERR spokesperson said: “All companies taking new government building contracts are committing to this 30-day payment period.”
Industry figures have warned that those who have put their names to the pledges must ensure it is not an “empty gesture”.
Rudi Klein, chief executive of the Specialist Engineering Contractors Group, said: “It’s good signing up to these things, but we see very little evidence of implementation. The industry is sick and tired of empty gestures.”
Paul King, chief executive of the UK Green Building Council, said the strategy’s environmental targets did not go far enough. He said: “It proposes 25% of materials be responsibly sourced by 2012, but how long until we set out a pathway to 100%?”
The publications came as Constructing Excellence released its 10th construction industry key performance indicators, a decade after the Egan report.
The results showed an improvement in pay levels, client satisfaction and environmental performance, but construction time and cost showed little improvement.
- Payment periods of 30 days, with no unfair withholding of retentions
- Project bank accounts where practicable
- Project-specific agreements between unions and employers
- Local employment projects and training initiatives
- Clear identification of client structure and responsibilities
- Best practice approaches to resource use, waste minimisation and low-carbon performance
- Client to produce clear brief before design commences
- Occupational health strategy for every project