New payment regime met with modest response, while Carillion gets boost to number of firms on its scheme


Kier has had a modest response to its version of supply chain finance, with just 12 firms using the scheme currently.

The contractor is one of the latest to adopt a supply chain finance scheme that allows subcontractors to get paid early for a small bank charge. Kier followed Balfour Beatty and Carillion in announcing such a scheme in September.

Carillion’s version has drawn criticism because it requires subcontractors to agree to 120-day payment terms.

Hayden Mursell, group finance director at Kier, said he hoped the firm’s scheme would give it a competitive advantage in getting the best subcontractors into its supply chain.

Under Kier’s scheme firms are paid 21 days after invoices are approved and are charged 0.25% on each invoice by the bank. Kier has 90 days to pay back the bank. Only 12 firms have signed up to the scheme since it was trialled in May.

But Mursell said that many of Kier’s projects were small and its payment terms averaged 40 days and that made it less attractive for firms to sign-up.

The Kier scheme also differs from other main contractors’ because it is an arrangement that firms enter into on a project-by-project basis.

Meanwhile, Carillion said the number of suppliers using its scheme had swelled to 266, up from 230 in August.