An industry group that is reviewing the payment clauses of the Construction Act has failed to reach agreement.

The group, which has been commissioned by Sir Michael Latham, is now late in reporting back to him and is urgently trying to reach a compromise solution.

Representatives of subcontractors are proposing changes to sections 110 and 111 of the act to include minimum payment times and a right to issue payment notices.

The subcontractors also want the establishment of payment bonds and project trust funds to protect themselves from insolvent employers.

An insider on the group said the main contractors’ and clients’ representatives had rejected the proposals out of hand.

He said: “Subcontractors are making demands but most of the industry does not want to follow the route of penalties for non-payment.”

A Construction Confederation spokesperson said: “Our view is that subcontractors are trying to restrict parties’ freedom to contract.”