Carillion has dropped its 65-day payment period for suppliers on Ministry of Defence work.
The contractor, which has been criticised over the length of its payment periods, is understood to have agreed to pay suppliers within 30 days on most MoD projects. Carillion’s work for the client includes the £12bn Allenby & Connaught barrack refurbishment scheme
Thirty days is the payment period approved by the Office of Government Commerce’s Fair Payment Charter, which also warns that contractors that do not comply with it risk losing out on public sector work.
The move has given rise to speculation that Carillion may roll out the policy for other public sector clients. A spokesperson for Carillion could not confirm this, but said: “We’ve signed up to the Defence Estates charter and are beginning to make any necessary changes to our payment processes. We’ll review the proposals for other MoD clients when they ask us to.”
It also emerged this week that the contractor had formed a dedicated business for public sector work as part of a restructuring ahead of its £572m takeover of Alfred McAlpine.
We will review the proposals for other MoD clients when they ask us to do so
Carillion Government Services will be responsible for work in health, education and defence. It will be headed by Shaun Carter, the former managing director of TPS, Carillion’s £30m-turnover consultancy business. TPS will be headed by Frank Huidobro.
McAlpine’s public sector work is expected to be included in the division.
The McAlpine takeover was approved by shareholders this week and is expected to complete midway through next month.
Adrian Bull, Carillion Health’s managing director has left after its recent restructuring.
For the full story of the McAlpine deal search www.building.co.uk/archive