Clients are reacting to the global credit crisis by using “manipulative tactics” to delay paying their supply chains, an industry trade body has warned.
Rudi Klein, chief executive of the Specialist Engineering Contractors Group, said there had been a sharp rise in contractors reporting that public and private sector clients had been pushing back payments.
The Office of Government Commerce’s Fair Payment Charter dictates that public sector clients and their contractors must ensure that no more than 30 days elapses between the date bills are due, which is typically a week after they are presented, and the final payment date.
According to Klein, employers and main contractors are using loopholes to dodge the rule. These include accusing subcontractors of not supplying sufficient supporting information in their payment applications, or leaving three or four weeks between receiving an invoice and setting a due date.
Klein warned that these incidents were only the beginning. He said: “They are taking a week longer than a year ago, and this will get worse. It really is a concern at the moment.”
The OGC said it urged suppliers to use its Supplier Feedback Service to report malpractice by public authorities. More detail about this process can be found on the OGC’s website at www.ogc.gov.uk.