BSRIA has welcomed the recent announcement by the Cabinet Office Minister for Implementation, Oliver Dowden MP, to launch a package of “tough” new measures to “level the playing field” for smaller businesses bidding to win government contracts aka issues around fair and prompt payment in the construction supply chain
Proposals will exclude suppliers from major government procurements if they cannot demonstrate “fair and effective” payment practices with their subcontractors. And will allow subcontractors to have greater access to buying authorities to report poor payment performance.
Suppliers will also have to advertise subcontracting opportunities via the Contracts Finder website and to provide the government with data showing how businesses in their supply chain, including small businesses, are benefiting from supplying to central government.
The Prime Minister has asked members of her Cabinet to nominate a Small Business Champion minister in each department to ensure that small and medium-sized enterprises (SMEs) are given a fair opportunity.
This will ensure that more SME businesses are able to supply goods and services to the public sector, while also making public procurement more transparent.
Julia Evans, Chief Executive of BSRIA, said: “After recent collapses of corporate companies in the industry, it is clear that vigorous and transparent payment measures are needed coupled with a public procurement process that holds such larger companies to account for their payment practices.
“Government has set a challenging aspiration that 33% of procurement spend should be with small businesses by 2022 – and it is doing work to ‘break down barriers for smaller firms’. Indeed: SMEs are the pillar of the UK economy and play a crucial role at all levels in the construction industry.
“It goes without saying that companies who pay late should not be rewarded with public sector contracts.
“In essence: BSRIA is encouraged that this announcement signals government’s commitment to improving payment practice in the UK.”
The Minister is staging a workshop for representatives from the construction sector and government to discuss how we can improve payment practices. Members’ views on how industry and government can best work together to tackle these issues are welcome.