6 January 2015
Construction Supply Chain Payment Charter Published
Businesses in the construction industry can demonstrate their commitment to fair payment by registering their interest to become a signatory to the Construction Supply Chain Payment Charter.
The Payment Charter, which has been published as part of the Industrial Strategy: Construction 2025, sets out the industry’s ambition for payment terms of 30 days by 2018 and no cash retention by 2025. As well as maintaining the existing public sector commitment to payment within 30 days, the Charter specifies payment terms for private sector projects of 45 days from June 2015 and 30 days from January 2018. It also sets out clear commitments in respect of ‘pay less’ notices, contract variations, electronic payments and Supply Chain Finance schemes.
By signing up to the Charter, an organisation will agree to apply the commitments in its dealings with its supply chain, to be monitored against a series of KPIs, and to consider the performance of its supply chain when awarding contracts. The KPIs for monitoring compliance with the Charter will be published in due course and mirror the new statutory reporting requirements which will come into force from April 2016.
To apply to become one of the first signatories to the Charter, an organisation must first sign up to the Prompt Payment Code. Signatories to the Code are listed in a drop down menu on the Construction Supply Chain Payment Charter website and they will be validated before being sent a link to the online application form for the Charter. Once approved, signatories to the Charter will be listed on the website and can use the Charter logo on their own website and documentation to show that they follow good payment practices.
To apply to become a signatory to the Charter, visit the Construction Supply Chain Payment Charter website.