15 April 2016

Sign Up to the Construction Supply Chain Payment Charter

Businesses in the construction industry can now demonstrate their commitment to fair payment by becoming a signatory to the Construction Supply Chain Payment Charter.

Build UK supports the principles of the Payment Charter, which clearly sets out the existing public sector requirement for payment within 30 days, alongside payment terms of 45 days for private sector projects reducing to 30 days by 2018. The Payment Charter also includes clear commitments in respect of retentions, ‘pay less’ notices, variations and Supply Chain Finance schemes.

By signing up to the Payment Charter, a company agrees to apply the commitments in its dealings with its supply chain, to be monitored on its compliance in line with the new statutory reporting requirements when they come into force later this year, and to consider the performance of its supply chain when awarding contracts.

With current payment practices holding back the industry and affecting the businesses of both Main and Specialist Contractors, fair payment has been identified as a priority for Build UK and we are working with our members to set out what best practice looks like. The Payment Charter is one of a series of measures being taken forward which together have the potential to fundamentally change the payment culture within construction. 

Build UK Contractor Member Skanska was one of the first companies to sign up to the Payment Charter and their President and CEO Mike Putnam said:

“As a member of the Construction Leadership Council, I am delighted to demonstrate Skanska’s commitment to fair payment by renewing our support and pledge to the Construction Supply Chain Payment Charter.  Our aim is to always work in an open and collaborative way. We value the strong long term relationships we have with our supply chain partners and understand the importance of prompt payment to them. Signing this Charter is a positive step towards creating more transparency in our payment performance and processes while creating the right conditions for the industry’s supply chain to grow and thrive.”

To apply to become a signatory to the Payment Charter, a company must first sign up to the Prompt Payment Code (PPC). To sign up to the Payment Charter, companies will need to provide information on their standard payment terms, retentions and any supply chain finance scheme they operate.

Once you have signed up to the PPC, or if you are a current signatory of the PPC, then companies that operate in the construction sector will then be listed in a drop down menu on the Construction Supply Chain Payment Charter (CSCPC) website. When you click the 'Apply' button at the bottom of the page, the person who completed the PPC application for your organisation will be emailed a link to the CSCPC application form. Once the CSCPC application form has been successfully completed, your organisation will then be listed as a CSCPC signatory.

Once approved, signatories to the Payment Charter will be listed on the website and can use the Payment Charter logo on their own website and documentation to show that they follow good payment practices.

Build UK has formally requested that public sector clients identify each of their construction contracts that the Payment Charter applies to and we are keen to see private sector clients do the same.