06 RCI 0614

RCI June 2014

INDUSTRY NEWS Government targets late payment as Vince Cable announces plans to improve UK practices, but is unlikely to commit to change until after the General Election The government has announced new plans to develop a series of policies designed to tackle the issue of late payment, but has failed to commit to a time frame for change. Following its consultation paper “Building a responsible payment culture” launched last year, business secretary Vince Cable revealed that the government will develop a “robust” payment reporting framework, strengthen the Prompt Payment Code and give ministers new powers to tackle late payment. It will also become compulsory for large companies to publish information regarding their payment practices. While the framework would be given legislative underpinning, it was however considered that a ‘naming and shaming’ policy could discourage large companies from being open about their terms. Mr. Cable said: “For too long too many large companies have been getting away with not paying their suppliers on time to maximise their profits. It is small business that is suffering as a result and it needs to stop. The government has taken action to create a responsible payment culture but we need to go further. We will now make it compulsory for large companies to publish information about their payment practices so that those who are not playing fair can be held to account.” The Government will work with the Institute of Credit Management and businesses to consider how the Prompt Payment Code could be strengthened, and look in more detail at the proposals made by respondents to increase accountability of signatories to the code. It was also confirmed that legislation would come into force later this year to require that 30-day payment terms are passed down all public sector supply chains, and that public contracting authorities make public and transparent reports on their late payments. This is said to be a result of the consultation paper finding “strong support amongst respondents for increasing transparency on payment practices.” Industry support Phil Orford, chief executive of the Forum of Private Business, welcomed the proposals and said: “The government has helpfully steered clear of measures that seek to over simplify the variety of relationships that exist in the private sector. The Forum is also pleased the government is open to reintroducing reporting requirements for larger companies, creating greater transparency and highlighting good and bad payment practice.” The Government will also bring forward legislation that would require public authorities to accept e-invoices, as well as run timely and efficient procurements. “When time permits” Despite the wide-ranging response to late payment, Vince Cable failed to confirm a period within which the ...For the latest news delivered straight to your inbox visit www.roofzine.com 06 JUNE 2014 RCIMAG.COM new measures would be brought in, saying that the changes would come “when Parliamentary time permits” – suggesting after next year’s General Election. Suzannah Nichol MBE, chief executive of the National Specialist Contractors’ Council (NSCC), which has rallied for change through its Fair Payment campaign for years, said: “It is encouraging to see Government formally recognising the widespread problem of late payment and its effect on the economy. “But I know just how many Specialist Contractors are affected day in, day out by lengthy and unfair payment terms and they cannot afford to sit and wait for parliamentary time to be made available. It is therefore also up to our industry to look at itself and for companies to take individual responsibility for changing this pervasive culture as soon as possible." There has been some concerns towards Mr. Cable’s announcement, with John Allan, national chairman of the Federation of Small Businesses (FSB), stating that a key test to the measures will be whether the big companies who sign up to the Prompt Payment Code actually begin to pay within 60 days, something they should be doing under the existing EU directive. Mr. Allan said: “Whether these measures go far enough without calling for a statutory code will be determined by how big companies respond to the announcement and change their culture. Small businesses can no longer be expected to lend interest-free to large businesses.” Mr. Allan said that large businesses must be required to explain their payment terms clearly and take their responsibility to pay promptly more seriously: “If those terms exceed 60 days, they must explain why. No longer can small businesses be the poor relation in the payment chain. We need to see more of the detail in (the) announcement because small businesses need tough action from the government on late payment.” Limitations The government also rejected creating an ‘upper tier’ of the Prompt Payment Code, which would require signatories to adhere to stricter payment practices. It also ruled out introducing a maximum legal payment period across all industries, but said it would work to promote sector-based approaches similar to that of the Construction Industry Payment Charter. More than 100 businesses, organisations and individuals responded to the consultation, including the Construction Products Association; the National Specialist Contractors Council; the Chartered Institute of Building; Forum for Private Business; National Federation of Roofing Contractors; and the Builder Merchants Federation. Carillion was the only major construction firm to respond directly to the consultation. A roofer has appeared in court after using a transit van to increase the height of a double extension ladder in order to access a third floor façade. The Health and Safety Executive (HSE) said that George Nicholls, 25, ‘blatantly’ risked harming himself and others as he footed the ladder on the vehicle to paint a shop frontage on St Marys Road in Southampton on March 14 2013, working from it fully-extended some eight metres above the ground with a labourer providing the footing. Mr. Nicholls was caught on camera by a council environmental health officer following a tip-off from a concerned member of the public. Southampton Magistrates’ Court was told this system was fraught with risk. Not only could Mr. Nicholls or his labourer have fallen, but there was no form of segregation to prevent vehicles or pedestrians from passing under or near the work area. HSE inspector Frank Flannery said: “The photographic evidence speaks for itself in terms of the risks created. Anyone can see the system of work is plain wrong, so why a supposedly competent roofer chose to work in this way is anyone’s guess. Maintenance 24-7, of King Street, King’s Lynn, admitted a breach of Section 3(1) of the Health and Safety at Work etc Act 1974 and a further breach of the Work at Height Regulations 2005. The company was fined £10,000 with £784 in costs. George Nicholls, of Hogs Pudding Lane, Newdigate, Surrey, was fined a total of £4,000 and ordered to pay £666 in costs after pleading guilty to breaching Sections 2(1) and (3(1) of the same Act. www.hse.gov.uk/falls Roofer’s actions are “blatant and reckless” Photos taken by a council official show the work at height risks. Source HSE


RCI June 2014
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