Main Contractors and Housebuilders Improve Payment Times as Targets Missed

worker in front of computer - payment times

THE AVERAGE PAYMENT TIMES suppliers and subcontractors have to wait before their invoices are paid by main contractors and housebuilders has been published by Build UK.

According to the contractors trade association, Vistry and McAlpine are top of the list of payment times, with Barratt Developments the fastest on average for housebuilders.

The table shows that two-thirds of contractors and housebuilders payment times still do not meet the government target of 30 days – six years after the target was introduced.

Payment Times

Under the Small Business, Enterprise and Employment Act 2015, companies have a duty to publish reports on their payment practices and performance.

Contractor members of Build UK are now reporting an average of 34 days to pay invoices, a reduction of 11 days from when the Build UK table was first published in July 2018.

On average, they now pay 94% of invoices within 60 days, up from 82% three years ago, and 79% of their invoices are paid within terms, compared to 61% in 2018.

Housebuilders

Of nine housebuilders reporting, Barratt was the fastest payer with an average of 22 days. Redrow was close behind with an average of 24 days and Persimmon in third place at 26 days.

The slowest payers were Vistry at an average of 44 days, Scottish housebuilder Miller Homes on 41 days and Crest Nicholson on 39 days.

Prompt Payment Code

Main contractors are now required to pay small businesses within 30 days under the Government’s Prompt Payment Code. The list of companies failing to meet the 30-day code and suspended for non-compliance is here.

Following a tightening of the rules for smaller firms last month, signatories to the code will need to demonstrate they have paid 95% of invoices from businesses with fewer than 50 employees within 30 days.

INDUSTRY COMMENT

Never Been More Important

Mark Beard, chairman at Beard Construction said: “It has probably never been more important to ensure fair treatment of suppliers and subcontractors including prompt payment of invoices, as the industry continues to bounce back from the economic shock of the pandemic.

“So, it is encouraging to see that average payment times improved over the last six months, even by just one day, particularly as we are faced with the real challenge of the materials shortage at the moment.

“In fact, it seems clear to me that one of the ways to mitigate the risk of projects running late due to supply chain issues, is to ensure prompt payment as that will inevitably mean better working relationships with those suppliers and subcontractors.

“We are all aware that construction sites generate a significant amount of work for smaller suppliers and subcontractors. So, if we choose to work with them, we have a responsibility to support them through prompt payment of invoices.

“The figures from Build UK show that average contractors paid subcontractors within 34 days, which is 11 days quicker than in July 2018 when they first started collecting data. That is commendable progress but we can and should do more to adhere to the principles of the Prompt Payment Code.”

Payment times for main contractors
Firm Average days to pay invoices % invoices not paid within terms % invoices paid within 60 days
Vinci 24 15 95
Sir Robert McAlpine 24 18 96
Costain 25 19 95
Morgan Sindall 27 9 98
ISG 28 13 98
McLaren Construction 28 38 96
Willmott Dixon 29 10 99
VolkerWessels 29 24 96
Robertson Construction 29 37 95
Osborne 30 23 93
Tilbury Douglas 30 39 95
Lendlease 31 7 97
Laing O’Rourke 31 19 93
Kier 31 28 90
Amey 31 38 93
BAM Construct 32 26 96
John Sisk & Son 32 26 93
Mace 32 29 90
Wates 35 21 95
Murphy 36 23 83
Winvic Construction 37 14 97
Bowmer and Kirkland 37 27 95
Galliford Try 38 10 95
Multiplex 38 20 88
Canary Wharf Contractors 38 21 89
Bouygues 38 22 93
Balfour Beatty 38 26 92
Skanska 41 10 89
Graham Construction 42 18 90
Engie 45 1 96
BAM Nuttall 46 24 90
Seddon 49 15 96
Payment times for housebuilders
Firm Average days to pay invoices % invoices not paid within terms % invoices paid within 60 days
Barratt Developments 22 16 99
Miller Homes 23 41` 90
Crest Nicholson 29 39 89
Bloor Homes 4 38 90
Taylor Wimpey 20 37 94
Bellway Homes 23 35 95
Persimmon Homes 19 26 96
Redrow Homes 8 24 97
Barratt Developments 16 22 99
Crown House Technologies 12 31 91

 

>>Read more about payment times in the news

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