To ask Her Majesty's Government what assessment they have made of the impact of the Prompt Payment Code on SMEs in the construction sector, given that only a small minority of construction businesses are signatories to the Code.
27 April 2021
The Government is committed to fulfilling its manifesto commitment to clamp down on non-payment and late payment to support small businesses in the UK.
We have introduced a number of measures to tackle late payment. These include the Payment Practices Reporting Duty which creates transparency in payment behaviour, and the Prompt Payment Code which sets standards and best practice in payment culture. Both measures are applicable in the construction sector.
Since September 2019, suppliers also risk being excluded from winning large Government contracts if they cannot demonstrate prompt payment. This policy applies to Central Government contracts valued above £5m per annum, subject to the Public Contracts Regulations.
In addition, in May 2020 the Government issued a Guidance Note on responsible contractual behaviour in the performance and enforcement of contracts impacted by the COVID-19 pandemic.
The Government will continue to review behaviours in contracting, including public sector procurement, prompt payment and contract management arrangements.